BBS Invest, a Senegalese payment and digital solutions company, is currently working on what it says is the first SMART Tawarruq platform developed in West Africa.
The platform, which digitizes Murabahah via Tawarruq transactions, will be officially completed by the end of 2022, BBS Invest told IFN. It is expected to help local banks have insight on their transactions and data, and assess whether they are Shariah compliant end-to-end.
Digitizing the transactions will allow all the stakeholders — the clients, the suppliers, the Shariah boards — to have access to any transaction at any time during its lifecycle, the company noted.
“The market in Senegal is dominated by traditional banks (non-Islamic finance) and therefore people are used to receiving cash, as opposed to receiving goods for instance. The Tawarruq model happens to be a secure solution to fit their behavior, and also allows banks to have a financial guarantee that is compliant with Shariah law,” Aissatou Agne, the chief marketing officer of BBS Group, explained.
Aissatou said that the proof of concept or prototype for the Tawarruq platform is now complete and ready to be customized and launched by any institution that needs it.
“Simulations allow for the application of credit end-to-end until the funds are made available to the client. Client and bank views (on the platform) are fully developed; we now need to develop the suppliers’ marketplace. This feature will be completed by the end of 2022,” Aissatou added.
The Tawarruq platform answers a crucial unmet need for local banks to assess the compliance of transactions with foreign solutions. But it is not without its challenges.
“Our biggest challenge is to sell the platform to local banks by implementing a strong business development plan. The stress is currently on being certified both on information security and Shariah compliance,” the company said.
BBS Invest, which is working with the Islamic Microfinance Development Program in Senegal or PROMISE to develop Islamic finance, is currently working to get Shariah-certified and has plans to develop and launch more Islamic financial products in Senegal and the wider African region, Aissatou confirmed.