The Regulatory Framework on Crowdfunding was launched, today, at the Financial Services Commission (FSC), Ebène, in the presence of the Minister of Financial Services and Good Governance, Mr Mahen Kumar Seeruttun.
The Chairperson of the Financial Services Commission and First Deputy Governor of the Bank of Mauritius, Mr Mardayah Kona Yerukunondu, the Chief Executive of the FSC, Mr Dhanesswurnath Thakoor, as well as Captains of the Industry were present.
In his address, Minister Seeruttun stated that in line with its strategy to sustain the growth of the Fintech ecosystem in Mauritius, the FSC has embarked on a journey to enhance its regulatory framework to provide Fintech entrepreneurs with a conducive environment to grow their activities.
He underscored that the launch of the project will undoubtedly transform the financial landscape of the country. He recalled that one of his priorities as Minister of Financial Services and Good Governance is to foster growth, competitiveness and jobs to support Government in its mission of ensuring prosperity for all.
He dwelt on several initiatives implemented to that end, namely setting up of the Financial Services Consultative Council which has become an important platform for Public-Private engagement and dialogue; creating jobs and growth; and developing a strong, stable, sustainable financial services sector.
Minister Seeruttun observed that democratising access to capital is imperative to spur the vibrancy of the economy for a stronger society and a more inclusive nation. He rejoiced that crowdfunding represents a valuable addition to the plethora of products which have been introduced adding that crowdfunding will soon prove to be one of the strongest and one of the most popular components of our financial ecosystem.
He stated that crowdfunding will soon become an important Game Changer in our financial ecosystem adding that it will enable more SMEs to get access to finance to develop their ideas and grow their businesses. Government is working towards boosting the contribution and performance of the SME sector as a key driver of inclusive and balanced growth, he recalled while adding that the 10 Year Master Plan for the SME Sector provides the following targets to be reached by 2026: raising SMEs' contribution to GDP from 40% to 52%; raising SMEs' share of total national employment from 55% to 64%; and increasing current exports from less than 3% to about 18%.
Furthermore, Minister Seeruttun underscored that crowdfunding will be supporting various agendas from Fintech to Blockchain, from Green to Blue, from Sustainability to the Environment. In fact, the introduction of crowdfunding will bring to life the commitments taken at COP26 earlier this month, he added.
He stated that crowdfundees both locally and internationally will find many opportunities to diversify their investments on the basis of trust that the platforms are regulated and supervised by the FSC. Crowdfunding around the world today represents a multibillion-dollar industry and is still growing and according to the World Bank, crowdfunding in developing countries alone will reach nearly $100 billion by 2025, he said.
For his part, the Chairperson of the FSC, Mr M. K. Yerukunondu pointed out that the FSC has introduced the regulatory framework for investment-based crowdfunding to further diversify the product base of Mauritius as an International Financial Centre. The objective of this new framework, he said, is to create an ecosystem conducive for improving access to finance for both individuals and entrepreneurs. The FSC is no doubt confident that this new regulatory framework for investment-based crowdfunding will contribute to shape and improve access to finance for entrepreneurs, thus bolstering an entrepreneurial spirit in our country, he added.
He gave the assurance that as a forward-looking and responsible regulator, the FSC will ensure that licensed institutions conduct their businesses in a safe and sound manner and comply with all applicable laws. This will in turn spur growth in the Fintech sector, thus transforming it into a new pillar of the Mauritian economy, he added. He urged stakeholders to make the maximum use of this new digital platform which presents numerous opportunities for new start-ups.
For his Part, the Chief Executive of the FSC, Mr D. Thakoor, recalled that this new regulatory framework has been developed in close collaboration with industry stakeholders. It is also closely aligned with the FSC's Fintech Strategy to foster an increased access and adoption of digital financial services in Mauritius, he said.
He stated that innovation in financial services and the emergence of Fintech is the result of the convergence of a number of factors namely change in the marketplace, change in the behaviour of the customer, and change in the channel of transmission of goods and services.
According to him, crowdfunding will become a key element to our financial ecosystem. Crowdfunding as an alternative lending platform is increasingly attracting attention, due to its potential to provide a marketplace for individual investors to directly discover investment opportunities, he said.
Speaking about the country's Fintech journey, he recalled that the last National Budget contained several key measures, such as the establishment of Fintech innovation hubs and digital labs, on which the FSC is also currently working together with the Bank of Mauritius.
He indicated that the FSC has also signed Fintech Memoranda of Understanding with a number of well-developed countries like France and Canada to further promote our collaborative agenda and actions with respect to Fintech and innovation. Further, we are considering to tap into SupTech/RegTech opportunities with a view to developing and consolidating our image as a leading, innovative and data-centred regulator within the region, he said.
As per the International Organisation of Securities Commissions, crowdfunding is an umbrella term describing the use of small amounts of money, obtained from a large number of individuals or organisations, to fund a project, a business or personal loan, and other needs through an online web-based platform.