FSA confirms the presence of clear strategies for crowdfunding platforms to support emerging projects

Al-Maamari: Crowdfunding platforms act as a major driver of the digital economy and foster innovation in our societies

Total volume of crowdfunding since 2022 is about RO 5.8 million until the first quarter of 2024.

Ahmed Ali Al Maamari, Executive Vice President of the Financial Services Authority (FSA) clarified that the crowdfunding market in the Sultanate of Oman has become one of the important financing tools for expanding financing options for the owners of small and medium enterprises and is considered a major driver of the digital economy and promoting innovation in our societies. He stressed that there is an increasing demand and great confidence in financing through crowdfunding platforms, as the total volume of crowdfunding since the actual inception of the platforms in 2022 amounted to about RO 5.8 million until the first quarter of the current year since the licensing of the first platform in the Sultanate of Oman, with funding of more than 100 commercial projects in the logistics, oil and gas, services, technology and other sectors.

This came in the opening speech delivered by Al-Maamari at the crowdfunding platforms workshop titled “Challenges and Growth Opportunities”, organized by the FSA in cooperation with 17 government and private entities, whereas he explained that crowdfunding platforms contribute, through their financial technologies, in raising funds to expand the financing base for emerging projects. They also contribute to enhancing innovations and competitive capabilities in the markets, adding that the Omani experience with this type of financing is not without challenges that require the crowdfunding platforms to address them effectively to ensure the continuity and success of the experience on the long term.

Al-Maamari explained that the workshop organized by the FS A embodies the community partnership approach to identify the challenges of the crowdfunding market in the Sultanate of Oman and to discuss growth opportunities in this important financing sector. He pointed out that the experience of the FSA to regulate this type of financing instruments was launched from the beginning with spirit of flexibility and facilities that ensure rapid provision of this option to support emerging companies, and the FSA will continue to evaluate the legislative structure and its adequacy to serve the consumers to ensure the provision of a safe investment environment in the Sultanate of Oman.

The gathering resulted in recommendations from experts and participants that would enhance the role of crowdfunding platforms in supporting innovation and leadership in the national economy in an effort to achieve the desired sustainable development. The workshop recommended activating continuous communication between licensed crowdfunding platforms as well as commencing  legislative amendments to the rules  of crowdfunding platforms in addition to  encouraging licensed companies to cooperate with Mala’a Center (Oman Credit and Financial Information Center) to know customer risks and follow up of digital transformation of the systems of buy and sale contracts in commercial registers, in addition to coordination between the FSA and the Ministry of Housing and Urban Planning on supporting real estate projects through the platforms.

The workshop included a number of presentations and working papers on the role played by crowdfunding platforms. The workshop also included a panel discussion on the challenges and obstacles facing crowdfunding platforms.

t is worth noting that the FSA had issued crowdfunding regulations under Decision No. (153/2021), which included regulatory provisions characterized by flexibility and stimulating facilities in order to support small and medium enterprises. The legislator has specified that the capital of the company that wishes to carry out the activity of crowdfunding platforms should not be less than RO 25,000, which is an opportunity for Omani youth and support for launching national financing platforms of various types, to finance investment initiatives in any of the promising economic and productive sectors.