The regulator of offshore financial hub the Dubai International Financial Centre (DIFC) is preparing to license loan-based crowdfunding platforms for the first time.

The Dubai Financial Services Authority (DFSA) has begun a consultation process on its proposed framework for the sector, which is also sometimes known as peer-to-peer lending. The consultation, which was launched on January 31, is the first in what is promised to be a series of initiatives covering crowdfunding and the financial technology (fintech) industry more broadly. The DFSA is says it has already had discussions with some firms who are keen to run loan-based crowdfunding activities from the DIFC, which these days is the pre-eminent hub for financial services in the Middle East.

Crowdfunding is a useful source of finance for early-stage companies, but its development in the region has been relatively limited so far. A number of real estate-focused crowdfunding platforms have emerged, such as Humming Crowd Realty and Durise, while the Aflamnah platform is dedicated to raising money to make films. Other, more generalist networks include the reward-based site Zoomal, based in Lebanon, and equity crowdfunding platform Eureeca, which is based in Dubai and which has been operating from the DIFC since late 2016.