The Central Bank unveiled yesterday the draft loan-based crowdfunding system and published it to solicit opinions on it through its website, allowing small and large business borrowers to obtain annual funding up to a maximum of AED 10 million in any calendar year.


The Central Bank said it regulates and licenses crowdfunding platforms in the UAE, pointing out that the aim of the new system is to set the minimum standards required for loan-based crowdfunding platforms, as well as establish a framework for licensing, regulating and monitoring crowdfunding platforms for the purpose of protecting the financial system. Of the risks posed by crowdfunding platforms and consumer protection in the country.

He added that «the provisions of this system apply to people (regardless of place of residence), who participate in crowdfunding operations based on loans in the UAE except for free zones». The CBF explained that the crowdfunding platform is involved in crowdfunding activities in the UAE, as follows: If it is based in the UAE or hosted in the UAE, or use an existing address in the UAE for correspondence, or invite customers residing in the UAE to participate in Crowdfunding based on loans.


The CBB pointed out that the categories of crowdfunding platforms are classified according to the size of its lending into two categories. The first is “large” in which the cumulative loans delivered during the year are AED 5 million or more, while the second category is “small” in which the accumulated loans are Less than AED 5 million will be delivered during the year.

According to the system, the crowdfunding platform must employ a sufficient pool of staff with the qualifications and competencies required to provide the various individual and collective skills and expertise needed to manage it properly and rationally.

The crowdfunding platform should also verify that the following persons are merit and integrity: Board Members, CEO or General Manager, CFO or equivalent, Risk Manager or equivalent, Compliance or equivalent manager, Money Laundering Reporting Officer, Sharia advisor when it comes to Islamic products.

Definitions and Supplements

The new system came in 10 articles, which included tariffs and ways to apply for a license, and the validity and cancellation of the license, as well as prudential requirements and governance and risk governance framework, internal controls and doing business.

The Central Bank has attached three regulations to its Risk Governance Framework.


The new crowdfunding system defined this type of funding as the process of raising funds from multiple people through a dedicated platform, explaining that the crowdfunding platform is based on an Internet, social networking site, or other similar means for crowdfunding purposes. It acts as an intermediary between lenders and borrowers involved in an existing crowdfunding process, operating using a delivery platform or bidding business model, whereby lenders capture investment opportunities, in which loans are priced by bidding methodology.

- Classification of crowdfunding platform categories according to the size of lending.