While securing a buy-now-pay-later (BNPL) license is taking longer than expected, Uzbekistan’s IMAN is nonetheless making good progress on expanding its Islamic fintech business: it is preparing to launch in Kazakhstan and has secured a place in a Silicon Valley accelerator program.
The start-up, which offers Halal investment and payment services through its IMAN Invest and IMAN Pay brands respectively, confirmed that its joint venture, set up with a banking partner, is preparing to launch operations in Kazakhstan, to mark the start of its international expansion plan. Iman is also testing its B2B2C bank partnership model in several other markets including Saudi Arabia, Turkiye and Pakistan.
Locally in Uzbekistan, the firm has signed its first B2B partnership with telecommunications provider Beeline, a subsidiary of Netherlands-domiciled global digital operator Veon.
“[IMAN] Invest’s product will be integrated with [the] Beepul fintech application, enabling the 10 million Beepul users to seamlessly invest in IMAN. If the Uzbekistan pilot is successful, we’ll be integrating with Veon super-apps in other markets across the globe,” Mark Zubov, the founder and CFO of IMAN, informed IFN Fintech.
Beepul is Beeline’s digital payment platform.
These developments are in the backdrop of IMAN being accepted into the 500 Global Flagship Accelerator Program based in San Francisco. 500 Global is venture capital firm managing over US$2.7 billion in assets. With the demo day slated for the 23rd March 2023, the start-up is seeking up to US$400, 000 in investment before that.
The start-up is currently working on releasing an upgraded version of IMAN Invest, with an updated backend and depositor incentivization system, an internal token program to enhance retention. Downloaded 310,000 times, the IMAN Invest app saw the number of monthly active users grow by 46% in January to reach 104,000.
Zubov revealed that plans to secure a BNPL license in Uzbekistan has been delayed, leading to “rather stagnant sales” as it is prevented from working with retailers. He nonetheless reassured that IMAN is on track to obtaining a license next month.
IMAN is also working on securing a microfinance license for IMAN Pay which will allow the start-up to work with a wider range of clientele including individual entrepreneurs and non-value-added taxpayers. It is also working on improving its credit scoring algorithm for IMAN Pay, by adding 8,000 alternative data points to its model. The IMAN Pay app has been downloaded 111,000 times and has 30,000 monthly active users in January. It has disbursed a total of US$6.9 million in installments.
At the end of last year, IFN Fintech reported that the start-up received an initial green light for an Islamic banking sandbox license with the Uzbek regulator.
Boosting internal controls
Following a merchant fraud incident, the company is prioritizing hiring a chief risk officer. Several candidates are being interviewed, with a decision to be made “very soon”.
“We had to part our ways with two of our employees after their involvement in a merchant fraud incident. That was quite a disheartening experience, yet an extremely valuable lesson for us,” said Zubov. “Fortunately, the damage to the business was manageable and will be fully recovered through legal actions over the next six months.