Saudi Arabia's Central Bank set new rules governing crowdfunding-based activities as it looks to open up more avenues of funding for smaller businesses and broaden the pool of liquidity in the kingdom.
Sama, as the central bank is known, has set a minimum capital requirement of 5 million Saudi riyals ($1.33m) for entities looking for a licence for crowdfunding activities, the regulator said in a statement on its website.
The new framework is aimed at attracting “a new segment of investors and companies” and owners of “small and medium capital”, as well as "encouraging innovation in product financing", the regulator said.
“The issuance of these rules comes as part of Sama's efforts to support the opportunities for growth and economic development in the kingdom, in order to achieve the goals of the kingdom's Vision 2030 by supporting and organising modern financing activities,” according to a central bank statement.
Saudi Arabia, the Arab world’s biggest economy and Opec’s biggest crude exporter, is looking to radically overhaul its economy. Development of the non-oil sector, including the kingdom’s financial services sector, is a central plank of Riyadh’s Vision 2030 agenda, an overarching programme to cut its dependence on oil revenue.
Crowdfunding is way of raising small amounts from a large number of investors through a digital platform. Small businesses or start-ups usually take this alternative approach of financing to start new ventures or secure growth capital to increase scale.
The global crowdfunding market is estimated to triple from $13.9 billion in 2019 to $39.8bn in 2026, according to Statista research data. The concept, which originated in the US, is gaining traction in the GCC's six-member economic bloc.
The Central Bank of Bahrain and the Central Bank of the UAE have already rolled out their crowdfunding regulations.
Dubai-based fresh snack company Fruitful Day is among smaller businesses that have tapped crowdfunding in recent months. The firm raised Dh3m ($816,771) in two successive fundraising rounds in November, attracting investors from as far away as Switzerland and Singapore, as well as from Saudi Arabia and the UAE.
In September, Dubai SME, part of Dubai's Department of Economic Development, said it is partnering with peer-to-peer lending platform Beehive to allow individuals to invest in SMEs in the country through crowdfunding.
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- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
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SMEs in the UAE are defined by the number of employees, annual turnover and sector. For example, a “small company” in the services industry has six to 50 employees with a turnover of more than Dh2 million up to Dh20m, while in the manufacturing industry the requirements are 10 to 100 employees with a turnover of more than Dh3m up to Dh50m, according to Dubai SME, an agency of the Department of Economic Development.
A “medium-sized company” can either have staff of 51 to 200 employees or 101 to 250 employees, and a turnover less than or equal to Dh200m or Dh250m, again depending on whether the business is in the trading, manufacturing or services sectors.
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Al Ghaf Honey
The Al Ghaf tree is a local desert tree which bears the harsh summers with drought and high temperatures. From the rich flowers, bees that pollinate this tree can produce delicious red colour honey in June and July each year
Sidr Honey
The Sidr tree is an evergreen tree with long and strong forked branches. The blossom from this tree is called Yabyab, which provides rich food for bees to produce honey in October and November. This honey is the most expensive, but tastiest
Samar Honey
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The calling app is available to download on Google Play and Apple App Store
To successfully install ToTok, users are asked to enter their phone number and then create a nickname.
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Users can also invite other contacts to download ToTok to allow them to make contact through the app.
