Saudi Arabia’s Authority Grants Fintech Licenses
Saudi Arabia’s securities regulator has approved its first two fintech licenses as a part of a drive to develop the fintech sector. The aim is to develop the fintech sector in Saudi Arabia under reforms planned to reduce the reliance on oil exports.
Saudi Arabia’s Capital Market Authority (CMA) announced the approval of the first two trial financial technology (fintech) licenses to Scooper and Riyadh-based start-up Manafa Capital. As per the reports, the trial licenses are meant to provide crowd-funding investment services in the Kingdom of Saudi Arabia.
Individual investors will make use of electronic platforms operated by the companies to fund small as well as medium-sized enterprises. This will be in exchange for shares in those enterprises.
CMA revealed that,
“The CMA’s trial financial technology initiative will help to enhance the competition in the financial market by through providing services related to the capital market with innovative finance methods offered to the market participants. The license will offer Crowd Funding Platforms, which plays an important role in financing entrepreneurs and small-to-medium-size companies.”
The ventures will possibly serve two important aspects of the reform program of Saudi Arabia:
1. Create jobs in Saudi Arabia by helping entrepreneurs obtain funds for new ventures
2. Broaden the capital market of Saudi Arabia
CMA had also said that after some time, it would receive applications for more fintech licenses this year. The Saudi Central Bank is also supporting fintech and had signed a deal in February with U.S.-based Ripple so that banks in Saudi Arabia can settle payments using blockchain software.
CMA also reported that the two licenses granted to the companies in the oil-rich country are the first results of the Financial Technology Laboratory initiative launched by the CMA at the beginning of 2018. The licenses are called as the Financial Technology Laboratory Licenses (FTLL) and are a part of a larger plan and wider reforms. The reforms are a part of Saudi Vision 2030. Saudi Arabia had expressed a great interest in the fintech industry.
Follow us on Telegram!