Dubai aids fintech start-ups with crowdfunding rules

The regulator of the Dubai International Financial Centre (DIFC) has sought to boost the financial technology sector by establishing rules for crowdfunding.

Loan and investment-based crowdfunding platforms offer an alternative to bank financing for start-up companies, which often struggle to raise capital, it said.

“Conventional lenders are sometimes unwilling or unable to support small and medium enterprises (SMEs) given their often-limited asset pool or lack of a proven record of company operations,” said a statement from the regulator, the Dubai Financial Services Authority. “This makes it difficult for SMEs to do business; when they do get financing it can be expensive or with inflexible terms.”

The DIFC is competing with other financial centres in the region to become a home for entrepreneurs working in financial technology. Bahrain and the nearby Abu Dhabi Global Market have also launched initiatives to promote innovation in financial services.

In the past, a combination of legal and demographic factors have caused the Gulf states to struggle to provide the flexibility to allow start-up businesses to flourish.

©2017 funds global mena

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