A digital Tawarruq platform for Islamic banks in Turkey may become a reality under a new Malaysian–Turkish fintech partnership.
The project is being spearheaded by Malaysian Islamic fintech company Sedania As Salam Capital (SASC) and Turkey-based fintech firm Innova Yonetim Sanismanlik Ve Bilisim Teknolojileri. The two companies formalized their partnership through an MoU, which marks the foray of SASC into the international market.
The Malaysian firm is a commodity Murabahah digital solutions provider, serving over 70 financial institutions with more than RM60 billion (US$14.33 billion) in financing processed to date, projecting growth in the demand for digital solutions in Islamic financial services.
SASC recently also diversified into providing other Halal financing services: earlier in February, the company launched its GoHalal Financing Program which equips licensed moneylenders to ensure full Shariah compliance of the financial products.
The new Tawarruq platform for Innova is expected to trade some US$50 billion-worth of commodities next year, targeting the Turkish participation banking sector. The planned financing processing platform will begin trading traditional commodities, followed by digital commodities.
The collaboration is formed amid optimistic projections for Shariah banking in Muslim-majority Turkey. Participation banking is expected to at least double its market share by assets over the next five years, thanks to supportive regulations and an expanding distribution network, according to Moody’s Investors Service. As at the end of 2020, Islamic banking penetration in the Republic reached 7.1% from 5.8% a year earlier.