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FINTECH came under the spotlight at the highly-successful Gateway Gulf Investor Forum in Bahrain fresh on the heels of news that new funding avenues are to be opened for innovative young businesses.
Following instructions from His Royal Highness Prince Salman bin Hamad Al Khalifa, the Crown Prince, Deputy Supreme Commander and chairman of the Bahrain Economic Development Board (EDB), the Bahrain Development Bank (BDB) launched a $100m Venture Capital Fund of Funds aimed at boosting the start-up ecosystem in Bahrain and the Middle East.
The Al Waha Fund of Funds will invest in venture capital funds that have a presence in Bahrain – providing additional capital to those supporting start-ups. It was launched at the forum.
One session at the forum specifically focused on FinTech and Blockchain, the software that first emerged as the system underpinning digital – or crypto – currency.
The Central Bank of Bahrain’s Governor Rasheed Al Maraj said: “When we first started looking at FinTech, the biggest hurdle was the fear factor. For any regulator to think about change in the landscape can bring anxiety because naturally we target certainty, so we avoid risk that can prevent financial instability, but what we decided at the CBB is that this technology is of immense benefit.
“That’s why we took the dive and made the necessary regulations and pushed the industry to start looking at this and introduce changes we think will help the economy at large.”
Bahrain’s ecosystem has benefitted from a number of major economic reforms in recent years, including a reduction in the minimum capital required for starting a business, measures to enable onshore crowd-funding in conventional and shari’a-compliant finance, plus the introduction of a regulatory sandbox for FinTech.
These advances were reflected in the recent Global Startup Ecosystem Report, released by the Global Entrepreneurship Network and Start-Up Genome, which included Bahrain in global ‘ecosystems to watch’ in both FinTech and gaming. Bahrain was the only Arab country to be included in either list.
The new fund launch will provide further stimulus. Khalid Al Rumaihi, the EDB chief executive, said:
“This is very exciting news for the start-up ecosystem both here in Bahrain and across the Middle East.
“We know that access to capital is one of the biggest constraints on growth for start-ups, so this fund will help businesses in Bahrain and across the Middle East to get access to the capital they need to expand.”
As well as providing additional capital to regional start-ups, the fund is expected to help attract additional venture capital funds to Bahrain.