A Saudi peer-to-peer (P2P) funding platform is seeking to secure a Fatwa to anchor itself within the religious-conscious Muslim community of the Kingdom in order to capture the burgeoning SME market.
Raqamyah has engaged Bahrain-based Shariyah Review Bureau to advise, review and ensure its crowdfunding platform is aligned with Shariah principles.
“For us, Shariah compliance is instrumental in achieving success. This proposition can help enhance Islamic values by challenging the way a financial transaction is formulated, and [provide] Shariah assurance to our stakeholders,” shared Ammar Bakheet, the founding partner and CEO of Raqamyah.
A seasoned Middle Eastern banker, Ammar believes onboarding a Shariah advisor would significantly enhance its position among other fintech firms in the Kingdom.
“It is high-time for the Kingdom’s financial sector to explore opportunities offered by fintech firms to serve the SME segment,” Ammar added. “We are proactively looking to augment our capabilities in developing faster ways of connecting funders with SMEs and also enact the spectrum of Saudi Arabia Monetary Authority (SAMA)’s regulations in the Kingdom.”
SAMA has been proactive in engineering a conducive operating landscape for fintech start-ups in the Kingdom, particularly through its regulatory sandbox, which currently houses 21 fintech companies. Earlier in August, the regulator revealed that two experiments conducted in its sandbox have yielded positive results: opening individual banking accounts and updating Know-Your-Customer’s data in a completely digital environment.
A total of 12 banks participated in testing out these solutions; and after 666,000 successful experimental transactions by these banks, these institutions are now officially allowed by the regulator to offer these services to their customers.
It is really a challenge to be Shariah compliant in a P2P platform. A fee charged instead of interest will have to cover expenses and the dividends for the investors