Zamanat Fund targets $100 million for SME financing

Addressing a significant regional gap in financing

Zamanat has unveiled the Zamanat Fund CEIC Limited, a tokenized private credit fund targeting a size of up to USD 100 million. This initiative seeks to address the estimated $250 billion financing gap impacting small and medium enterprises (SMEs) across the Gulf Cooperation Council (GCC). According to reports, only 11 percent of the region’s SMEs have access to credit, a stark contrast to their critical role in the economy.

SMEs in the GCC are pivotal to economic growth, contributing to over half of the gross domestic product (GDP) and employing a vast majority of the private-sector workforce. However, traditional bank lending to these entities remains disproportionately low, with SMEs receiving less than 10 percent of total bank loans in the UAE, showcasing the urgent need for more accessible financing alternatives.

Fund structure and investment strategy

The Zamanat Fund will channel investment into private credit opportunities within the GCC. By focusing on well-performing homegrown companies, the Fund aims to provide the necessary financial support that these businesses often struggle to obtain from conventional lending institutions.

Umair Tariq, Founder and CEO of Zamanat, emphasised that “strong businesses across the GCC still struggle to access growth capital despite sound fundamentals.” He noted that the Fund acts as a crucial link between these enterprises and institutional capital, particularly given the broader ambition to enhance SME involvement and stimulate private-sector growth in line with national strategies such as Saudi Arabia’s Vision 2030 and the UAE Centennial 2071.

Regulatory framework and tokenization benefits

The Fund operates under a closed-ended structure, regulated by the Dubai Financial Services Authority (DFSA) and classified as a Credit Fund. It is designed to meet the needs of Professional Clients, making it an exempt fund under the existing regulatory frameworks. Truleum Venture Partners Limited manages the Fund, bringing expertise in regulated fund management, while Apex Group provides administrative services.

In this innovative structure, interests in the Fund will be issued as ZM1 Investment Tokens on ZIGChain, a blockchain platform. Tokenization introduces a modern layer of ownership and settlement that facilitates investment within a regulated environment. This mechanism not only enhances accessibility for qualifying investors but also streamlines the investment process.

The push towards digital assets in the region

Zamanat’s initiative aligns with trends in the expanding Islamic finance landscape. With global Islamic finance assets projected to reach $9.7 trillion by 2029, there is a growing demand for digital and Shariah-compliant investment options. The tokenized private credit fund reflects a broader move toward integrating digital solutions within established financial frameworks.

Furthermore, Zamanat’s involvement is supported by Disrupt.com, a MENA-based venture builder focussed on AI-driven business development. This backing bolsters the credibility and operational ambition of the Fund as it enters a competitive market space where digitalisation is rapidly transforming traditional finance.

Implications for Canadian investors

As the landscape of global finance increasingly incorporates digital assets and tokenization, Canadian investors should remain aware of the emerging opportunities and regulatory frameworks involved. While Zamanat’s Fund targets the GCC region, its successful model could set a precedent for similar initiatives in Canada, where regulators like CIRO and the OSC are exploring frameworks for digital securities.

Understanding how such investments might parallel initiatives in Canada could inform strategies around local SMEs, especially in sectors that seek alternative financing avenues. As traditional methods face challenges, the exploration of tokenized assets may represent a significant shift in how investors can engage with the small business ecosystem.