The Saudi Capital Market Authority (CMA) announced the approval of the first two trial financial technology licenses to Manafa Capital and Scopeer.
The trial licenses will qualify the two companies to provide crowdfunding service in the Kingdom of Saudi Arabia.
The two licenses are the first results of the Financial Technology Laboratory initiative launched by the CMA early 2018.
The CMA's trial financial technology initiative will help enhance the competition in the financial market through providing services related to the capital market with innovative finance methods offered to the market participants.
The licensing will offer Crowdfunding Platforms, which plays an important role in financing entrepreneurs and small-to-medium-size enterprises (SMEs).
The Financial Technology Laboratory License (FTLL) is one of the CMA's strategic initiatives resulting from the CMA's "Financial Leadership 2020"program, which works under the umbrella of the Financial Sector Development Program (one of the Kingdom's Vision 2030 execution programs).
"The FTLL for crowdfunding 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,” CMA's Deputy for Strategy and International Affairs Dr. Bander Assad al-Sajjan explained.
He said that the crowdfunding 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.