The Central Bank of Oman (CBO), in collaboration with 51%-state-owned telecommunications company Omantel, has selected five fintech start-ups, including a Shariah compliant one, to join its six-month accelerator program dedicated to empowering fintech start-ups through mentorship, training, networking and fundraising support.
One of the five start-ups is Shariah compliant, namely Hal Capital, an alternative financing products and services provider to SMEs and individuals. The other four start-ups are buy-now-pay-later platform TasHeel Financial Solutions; Al-Jumaeiah, an application that helps create, manage and organize different Jamaeiahs (groups) on a single platform; Wadiaa, an equity-based crowdfunding and P2P lending solution for start-ups and SMEs; and Zumr Fintech which provides microfinancing opportunities by encouraging the habit of saving.
In addition to receiving free desk space at the Omantel Innovation Labs, selected start-ups will also gain access to a network of over 100,000 investors, corporates and mentors and will be eligible for perks worth over US$250,000 in cloud computing, legal services, accounting and other areas.
The CBO has taken robust steps over the last three years to establish the regulatory framework and develop an ecosystem which is geared toward the growth of the Omani fintech sector.
For instance, the CBO launched its Fintech Regulatory Sandbox Framework in 2020 which is a closed testing environment in which the CBO will grant certain regulatory exemptions for fintech companies to live-test their banking, payments and other innovative financial services solutions on volunteer customers in order to prove their viability.
Another key piece of legislation playing its role in promoting fintech in Oman is the Oman Capital Market Authority (CMA)’s crowdfunding regulations promulgated in 2021. In March 2022, the CMA approved the licensing of the first Islamic global crowdfunding platform in the country to Ethis Investment Platform.
Besides that, Oman’s first Islamic bank, Bank Nizwa, announced its partnership earlier last month with Islamic fintech firm IFIN to introduce an instant digital Shariah compliant goods financing product.
Beyond Oman, regulatory sandboxes are becoming part of a common trend in fintech ecosystems in the Middle East, particularly in the GCC. For instance, Abu Dhabi Global Market announced the first regulatory sandbox in the MENA region, ADGM RegLab, in November 2016. The following year, both the Dubai Financial Services Authority and the Central Bank of Bahrain created their own regulatory sandboxes.
In Saudi Arabia, Saudi Central Bank (SAMA) launched the regulatory sandbox in 2018 which has been an active one since. As of October 2022, 42 fintech firms have been permitted to operate under the framework. Of those, 15 have graduated by obtaining full authorizations and were licensed by SAMA.
Other countries in the MENA region, including Kuwait, Qatar, Jordan, Tunisia and Egypt, have also launched their respective regulatory sandbox to support the growth of the fintech sector.