Crowd funding is the practice of raising fund(minor amounts) for a project or venture from large number of people. Saudi Arabia’s Central Bank and the largest lending regulator has made some new rules that puts light on the crowd funding actions also on the overall liquidity pool within the country. SAMA known as and being a territories central bank has rolled up 5million Saudi riyals which is $1.33million for many organizations by briefly checking their licence for crowd funding action. The regulator said that the core objective of the new framework is to attract the new investors and firms. The Central Bank said its because of SAMA’s effort to support the growth opportunities also for the economic development that the rules are issued, the new rules lead them to achieve their goals by 2030.
Crowdfunding can be done via any platform like online, advertising, talking to people directly. This approach is mostly followed by start-ups or small businesses. Saudi Arabia, being the Arab world’s principal economy and Opec’s major crude exporter is targeting at renovating its economy radically. Also trying to make the non-oil sector be independent of oil revenues. The global crowd funding market is targeted to triple i.e $13.9 billion (2019) to $39.8 billion by 2026.
The Central Bank of Bahrain and the Central Bank of UAE have already got the new rules in place. Dubai based snack establishment is among the smaller businesses that has achieved the crowd funding in recent days. This firm elevated Dh3m ($816,771) in two consecutive fundraising rounds in the month of November which got investors from Switzerland and Singapore also from other kingdoms of Saudi Arabia and UAE.
