The consumer lending market in the Middle East is booming. But what happens when, as is inevitable, some of these new borrowers struggle to keep up with repayments? Dubai-based start-up ClearGrid, which is today announcing that it has raised $10 million of pre-seed and seed investment, says its technology platform will help lenders ensure bad debt does not spiral out of control.
“In our part of the world, debt was traditionally seen as a negative thing, largely for religious reasons, but a new generation of consumers has very different views about borrowing,” explains Mohammad Al Zaben, CEO of ClearGrid, and co-founder of the company with Mohammed AlKhalili and Khalid Bin Bader Al Saud. “But as lending has taken off, it has rapidly become clear that debt collection practices in the region are not fit for purpose.”
That is becoming increasingly problematic as the debt sector grows. The Middle Eastern consumer lending market is already worth $500 billion and continues to expand through widescale adoption of services such as buy-now-pay-later (BNPL) financing. It is also attracting increasing attention from consumer protection regulators. Heavy-handed debt collection tactics will leave lenders vulnerable to regulatory scrutiny – and such practices are, in any case, expensive and ineffective.
ClearGrid’s alternative is a technology-based solution. “We’ve built a digital debt resolution platform that is powered by artificial intelligence and machine learning,” explains Al Zaben. “It gives lenders the tools they need to recover capital effectively while creating better outcomes for borrowers.”
The idea is that when a borrower falls behind on repayment, the lender uploads their details to the ClearGrid platform. It analyses each case individually, securing additional data on the borrower where necessary, in order to predict the best way to recover the debt and to develop the right type of engagement messaging. Using AI, the platform than contacts the borrower on the lender’s behalf, offering a choice of repayment options, and manages the engagement process.
The repayment options offered can be calibrated according to the lender’s criteria – it may want to offer one set of terms to someone who has lost their job, say, but different options for borrowers with different circumstances. Some borrowers may be able to manage more flexible repayment plans; others may be offered lower interest rates.
ClearGrid launched the platform in January 2024 and has so far signed up a number of specialist fintech firms as well as 10 enterprise lenders. It claims customers have seen an average 38% increase in collection rates with resolution reached twice as quickly as through other approaches. Al Zaben also points to the solution’s high level of consumer satisfaction. “Ironically, our use of AI enables us to take a much more human approach to debt collection, with each customer treated as an individual,” he says. “We can be an ally to help people get out of debt.”
The company’s early successes – and the size of the Middle Eastern market – have attracted significant interest from investors. Today’s funding announcement spans two separate rounds, including a pre-seed round co-led by Raed Ventures and Beco Capital, and a seed round co-led by Nuwa Capital and Raed Ventures. Additional institutional investors include Aramco’s Waed Ventures, KBW Ventures, Sharaka, 9yards Capital, Protagonist, BYLD, Eirad Holdings, Endeavor and Wamda. The business has also received backing from a number of angel investors.
The funding is earmarked for further product development, with Al Zaben hoping to double the number of engineers that ClearGrid employs, as well as market expansion, particularly in Saudi Arabia.
“ClearGrid is tackling a critical pain point in the debt collection industry,” says Omar Majdouie, founding partner of Raed Ventures. “Its AI-powered platform not only drives significant operational efficiencies for lenders but also fosters a more positive and sustainable relationship with borrowers.”
At Nuwa Capital, founding partner Khaled Talhoun adds: “ClearGrid is turning debt resolution from a fragmented, outdated process into a unique commercial opportunity; by leveraging AI and automation, it is not just improving collections but fundamentally reshaping how lenders engage with borrowers, setting a new standard for the industry.”
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