The Financial Services Authority (OJK) of Indonesia has given the green light to the country’s first licensed Shariah compliant peer-to-peer (P2P) financing service.
Almost a year in the making, P2P lender Investree Radhika Jay has been granted regulatory approval to launch a Shariah compliant P2P financing business ahead of the release of a related Fatwa by the National Shariah Board, expected this quarter.
The Fatwa is being developed in consultation with P2P and crowdfunding players which are interested in tapping the Islamic market including Investree, EthisCrowd, Amartha, Danakoo and Ammana. Once the Shariah proclamation has been made, it will be incorporated into Indonesia’s existing regulatory framework on P2P lending.
Since introducing its Islamic P2P model in November 2017 on a trial basis, Investree has managed to disburse IDR2.7 billion (US$197,419) in financing to 313 borrowers, from 1,340 individual investors as of January. The lender targets to grow its Shariah financing portfolio to IDR200 billion (US$14.62 million).
It is also in the midst of closing a Series B funding before the second quarter, which will be used to support its expansion plans including introducing Shariah compliant instruments for e-commerce business owners.
Investree’s foray into the Shariah space, under the leadership of CEO Adrian A Gunadi, an Islamic banking veteran, could set the precedent for others to capture a slice of the world’s most populous Muslim market.