Indonesian digital wallet OVO has strengthened its Islamic fintech proposition with its first Shariah compliant digital mutual fund.
Launched in partnership with Syailendra Capital, the Syariah Syailendra OVO Bareksa Tunai Likuid mutual fund, is available exclusively on the OVO app. Users can invest for as low as IDR10,000, or about 70 US cents. This follows OVO’s first digital mutual fund released in January. The targeted return for the new Islamic fund is reportedly between 3-6%.
The latest offering is the second Islamic product OVO has rolled out. The fintech unicorn in April introduced a digital Takaful product in partnership with Prudential Indonesia.
The decision to enter the Islamic fund investment space comes on the back of growing appetite for Shariah compliant investments among retail investors. The Indonesian government is embarking an aggressive initiative to increase the share of Islamic instruments in its financial system.
Official data show that assets under management of Islamic mutual funds in Indonesia stood at IDR77.5 trillion (US$5.35 billion) as of April 2021, which is more than twice the AUM at the end of 2018, IDR34.5 trillion (US$2.38 billion), grabbing a 13.65% market share.