Dubai has followed in the steps of Kuala Lumpur to formally regulate Shariah compliant crowdfunding activities and has recently extended its stamp of approval to a platform with Islamic capabilities.
Beehive P2P, which facilitates Shariah compliant financing solutions for SMEs, has become the first peer-to-peer (P2P) lending platform (both Islamic and conventional) to set up offices in the Dubai International Financial Center. The company is now regulated by the Dubai Financial Services Authority (DFSA).
In most markets, there are no official requirements for fintech firms which position themselves as either Shariah-based or Shariah compliant to be certified as such thus creating ambiguity over the authenticity and compliance of their business; the DFSA has eliminated that by requiring P2P firms to comply with relevant DFSA Islamic Finance Rules applied to Islamic banks, and secure a Fatwa on their license.
Beehive has therefore engaged Bahrain’s Shariyah Review Bureau (SRB) to undertake the Shariah supervisory board, certification and Shariah audit functions for its Islamic operations.
“Islamic financing is a core component of our business and is ideal for small and medium sized businesses that want to secure fast and affordable finance in compliance with their faith. We are confident that the new regulation by the DFSA and partnership with SRB, will enhance our Shariah processes and maximize our Shariah compliance visibility,” commented Craig Moore, the founder and CEO of Beehive.
The firm has big plans for its Islamic offering. “We’re excited about opportunities to work with larger Shariah compliant businesses and even government agencies. There are big opportunities for investors in the region to become more productive and more efficient in their investment,” shared CFO Peter Tavener, who added that the true value would emanate from large-scale financing opportunities such as those of Dubai-based solar company Enerwhere and coffee venture Coffee Planet, both AED1 million (US$272,201) investments, which would enable both investors and businesses to unlock the advantages offered by SME financing.