EGYPT: Banque Misr has rolled out a digital Shariah compliant financing service to support small businesses, said to be the first of its kind in Egypt, a promising step forward for the country’s fledgling Islamic fintech sector.
Structured using the Murabahah concept, Banque Misr’s new digital product is approved by the Sharia Supervisory Authority, and is part of the lender’s digital strategy. The country’s second-largest commercial bank has been working on establishing a stand-alone digital banking arm it reportedly hopes to launch in the third quarter of 2021. Last year, the lender set up Misr Digital Innovation to launch Egypt’s first digital native. In February 2021, the lender engaged tech company Atos to support its digital transformation.
The new service allows fund seekers to submit a request for funding between EGP100,000 (US$6,355.93) and EGP2 million (US$127,119) to support their projects through the bank’s website. Removing the need to go to a physical branch, the digital financing is expected to be disbursed within five days.
This new product is one of several digital initiatives the lender has implemented including mobile payment, a chat banking service and the use of artificial intelligence.
Home to three fully-fledged Islamic banks and 14 lenders servicing the Muslim market on a window basis, Egypt’s Islamic fintech sector is relatively small compared with its Middle Eastern and Southeast Asian counterparts. According to IFN Islamic Fintech Landscape, there are three Islamic fintech start-ups operating in Egypt as at the 5th August 2020. Banque Misr’s decision to take the Islamic route in designing its latest digital product could be a boon for Egypt’s digital Shariah finance space.