Saudi Arabia’s securities regulator approved its first two financial technology licenses on Tuesday, Reuters reported.
The move, according to the report, is part of a drive to develop a fintech sector in the Arab world’s biggest economy under reforms designed to reduce reliance on oil.
The Capital Market Authority approved licenses allowing Riyadh-based start-up Manafa Capital and another firm, Scopeer, to offer crowdfunding investment services on a trial basis.
Individual investors will use electronic platforms operated by the companies to fund small and medium-sized enterprises in exchange for shares in those enterprises.
The ventures could serve two aspects of Saudi Arabia’s reform program: broaden its capital markets, and create jobs by helping entrepreneurs obtain funding for new ventures. The CMA said it would receive applications for more fintech licenses later this year.
The Saudi central bank has also thrown its weight behind fintech. In February, it signed a deal with U.S.-based Ripple to help banks in the kingdom settle payments using blockchain software.
Gulf Capital, an Abu Dhabi-based private equity firm, said in May that it had bought a stake in Geidea, the leading provider of electronic payment solutions in Saudi Arabia, in a deal worth over 1 billion riyals ($267 million).