SAMA Updates Rules for Engaging in Debt-Based Crowdfunding
Debt-based crowdfunding companies raise funds from participants through a platform to subsequently lend to a beneficiary. The rules for engaging in debt-based crowdfunding provide guidelines for these companies regarding licensing and operational requirements. For example, a minimum capital of SAR 5,000,000.00 is required to obtain a license. The Saudi Central Bank (SAMA) recently published an updated version of these rules following a public consultation (see this publication ‘ Saudi SAMA Seeks Feedback on Updated Debt-Based Crowdfunding Regulations’).
The updated rules add more disclosure requirements, including the disclosure of default rates through the platform. Additionally, debt-based crowdfunding companies may not offer financing amounts exceeding SAR 7,500,000. However, higher amounts are allowed for large commercial enterprises, licensed real estate development companies, or when a written no-objection is obtained from SAMA.
Saudi Arabia currently has 11 debt-based crowdfunding companies (source: SAMA). These are:
Nayifat Finance Company
Lendo Saudi
Manafa
Forus
Tameed
Raqamyah
Themar
Dnaneer Financing Company
Thara Crowd Lending Company
Funding Souq
Hala Financing Company
Click here for the updated Rules for Engaging in Debt-based crowdfunding (October 2024 version).
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