Saudi Arabia’s Capital Market Authority (CMA) confirmed on Tuesday that it had awarded first two fintech licenses on a trial basis to Riyadh-based firms – Manafa Capital and Scopeer – which qualify them to provide crowdfunding investment services in the oil-rich country.
Individual investors will now be able to benefit from electronic crowdfunding platforms which will allow them to obtain shares in small and medium-sized enterprises (SMEs), in exchange for their investments, as per a report by Reuters,
These licenses, which are part of the CMA’s Financial Technology Laboratory initiative, and dubbed the Financial Technology Laboratory Licenses (FTLL) are part of a larger plan and wider reforms – the Saudi Vision 2030 – to develop the fintech sector in the country and reduce the Arab kingdom’s reliance on oil exports. The move is also expected to contribute towards broadening the country’s capital markets by enhancing competition via the provision of innovative finance methods, and creating more jobs by providing avenues for funding of SMEs.
According to the CMA’s Deputy for Strategy and International Affairs, Dr. Bander Assad Alsajjan:
“The FTLL for crowd funding services aims to provide opportunities to invest in small-to-medium-size companies and finance their activities; by bringing them together with interested investors through electronic platforms. The crowd funding platforms will provide capital needs of young entrepreneurs with new business ideas, which will assist in closing the gap between new entrepreneurs and traditional funding methods.”
Saudi Arabia has expressed great interest in the burgeoning fintech industry; earlier this year, the kingdom signed a deal with fintech startup Ripple (the company behind XRP), which will help banks in the country settle their payments via the use of blockchain technology, and Ripple’s xCurrent product, in particular.
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