GLOBAL: A strategic partnership between the Bahrain Institute of Banking and Finance (BIBF) and structured securities solutions provider Bedford Row Capital (BRC) will see the launch of a digital Mudarabah platform, said to be an industry’s first, moving the wider Islamic finance industry one step closer to its digital transformation.
The Digital Mudarabah Platform will be tracking ethical projects in the UK, Germany, Canada and Australia and open them to institutional and retail investors in Bahrain and the Gulf region, who will act as capital owners.
“Given the overstructured nature of certain modern Islamic financial products and the practice of replicating conventional financial products, innovative efforts need to be made to bring Islamic banking in line with the vision of the founding fathers,” Mujtaba Khalid, the head of the BIBF‘s Islamic Finance Centre, said.
Under the partnership, the BIBF will lend its expertise in strategy, oversight and brand development, while BRC will focus on the technology and business aspects of the platform, drawing on its experience in linking ethical and sustainable projects with investors.
“Our collective aim is to make Islamic finance more accessible to ever wider sections of the population,” noted Dr Scott Levy, CEO of BRC. Dr Ahmed Al Shaikh, the director of the BIBF, added: “This platform will aim to set the standard and facilitate inclusive progress of the Islamic finance industry.”
Bahrain’s drive toward a digital financial system has seen much progress in the past year: in June 2020, the central bank launched a Murabahah service underpinned by Sukuk Ijarah for banks and corporates, with the transactions facilitated by an online Islamic financing and trading platform provided by Bahrain Bourse.
Later that same year, the central bank partnered with other entities including local Islamic banks to launch FinHub973, a platform that connects financial institutions in Bahrain to fintech start-ups around the world, and which also offers an open API sandbox, a global fintech marketplace and an innovation crowdsourcing feature.