RIYADH: Saudi businesses are set to gain access to new crowdfunding solutions as Hala Payments Co. has received licensing approval from the Kingdom’s central bank to offer debt-based products. The Saudi-based fintech platform offers inbound and outbound payment options to small and medium enterprises, with over 50,000 merchants currently using its services, according to its website. With this approval, the total number of companies licensed to engage in this activity in the Kingdom has reached 11, while authorized finance companies now stands at 62, stated the Saudi Central Bank in a press release. Debt-based crowdfunding provides a pathway for projects or businesses in need of funding. Instead of relying on a single lender, borrowers secure loans from multiple investors. This model is particularly advantageous for small businesses or individuals who may face challenges obtaining loans from traditional banks. Essentially, it serves as a dual opportunity: borrowers receive the necessary funding, while investors earn returns by directly lending money. In January, SAMA issued a license to Thara, a debt crowdfunding platform, to operate in the Kingdom. The fintech firm specializes in financing real estate development projects, connecting individual and institutional investors with investment opportunities through Murabaha products. This decision to issue licenses falls within the framework of the central bank’s efforts to support and empower the finance sector, aimed at enhancing the effectiveness and flexibility of transactions, added SAMA. It also seeks to foster innovation and promote it, with the objective of enhancing the level of financial inclusion in the Kingdom and extending such services to all segments of society. SAMA emphasized the importance of dealing with licensed or authorized financial institutions, which can be verified by visiting its official website. The central bank warned that it may take any necessary actions, such as conducting on-site visits, meeting with the company’s executives, and reviewing its regulations, procedures, and records, to verify that the debt-based crowdfunding company has met all its requirements. It added that the license can be canceled if the firm requests cancellation, provides false information, violates rules or laws, delays starting activities for six months, or suspends operations for over three months without SAMA’s approval.