The Capital Market Authority (CMA) of Saudi Arabia recently awarded two fintech licenses for the first time to firms based in Riyadh. The licenses have been awarded on a trial basis to Scopeer and Manafa Capital making them eligible to offer services related to crowdfunding investments in Saudi Arabia.

Saudi Arabia wants to reduce reliance on oil

Both Scopeer and Manafa are early-stage companies. Founded in 2017, Scopeer’s online platform is still undergoing development. It is not clear when Manafa Capital was established however through its website it allows businesses and investors to use its platform. According to CMA, the application process for receiving fintech licenses will reopen later in 2018. Saudi Arabia has approved the licenses for fintech firms to boost fintech sector in the biggest economy of the Arab world with the view to cut down reliance on the oil-sector.

These licenses are a part of the Financial Technology Laboratory initiative of CMA and are called Financial Technology Laboratory Licenses (FTLL). The process is just a part of wider reforms related to the Saudi Vision 2030 document.

For investment in these fintech firms, individual investors will operate through electronic platforms owned by companies funding small and medium-sized enterprising units. The investors will in exchange gain shares in these enterprises.

Ventures to open job opportunities

Both the Scopeer and Manafa Capital ventures will serve as a reform program for the country, broaden its capital markets and introduce more job opportunities. The platform will help entrepreneurs receive more funding for new ventures. Incidentally, the central bank of Saudi Arabia is also favoring fintech firms.

At the start of the year in February the top bank of the country signed an agreement with Ripple (XRP) from the U.S. The agreement was signed to help the Saudi Arabian banks settle payments through blockchain software. A couple of months ago, a private equity firm from Abu Dhabi, Gulf Capital stated that it has invested in the popular electronic payment solutions provider, Geidea in Saudi Arabia. As per the report, Gulf Capital invested more than $267 million to acquire a stake in Geidea.