Oman’s Capital Market Authority (CMA) announced its approval of licensing crowdfunding platforms, which will allow a new financing option for SMEs in the Sultanate.
The CMA’s board of directors agreed on Sunday to amend the existing capital market legislation to allow for crowdfunding platforms to be established in the country.
In a statement released by the board, the CMA asserted that the approval of crowdfunding platforms is intended to create more jobs, encourage economic development and allow financial inclusion for SMEs.
This comes as a part of a larger push made by Oman’s government to provide financing facilities for SMEs and micro-projects.
The CMA’s launching and regulating of crowdfunding platforms will help to overcome what the CMA report identified as one of the key challenges facing these projects: “The banking sector’s reluctance to fund such projects due to the related risks and lack of proper guarantees to convince the banks to grant funding facilities beside the impact of the global financial crisis and the Covid-19 pandemic on the banking sector and the liquidity crunch.”
Crowdfunding will be available to all SMEs that are officially registered under the Ministry of Commerce, Industry and Investment Promotion (MoCIIP).
“These types of financing options will be of great benefit to SMEs, as well as micro-enterprises,” an official from the CMA told Times of Oman. “Crowdfunding will not need guarantees, as is often the case with the banking sector.
The official continued: “Owners of companies of this nature often face challenges in securing finances, since banks often ask for guarantees, and are unwilling to risk committing funds to them.”
Currently, the drafted crowdfunding platforms regulations are undergoing the final stages of revision.
The CMA report said that the regulations will ensure that the crowdfunding platforms will not become conventional lending institutions. Additionally, the regulations will be posted for public feedback and consultation.
The first crowdfunding platform in Oman is set to be launched by the year’s end.
Source:https://www.arabianbusiness.com/startup/466972-omans-capital-market-authority-approves-licensing-for-crowdfunding