Muslims come into the frame in Southeast Asias fintech boom
- While Islamic fintech’s market size is still small, it is expected to reach $179 billion at a 17.9% CAGR by 2026, outpacing traditional fintech’s 13.5% CAGR growth over the same period.DinarStandard and Ellipses also found that there are 375 Islamic fintech companies around the world.
- Thevarajah said part of fundraising means assessing potential investors to ensure both they and their fund management is done in alignment with shariah principles.“Investor interest in the Islamic fintech sector for PayHalal was very high due to its potential in a fast-growing Muslim population worldwide,” Thevarajah said.
- These are the Financial Services Authority (OJK), which regulates and supervises the financial services sector, Bank Indonesia, which oversees banks, and the Majelis Ulama Indonesia (National Sharia Board-MUI), or the country’s leading Islamic scholars body.The MUI has published at least two fatwas on fintech.
- Headquartered in Delaware, Blossom Finance hosts investors from primarily the United States and Europe, but all of the microbusinesses it serves are in Indonesia.After initially soft-launching in the U.S., the Blossom Finance team realized that the market there for Islamic finance was very small, said Martin.
- For example, Indonesia’s National Islamic Finance Committee is focused on developing Islamic finance and the country’s Islamic economy.And in Malaysia, Bank Negara’s Investments Accounts Platform is the first Islamic P2P initiative established by a central bank, while the government-owned Malaysia Digital Economy Corporation connects investors with halal business owners.
- They started looking for a bigger market, and landed on Indonesia because of the financial inclusion challenges facing micro and small businesses.Other reasons Blossom Finance chose Indonesia over other countries with large Muslim populations included its relative political stability, Martin said.
Founded in 2014, Blossom Finance was first intended for Muslim entrepreneurs in the United States. The microfinancing platform connects investors with small businesses using mudarabah, a shariahcomp [+25226 chars]