The Capital Market Authority of Ethiopia has taken a groundbreaking step to foster financial innovation by launching the country’s first-ever Regulatory Sandbox. This initiative opens new doors for technology-driven businesses, providing them with a unique opportunity to test cutting-edge financial products in a controlled environment, all while receiving crucial regulatory support. As Ethiopia embarks on this ambitious journey, the move signals a significant push towards modernizing its financial landscape, potentially reshaping the market for consumers and startups alike. Applications for the inaugural cohort are now open, but the window to apply is closing fast. Here’s what you need to know:
When to Apply
The application window for the first cohort of the Regulatory Sandbox is now open and will close on September 30, 2024. You have 30 days to submit your application.
Prerequisites for Application
To be eligible for the Regulatory Sandbox in Ethiopia, your business needs to meet the following criteria:
- Focus on Ethiopian Consumers: Your product or service should be designed primarily to benefit consumers in Ethiopia.
- Genuine Innovation: Your solution must be innovative or significantly different from what’s currently available in Ethiopia. This could be through new technology, unique delivery methods, or fresh business models.
- Consumer Benefit: Your innovation should provide clear advantages to Ethiopian consumers, particularly supporting Small and Medium Enterprises (SMEs) and startups.
- Ready for Testing: Your product or service must be fully operational and ready to be tested with real customers in a live environment. You should also have all necessary partnerships and consumer protection measures in place.
- Need for Regulatory Support: You must explain how the Regulatory Sandbox will help you during the testing process. This could involve seeking regulatory clarification, addressing regulatory uncertainties, or testing in a controlled environment.
The Sandbox Process
- Testing Plan Agreement: Once accepted, you’ll work with ECMA to create a clear plan for testing your solution.
- Regulatory Tools: You may receive specific regulatory tools or exemptions necessary for testing your product within the sandbox.
- Testing Phase: You’ll conduct your testing with real customers under controlled conditions, with ongoing oversight.
- Exit Strategy: After testing, you’ll need to develop a plan to bring your solution to the broader market if the testing is successful.
How to Apply
To apply, you need to complete the application form available on the ECMA website. The form requires detailed information about your company, the innovation, and how you intend to test it. You’ll also need to provide supporting documentation, including technical descriptions, business plans, and risk management strategies.
Evaluation and Exit
At the end of your testing phase, you’ll submit a final report to ECMA outlining your results and proposed next steps. The sandbox committee will review your report and help you determine the best exit strategy for bringing your product to market.
Review Process
Your application will go through an initial screening for completeness and alignment with the sandbox’s objectives. A detailed review by ECMA will assess your innovation’s potential, readiness for testing, and regulatory alignment.
Decision and Feedback
If your application is successful, ECMA will provide feedback and guide you through the next steps, including preparing your testing plan. If your application is not accepted, you’ll receive feedback to help you refine your proposal for future opportunities.
Support and Benefits
Participants in the Regulatory Sandbox in Ethiopia will receive tailored regulatory support, strategic guidance, and other benefits to help develop and test their innovative financial products. This includes:
- Testing Approval Letters (TALs): Formal approval to conduct your test under specified conditions.
- Tailored Advice: Guidance on regulatory compliance and risk management.
- Ongoing Interaction: Regular, informal communication with regulators to help you adjust your strategy as needed.
- Flexible Regulatory Support: Flexibility to test innovations that may not fit within existing regulatory frameworks, while ensuring compliance and consumer protection.
For more information or to apply, visit ECMA’s website or contact them directly at hello@stockmarket.et or +251–116–39–5500.