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Rabat – Good news for small investors and businesses in need of funding: Morocco has finally drafted a bill to regulate collaborative financing, colloquially known as crowdfunding, in an unprecedented move in the African region.
Crowdfunding has emerged as an alternative form of financing projects, startups, and small and medium enterprises (SMEs), especially in their early-stages. It is generally carried out via online platforms that connect those who can give, lend, or invest money directly with those who need financing for a specific project, rather than seeking means of traditional bank financing.
The long-awaited legal framework to regulate this financing method, was submitted by the Ministry of Economy and Finance on March 21, and published soon after on the official website of the Government’s General Secretariat.
The draft bill, which was signed by Minister of Economy and Finance Mohamed Boussaid, sets the necessary regulations to give investors and small businesses in need of funding, particularly start-ups and SMEs, access to this innovative form of finance, for the first time in Morocco.
According to a statement, the draft law, dubbed 15-16, aims at “strengthening the financial inclusion of project leaders, supporting economic and social development, and canalizing collective savings toward new opportunities.”
The draft law broadly defines the conditions under which the relevant companies can operate, as well as the various modes of financing authorized in this context. It underlines the provisions applicable to managers of crowdfunding companies and the procedures for obtaining approvals to operate in this sector, as well as the modes of fundraising authorized for such entities.
The prospective law will also enable investors on crowdfunding platforms under a better protection regime with a higher level of guarantees, which is based on clear rules on the diligence of projects to be financed, securing transfers and protecting contributors.
The implementation of the draft law will eventually replace the law 004.71, which has long forbid appeals to public generosity in Morocco, with quid pro quo donations only permitted to registered foundations.
