COMMENTS: Saudi regulators have just issued the first two licenses for crowd funding services companies, and more are on the way.
In a nutshell, Crowd Funding is a growing novel form of financing new companies and projects bypassing the investment companies, brokers, banks, lawyers and all the other service providers who end up with a hefty chunk of fees.
Crowd funded operation offer their projects to the public on the internet utilizing Blockchain platforms (and possibly crypto-currencies) and investors pay directly to their bank (or crypto) accounts… end of story.
This opens a lot of possibilities for economic growth, especially in the small and medium sized enterprises sector. However, it also opens possibilities for fraud and mismanagement and hence, needs to be closely regulated and monitored.
NEGATIVE FOR: If not regulated and supervised properly.
POSITIVE FOR: The Saudi economic diversification plans
IMPACT POTENTIAL: Medium
TIME SCOPE: Medium and Long Term