In Jeddah, a peer-to-peer loan is accepted when it stays occasional, is set down in writing and carries no interest, ideally backed by a Nafith note, but a cold caller offering credit to the public without a SAMA licence is acting illegally.
Jeddah, merchant city and the Kingdom's leading port
Saudi Arabia's second city, Jeddah lives from its Islamic port, wholesale trade and tourism. Merchant families in the historic Al-Balad district have long practised lending on trust between partners, often without anything in writing, a habit that breeds disputes.
A cosmopolitan population and its borrowing needs
Jeddah is home to large Egyptian, Yemeni, Sudanese, Pakistani and Indonesian communities. Borrowing needs cover annual rent paid in advance, a vehicle or a business. Sums lent between compatriots often rest on nothing more than a person's word.
Law applicable to loans made in Jeddah
The framework is the same across the Kingdom: a SAMA licence to lend regularly, the ban on riba and the Civil Transactions Law in force since 2023. Our page on the Saudi peer-to-peer loan summarises its main principles.
Annual rent paid upfront: a local reason to borrow
Many residential leases in Jeddah require payment every six months or every year. A tenant who borrows from a relative to cover this rent should state the purpose of the loan, the amount in riyals and a realistic monthly schedule in the contract.
Islamic Development Bank and a halal finance culture
The Islamic Development Bank has its headquarters in Jeddah, a symbol of a city attached to sharia-compliant contracts. Between individuals this means a qard, an interest-free loan; financing with a profit margin must go through a licensed institution.
Securing the loan with a Nafith sanad lamr
A Jeddah trader who advances money to a cousin can require an electronic promissory note issued on Nafith. In case of default, this instrument allows the lender to go straight to the enforcement court without waiting for a prior judgment.
Pilgrims in transit and requests for money
King Abdulaziz Airport receives millions of pilgrims each year on their way to Mecca. Some run out of money and ask for loans; see our page on the peer-to-peer loan in Mecca for the risks specific to this situation.
Students at King Abdulaziz University
King Abdulaziz University brings together tens of thousands of students, including foreign scholarship holders. Loans between students for housing costs or a ticket home should stay modest, be written down and be repaid by traceable bank transfer.
Fake investors and phantom lenders on the Corniche
Scammers pose as Jeddah businessmen or as subsidiaries of well-known banks and offer fast loans in exchange for registration fees. Our list of fake private lenders describes the most widespread names and techniques used against borrowers.
Jeddah: where to report a loan scam
Jeddah residents report online fraud through Absher, Kollona Amn or the national portal. They should also alert their bank for a possible recall of funds, then turn to SAMA Cares if the bank does not handle the complaint properly.
Transfers to Egypt, Sudan or Yemen
Repayments between compatriots often go to family back home. Only licensed banks and transfer operators provide reliable proof; an informal repayment cannot be demonstrated before a Saudi or foreign court if the parties later disagree about the balance.
Loans between partners in souks and family businesses
When a partner advances funds to the family company, a capital contribution must be distinguished from a personal loan. A clear contract approved by a lawyer or a notary licensed by the Ministry of Justice avoids later inheritance disputes.
How to lend safely in Jeddah
- Identify the precise purpose of the loan, for example annual rent, a vehicle or a stock of goods.
- Draft a contract in Arabic stating that no interest applies, the amount in riyals and each due date.
- Have the borrower approve a Nafith promissory note covering the full sum lent.
- Pay the funds by Saudi bank transfer and keep proof of the transaction.
- File every repayment with a bank statement or a receipt signed by the creditor.
- Refuse any request for upfront fees and check the licence of any company with SAMA.
Indicative costs of a private loan in Jeddah
| Heading | Indicative estimate | Note |
|---|---|---|
| Agreed interest | 0 SAR in principle | Sharia-compliant qard hasan |
| Electronic promissory note | Low, indicative | Fee shown on Nafith |
| Licensed lawyer or notary | Varies with the professional | Recommended between partners |
| International repayment transfer | Varies with the provider | Compare licensed operators |
| Registration fees demanded by a scammer | Probably lost for good | Never pay in advance |
File to put together in Jeddah
- National ID, iqama or passport
- Proof of income or commercial register extract
- Signed loan contract in Arabic
- Promissory note issued on Nafith
- Residential lease if the loan finances rent
- Bank receipt for the payment
Mistakes to avoid in the port city
- Lending to a souk partner on a simple word, with no contract or promissory note, relying on family reputation.
- Paying registration fees to a so-called Jeddah businessman you met on Instagram who promises a quick loan.
- Advancing money to an unknown pilgrim whose identity and home address are a mystery to you.
- Mixing up a capital contribution and a personal loan in a family business, at the risk of an inheritance dispute.
- Repaying a compatriot through an unlicensed transfer middleman who issues no written receipt at all.
Jeddah residents' questions on private loans
Can I lend money to a pilgrim I met in Jeddah?
Nothing forbids it, but recovery will be almost impossible once the pilgrim has gone home. Instead, direct the person to their consulate or licensed travel agency, which have assistance procedures for pilgrims in difficulty.
Should a loan to pay annual rent mention the lease?
It is not compulsory, but citing the lease and its amount strengthens proof of the loan's purpose. Attach a copy of the rental contract to the file and match the schedule to the lease term to avoid taking on debt twice.
Do Jeddah traders need a licence to lend?
An occasional loan to a relative or partner does not require a licence. However, regularly offering loans to the public is a financing activity reserved for entities authorised by SAMA, the Saudi Central Bank.
How should I react to a fake lender targeting Jeddah?
Stop all contact, pay nothing, take screenshots and report the profile through Absher or Kollona Amn. If you have already transferred money, contact your bank immediately to try to block the payment.