The launch of Dubai-based Beehive’s debt-based crowdfunding platform in Bahrain is expected to open up new funding avenues for small and medium enterprises (SMEs) and help drive innovation, according to the Economic Development Board (EDB).
The EDB’s financial services business development senior manager Dalal Buhejji has said access to finance is an essential element of any start-up ecosystem and crowdsourcing has a significant role to play as an additional source of funding for businesses that have previously been dependent on bank finance.
She said Beehive Bahrain would also create a new route for investors to gain exposure to growth in the kingdom’s SMEs, complementing existing platforms such as the Bahrain Investment Market, which is tailored to fast-growing businesses.
Launched in Dubai in 2014, Beehive is MENA’s first regulated peer-to-peer lending platform.
It uses innovative crowdfunding technology to eliminate the cost and complexity of conventional finance by connecting businesses directly with investors.
The result is a more efficient, streamlined process that gives businesses faster access to lower cost loans and investors better returns on their money and diversified risk.
Beehive’s chief executive Craig Moore said it would offer fast, affordable alternative finance to pioneering businesses.
The collaboration with the EDB, he added, stemmed from an alignment between the company’s mission with Bahrain’s vision of entrepreneurship as a high-potential driver of economic diversification and growth.
Beehive’s launch in Bahrain follows new regulation issued by the Central Bank of Bahrain (CBB) in 2017 to enable both conventional and Sharia-compliant financing-based crowdfunding for small and medium sized businesses.
Under the Central Bank of Bahrain (CBB) regulation, Bahrain-based peer-to-business crowdfunding platforms are able to fund start-ups and SMEs in Bahrain as well as regionally and internationally.
Welcoming Beehive’s choice of Bahrain to establish the country’s first financing-based crowdfunding platform, CBB executive director of banking supervision Khalid Hamad said in the statement that the licence issued to Beehive was a first-of-its-kind in the kingdom.
It is a step forward in promoting SMEs and start-ups as it gives investors an option to securing the required financing, he added.
The new rule, said Mr Hamad, was also a reflection of the regulator’s continuous efforts in providing an optimal mix of policies and products to improve the quality and competitiveness of services in the financial sector.
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