Technology 3 min read

Saudi Arabia is Using Fintech to Move Away From an Oil-Based Economy

Saudi Arabia is actively working towards a more financially independent economy with investment into a number of fintech startups within the country. | Image By wajedram | Shutterstock

Saudi Arabia is actively working towards a more financially independent economy with investment into a number of fintech startups within the country. | Image By wajedram | Shutterstock

The first two financial technology startups just received licenses from Saudi regulators to launch crowdfunding platforms in the country.

Strong winds of change are blowing in the Kingdom of Saudi Arabia.

It may be a good time for Saudi women as most social change moves are directed toward them.

Finally, women in Saudi Arabia can drive on the country’s roads, unbothered by traffic police. Just last month, authorities started issuing driving licenses to Saudi women, lifting a decades-long ban, though most already had foreign licenses.

Besides female drivers, since last January, women can now enter Saudi stadiums to cheer their favorite soccer teams and attend sports events.

If social change is a matter of singing royal decrees that lift oppressive long-standing rules, tackling economic reform is quite the difficult job.

On that regard, adopting fintech to revamp the country’s financial system is one of the main tasks within the Saudi efforts to diversify the economy.

Two Startups to Break Ground on Saudi Fintech

The ultra-conservative and oil-rich monarchy is working to upgrade its image and embrace a new status as an open country and cut back on its oil dependency.

The Crown Prince Mohammed bin Salman’s roadmap for a prosperous kingdom, both socially and economically, is outlined in his Vision 2030 mega plan.

This blueprint for the future includes Neom, a 10,000-sq mi futuristic green megalopolis that will cost half a billion dollars.

Read More: Saudi Arabia’s NEOM Will Take us From oil to Megacities

Beyond the social openness, Saudi Arabia wants to be open to the world’s money. Overhauling the Saudi capital market is one of Vision 2030’s 12 major programs.

The Capital Market Authority (CMA), the Saudi financial regulatory authority, has officially jumpstarted the fintech ecosystem in the kingdom.

On July 10, CMA announced it had granted permissions to two fintech firms to launch trials of their crowdfunding investment platforms.

The first startup to get the ExPermits (Financial Technology experimental permit) is Manafa Capital, a Riyadh-based firm founded in January 2018 by Manafa LLC.

The second Fintech Expermit went to Scopeer, founded in 2017, the first crowdfunding platform in the kingdom.

Through the FTLL, CMA aims to create opportunities “to invest in small-to-medium-size companies and finance their activities, by bringing them together with interested investors through electronic platforms.”  said CMA’s Deputy for Strategy and International Affairs, “The crowdfunding platforms will provide capital needs of young entrepreneurs with new business ideas, which will assist in closing the gap between new entrepreneurs and traditional funding methods.”

For startups wanting to secure permission and commercialize their fintech services in Saudi Arabia, CMA said it will be accepting more applications later this year.

CMA’s licenses program is one of several initiatives aiming at boosting the nascent Saudi fintech market.

Last February, the Saudi Arabian Monetary Authority (SAMA), which acts as the central bank, partnered with Ripple to bring its Blockchain technology via a pilot program.

Upon the deal between SAMA and Ripple, Saudi banks will be able to use Ripple’s software xCurrentto handle instant payments into and out of the kingdom.

Will Fintech help Saudi Arabia ensure its after-oil future?

First AI Web Content Optimization Platform Just for Writers

Found this article interesting?

Let Zayan Guedim know how much you appreciate this article by clicking the heart icon and by sharing this article on social media.

Profile Image

Zayan Guedim

Trilingual poet, investigative journalist, and novelist. Zed loves tackling the big existential questions and all-things quantum.

Comments (0)
Most Recent most recent
share Scroll to top

Link Copied Successfully

Sign in

Sign in to access your personalized homepage, follow authors and topics you love, and clap for stories that matter to you.

Sign in with Google Sign in with Facebook

By using our site you agree to our privacy policy.