Thursday, December 1, 2022
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Editor's PickManzil unveils Halal robo-advisory platform to meet underserved Canadian Muslim market

Manzil unveils Halal robo-advisory platform to meet underserved Canadian Muslim market

Islamic digital financier Manzil has launched a Halal investment platform providing Canadians exposure to Shariah compliant actively managed portfolios.

The platform, known as Manzil Invest, is offered in partnership with OneVest, a Canadian investment fund manager, which is providing the white label robo product.

“Currently, access to professionally managed Halal portfolio options through a bank, brokerage or specialty portfolio management shops comes with a significant investment minimum, anywhere from CA$100,000 –500,000 (US$73,670.9 – 368,355). This is a substantial barrier as many Muslims are first-time investors since they have avoided participating in the financial markets and don’t want to fall into the trap of unknowingly investing in impermissible assets,” the Toronto-based fintech start-up said.

The minimum investment amount through Manzil Invest is CA$1 (73.67 US cents) and it allows users access to automated investing services, customized portfolios and access to alternative investments such as precious metals, Islamic real estate and mortgages.

Despite Muslims being the second-largest and fastest-growing religious group in Canada, Shariah-conscious Canadian Muslims are largely excluded from the financial system due to the pervasiveness of interest-based products (which are prohibited in Islam) and the scarcity of financial products which respect Muslim sensitivities. Islamic financial activities in the North American market are largely in the form of Halal mortgages offered by a handful of financial institutions. Conventional unicorn robo-advisor Wealthsimple in 2017 began offering a Halal portfolio and followed up with an Islamic ETF last year.

The fragmented and slow growth of Islamic finance in Canada is largely attributed to the absence of enabling regulations. As such, it is no surprise that Manzil has partnered with OneVest to launch the robo-advisory service. The latter is a portfolio manager licensed to service the whole of Canada as well as an investment fund manager in five of the 10 Canadian provinces, establishing a pathway for the Islamic fintech start-up to offer investment portfolios in a regulated manner.

The investment platform is part and parcel of Manzil’s plan to become a full-service provider of Muslim-friendly financial services. Seeking to bridge the gap in supply and demand, Mohammed Sawaf founded Manzil in 2017 to provide Halal mortgages. It has gradually expanded its offerings over the years: earlier in June, it acquired Muslim Will Solutions, marking its entry into Shariah compliant estate planning; in 2020 it introduced the country’s first Halal mortgage fund.

The expansion follows its successful seed round of CA$2.44 million (US$1.95 million) earlier this year.

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