MercyCrowd, a UK-based real estate equity crowdfunding platform, is weighing between Malaysia and Singapore as its gateway into the Asian Shariah compliant and ethical investment space, as part of its international expansion strategy.
Going global
With a footprint in the UK and the UAE, the fintech start-up is looking at setting up shop in Asia over the next 12 months, CEO and founder Anouar Adham tells IFN Fintech.
“From the very beginning, we have always wanted MercyCrowd to be a truly international platform, and with offices in London and Dubai, we are the only Shariah compliant platform around that is as international as it can get,” Anouar believes. “And we expect to be present in Asia over the next year – the question is whether it is Malaysia or Singapore.”
Incorporated about a year ago, the young start-up only went live in May this year – spending the first few months building its IT capabilities, forming its team and identifying and sourcing for quality assets.
“We wanted to do something unique and not be a mere copycat so we spent a lot of time trying to integrate unique features into our platform – being international is the underlying theme,” said Anouar.
This element of being global is reflected across its business: apart from physical office presence, MercyCrowd’s assets are also multinational in flavor – it currently has assets from the UK and France on its platform. And the platform allows for transactions to be executed in more than one currency: the UK pound and the euro, with a view of including US dollars in the next few weeks.
Rigorous regulation
As expected, the international business model faces significant regulatory hurdles: for every new market it forays into, MercyCrowd would need to be separately regulated by that specific jurisdiction.
“This is one of the reason why we began in the UK and made it a priority to secure a license from the Financial Conduct Authority,” Anouar explains. “By being regulated by the most stringent regulator around, it should ease our entry into other countries.”
Shariah spirit
Positioning itself as an ethical platform, it was important to Anouar, who has been an Islamic finance professional throughout his career, for MercyCrowd to be aligned with Shariah principles. All investments via the platform are conducted in an interest-free environment through a low-risk approach. And equally significant (if not more), the platform facilitates socially responsible projects.
“A percentage of our profits goes to charity,” Anouar shares. “We partner with local associations where our assets are based, and investors also have an option to donate a portion of their returns to assisting these charities – which are dedicated toward addressing the issue of homelessness in their community, in line with the residential property nature of our business.”
To better facilitate donations on its platform, the crowdfunder designed a separate solution, Mercy Donations, which focuses exclusively on promoting local and sustainable projects.
Another Shariah aspect vital to the platform is the democratization of investments.
“The minimum ticket to invest via MercyCrowd is GBP50 (US$64.33). To create an international real estate portfolio for just GBP50 is something no other Shariah compliant platforms are able to do yet,” says Anouar, whose Islamic finance credentials include stints in Shariah banking and asset management in the Middle East, Asia and Europe.
And while the firm has yet to secure an official Shariah stamp for its platform, to Anouar there is “no question” about the Shariah compliance of MercyCrowd, which offers debt-free (hence no Riba) low-risk investments in an asset class much favored by Islamic investors, promotes financial inclusion and social equity as well as fosters the common good.
“What’s important to us is that we create social impact in every community we are in as we continue to grow as a business,” says Anouar.