A Kuwaiti investment house has launched a Shariah compliant digital investment platform, growing the State’s relatively nascent Islamic fintech market.
Known as Zad App, the platform offers retail investors access to over 4,000 US stocks and ETFs at an entry point of US$100. The development of the app was driven by the founders of Securities House – Abdulrahman Al Kharafi, Abdullah Al Otaibi and Abdullah Al Ansari. All investments are certified Shariah compliant by its internal Shariah advisory board.
“Zad aims to change the understanding and mechanisms of financial investment in the Kuwaiti and foreign markets, and to spread an investment culture,” said Abdulrahman, who is the CEO of Zad App and the head of fintech at Securities House. Securities House is an Islamic investment company regulated by the Capital Markets Authority and the Central Bank of Kuwait (CBK).
Securities House has partnered with Alpaca Broker API to build Zad App’s backend infrastructure.
“The inspiration for Zad came from the idea that starting a trading portfolio should be a hassle-free process that any potential investor, regardless of their background, can do with as little guidance as possible,” shared Abdulrahman.
It is understood that the firm is also planning to introduce a robo-advisory platform.
Compared with its neighbors such as the UAE, Bahrain and Saudi, Kuwait has been slower at embracing and driving digital and fintech innovation, although there are signs things are picking up. CBK introduced its fintech sandbox and e-payment regulations in 2018 and more recently in 2022, it released guidelines for digital banks.
So far, there are only two fintech start-ups offering Shariah compliant services (excluding Zad App) as verified by the IFN Islamic Fintech Landscape, as at the 10th March 2023. In comparison, Saudi Arabia has at least 36 and the UAE has 33.
Kuwait is, however, expecting to welcome its first Islamic digital bank: Ahli United Bank in Kuwait, which was recently acquired by Islamic banking giant Kuwait Finance House, has been mandated to convert into a digital bank by the CBK. Although, Shariah compliant Boubyan Bank in January confirmed that it has withdrawn its application for a digital bank license.
It is also worth noting that Boubyan Bank indirectly owns UK Halal digital bank Nomo through its UK subsidiary, Bank of London and The Middle East.