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Editor's PickSC and UNCDF unveil Islamic fintech accelerator to bolster Malaysian Shariah capital...

SC and UNCDF unveil Islamic fintech accelerator to bolster Malaysian Shariah capital markets

The Securities Commission Malaysia (SC) and the UN Capital Development Fund (UNCDF) have launched an Islamic fintech accelerator program in their search for innovative fintech ideas and solutions to bolster the Malaysian Islamic capital market.

The FIKRA Islamic Fintech Accelerator Program (FIKRA), officially launched today, is Malaysia’s first fintech accelerator program designed specifically for the Islamic capital market. The three-month program will provide start-ups with regulatory guidance, mentorship, pilot testing of solutions as well as connect start-ups with potential investors and partners.

“For its inaugural program, FIKRA hopes to attract applicants who will bring with them innovative ideas or solutions for the Malaysian Islamic capital market. The size of the first cohort would depend on the number of applications received and applicants meeting the program’s eligibility criteria,” the SC told IFN. “The plan is for FIKRA to be broad-based, ie no specific focus on particular verticals as long as the ideas or solutions are innovative, benefit the Malaysian Islamic capital market and address the program’s three key challenge areas outlined.”

The three areas are: to nurture tech-based ideas, products and services uniquely developed for the Islamic capital market; to seek and develop tech solutions to strengthen the role of the Shariah capital market in funding sustainable development needs, advancing financial inclusion and accelerating the growth of sustainable and responsible investing (SRI); and explore and build avenues to integrate traditional social finance instruments rooted in Islamic values and intended for social benefit, such as Waqf, Zakat and Qard Hassan.

“Whilst our various regulatory frameworks cater to both conventional as well as Shariah compliant market segments, we have identified Islamic fintech as one of the growth areas of priority, leveraging Malaysia’s leadership in [the] Islamic capital market. The program will focus on expanding Islamic capital market offerings and enabling greater connectivity, accessibility and inclusivity for issuers, investors and intermediaries in the areas that include [the] Halal, SRI and Islamic social finance sectors,” elaborated the SC.

Start-ups, which have until the 30th June 2021 to apply to the FIKRA program, will be evaluated by their degree of innovation, sustainability and commercial viability as well as alignment with social impact and sustainable development goals.

Malaysia boasts one of the most advanced and sophisticated Islamic capital markets globally: in 2020, it commanded more than 45% of the world’s outstanding Sukuk at about US$258 billion. It also houses one of the largest concentrations of Islamic fintech start-ups at 24 as identified by the IFN Islamic Fintech Landscape as at the 24th May 2021. The UK leads at 38 followed by Indonesia at 33.


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