The Capital Markets Authority has given a nod to Pezesha Africa Limited to operate its debt-based crowdfunding platform in the Kenyan capital markets. This follows a successful one-year testing in CMA’s regulatory sandbox between July 2019 and July 2020.
The crowdfunding platform will enable firms and entrepreneurs to raise and collect funds from investors, contributors, and donors.
CMA reiterates that the ‘No Objection’ is subject to Pezesha maintaining the existing compliance requirements and the finalization of a comprehensive regulatory framework to operate a debt-based crowdfunding platform.
Pezesha will be required to maintain an appropriate risk management framework, adequate local capital market transaction control procedures, and efficient, orderly, and fair operations of the business segment, product, or intermediaries.
Crowdfunding platforms provide an alternative capital raising initiative for firms through equity, debt, or a hybrid model.
CMA launched the regulatory sandbox in March 2019 seeking to admit Fintech firms and innovators to test products. The sandbox was meant to accelerate CMA’s understanding of emerging technologies, support adoption of an evidence-based approach to regulation, and facilitate deepening of Kenya’s capital markets.
Furthermore, CMA was to provide regulatory guidance where the testing phase highlights that there is a need for broader legal or regulatory reform. So far, the sandbox has admitted firms such as Belrium Kenya, Pyypl Group Limited, CDSC, Pezesha Africa, Innova Limited, and an undisclosed firm.