$5.1 million for social savings platform Hakbah to strengthen financial inclusion

Here’s Hakbah! The Saudi-based fintech savings platform that allows users to save and access funds via social savings.

Did we mention they just raised $5.1 million in their series A funding round?

• Established in 2018 by Naif AbuSaida, Hakbah has a customer base of over 500,000 users (of which 70% are between 21 and 35 years old) and is estimated to have helped as many as 18,000 customers to save over $35 million.

💰 Investor lowdown: The round was led by VentureSouq along with M-Capital and Bunat Ventures, and existing investors Global Ventures and Aditum Investment Management Ltd.

• This brings the company’s funding raised to date to $9 million. 

🌍 Savings crisis

In Saudi Arabia, a significant 70% of citizens do not have emergency savings, and the overall household savings rate is low, averaging only 1.6%. 

Factors such as an underdeveloped social safety net, inadequate pension systems, along with high personal debt, inflation, and interest rates, make it challenging for Saudi households to save.

Additionally, the region has a significant largely financially dependent young population, which contributes to lower savings rates as more household income is spent on immediate consumption rather than saving.

🤝 Social solidarity 

Hakbah is tackling this problem head-on by digitising financial habits, leveraging data, needs and behaviours.

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Their platform enhances financial inclusion by seamlessly integrating with any banking system in less than a week. It features the digital transformation of traditional group savings (Jameya), aimed at addressing financial needs.

Popular in over 60 countries worldwide, savings groups are a popular and traditional savings behaviour. 

Hakbah's platform allows users to collectively prioritise their financial needs and share a rotating pool of money. Essentially, this system of social solidarity encourages greater accountability in saving among its users.

The result? An enhancement of traditional savings behaviour, enabling purpose-driven saving and boosting financial literacy.

• Hakbah has struck several blue-chip partnerships with the likes of Flynas, the national low-cost airline in Saudi Arabia and the Middle East, and has recorded an 18x increase in total savings under management and a 4x increase in revenue this year.

🔮 Flashforward

Hakbah’s goal is to double the individuals' savings ratio in Saudi Arabia by 2025.

The fresh funding will be used for product development with a focus on machine learning and improving the country’s savings engine, and also fuel the company’s expansion into two new regional markets in the future.