Qatar Central Bank (QCB) has issued instructions for the loan-based crowdfunding regulation. This has been done for the purpose of licensing and regulating (loan-based crowdfunding activities and services in Qatar).
Qatar Central Bank has announced that all companies wishing to work in this field must apply to obtain the necessary license from QCB. This is in line with the region’s financial sector strategy and its fintech strategy. In March 2023 QCB revealed the latter which among other goals, wanted to triple the number of licensed fintechs in the country in the next five years.
This would be achieved by improving the fintech foundations and infrastructure in the region. This is in addition to building out niche roles which would act as growth drivers. Furthermore, the QCB aims to expand fintechs outreach by building out its talent centre of excellence and the impact fintech has in daily life.
Key regulations that will be completed by 2030 include:
- Buy Now Pay Later (BNPL)
- Digital banking
- Distributed Ledger Technology (DLT)
- Open banking and standards
- Artificial intelligence
- Cloud computing
Loan-based crowdfunding regulation
Loan-based crowdfunding platforms are innovative financial platforms. They enable borrowers in need of financing to communicate with various investors and obtain short-term financing. Borrowers, such as SMEs, who find it difficult to access traditional bank loans, can obtain the financing necessary for growth of their business and overcome the challenges that they may face with the expansion of their projects.
Loan-based crowdfunding platforms represent an important opportunity for investors to diversify their investments and participate in supporting SMEs.
Qatar Central Bank aims to provide effective and valuable initiatives that help create an environment conducive to the growth of the fintech sector in the country. This will be particularly impactful as these platforms support the development of the financial sector and enhance the transparency, efficiency and ease of the borrowing process