A Saudi Central Bank (SAMA)-licensed fintech platform has officially received its Shariah compliant label, thereby providing additional reassurance to faith-conscious consumers and an added advantage to the Islamic fintech start-up’s expansion strategy in the Muslim-majority region.
As one of the first fintech companies to receive SAMA’s experimental fintech permit in 2019, Forus always had Shariah compliance at the heart of its operations. Engaging Bahrain-based Shariyah Review Bureau to monitor and approve its debt crowdfunding business model is a reaffirmation of its Muslim-inclusive strategy.
The peer-to-peer (P2P) SME lending marketplace, the brainchild of CEO Nosaibah Alrajhi who co-founded Forus with Abdulwahab Majeed who serves as its chief technology officer, is capitalizing on the SME financing gap in Saudi Arabia.
“Access to finance is one of the biggest obstacles facing the development of SMEs. Platforms like Forus are able to conveniently provide financing, bridging the corporates’ working capital needs and the investors who are looking for diversification,” Nosaibah explained. “The platform mechanics are fairly straightforward, bringing investors and SMEs together. We do all the due diligence, and once companies meet our benchmarks, they are listed on the platform, giving investors — individual and institutional — the opportunity to lend them money.”
Digital SME financing is a fast-growing vertical in Saudi. By virtue of its Islamic constitution and regulatory direction, all fintech start-ups are expected to adopt Shariah compliant structures. Saudi hosts one of the largest concentrations of Islamic fintech start-ups in the world: according to the IFN Islamic Fintech Landscape, it is fifth with 22 start-ups as at the 16th June 2021.
Forus adopts a Murabahah structure for its financing business. It is understood that the start-up has future plans to expand into Pakistan and Egypt although the Saudi market remains a priority.