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France Announces Measures to Boost Crowdfunding
Source: telecompaper.com
Source Date: Sunday, February 16, 2014
Focus: Electronic and Mobile Government
Country: France
Created: Feb 18, 2014

After a year of consultation, French digital economy minister Fleur Pellerin announced a series of measures aimed at relaxing regulatory restrictions on crowdfunding, saying the government wanted France to become a pioneer in this sector that reflects the values of the "start-up republic". The country’s cowdfunding sector grew to EUR 78 million in 2013 from EUR 27 million in 2012, including loans, grants and investments, according to the Association Financement Participatif France. The new rules are intended to accelerate the sector’s growth and to offer start-ups an alternative to traditional banks.

There will be no change for donation platforms such as Ulule and Kisskissbankbank, but for the first time people will be able to collect interest on loans to other individuals and businesses, Le Monde reports. The maximum individual loan will be EUR 1,000 per project, and the platforms will have to inform participants of the risks involved. The fundraising procedure will be lightened, allowing businesses to raise up to EUR 1 million online without having to produce a long detailed document for financial markets regulator AMF. ‘A document a few pages long presenting a business’s activities and prospects will be sufficient. This is much better adapted to the reality of start-ups’, Smartangels.fr president Benoit Bazzocchi told Le Monde.

Unlike with interest-bearing loans, there will be no individual limit for equity investments. Crowdfunding platforms will have to obtain the status of crowdfunding advisor, to inform participants about the costs of capital increases and to warn them regularly of the risks involved to obtain a kitemark intended to build trust for individual investors and to help the sector really take off.

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