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. 

SINGAPORE: Oil prices extended gains from the previous session on Thursday on signs of stronger demand in the US, where data showed slower inflation than markets expected, bolstering the argument for an interest rate cut that could drive greater consumption, according to Reuters.

Brent futures rose 32 cents, or 0.4 percent, to $83.07 a barrel at 9:20 a.m. Saudi time, while US West Texas Intermediate crude gained 31 cents, or 0.4 percent, to $78.94.

“A more tamed read for US April inflation and a far weaker-than-expected read in US retail sales seem to offer room for the Fed to consider earlier rate cuts, with market expectations leaning more firmly for policy easing to kickstart in September this year,” said IG market strategist Yeap Jun Rong.

“The larger-than-expected drawdown in US crude inventories for last week also offered some calm, while geopolitical tensions continue to rock on in the Middle East.”

US consumer prices rose less than expected in April in a boost to financial market expectations for a September rate cut by the Federal Reserve, which could temper dollar strength and make oil more affordable for holders of other currencies.

Elsewhere, US crude oil, gasoline and distillate inventories fell, reflecting a rise in both refining activity and fuel demand, showed data from the Energy Information Administration.

Crude inventories fell 2.5 million barrels to 457 million barrels in the week ended May 10, the EIA said, versus the 543,000 barrel consensus analyst forecast in a Reuters poll.

Signs of slowing inflation and stronger demand were supporting prices, ANZ Research also said in a client note, as is geopolitical risk, which it noted remains elevated.

In the Middle East, Israeli troops battled Hamas militants across Gaza, including Rafah, which had been a civilian refuge.

Ceasefire talks mediated by Qatar and Egypt are at a stalemate, with Hamas demanding an end to attacks and Israel refusing until the group is annihilated.

Gains were constrained after the IEA trimmed its forecast for 2024 oil demand growth, widening the gap between its view and that of producer group OPEC.

Global oil demand this year will grow by 1.1 million barrels per day, the IEA said, down 140,000 bpd from its previous forecast, largely due to weak demand in developed nations of the Organization for Economic Co-operation and Development.