Two Islamic finance-focused fintech platforms have partnered to establish a new Shariah crowdfunding platform for social finance with pilot campaigns slated for November.
Luxembourg-based Conexcap, a newly-minted fintech initiative headed by CEO Anass Patel, who is also the founder of Paris-based 570 Asset Management, has entered into a joint venture with Singapore-based Ethis. Incorporated in Malaysia, Ethis Ventures will initially focus on a charity-based crowdfunding platform known as GlobalSadaqah to serve Islamic social finance institutions as well as developmental and humanitarian institutions. Conexcap will provide start-up capital and strategic support for the venture.
“Malaysia is the perfect base for us due to the availability of Muslim talent who came here from all parts of the globe. Strong government support for tech start-ups enable us to have a team of passionate young Islamic finance talents,” Umar Munshi, the founder of Ethis, explained.
Announced at IFN Europe Forum in London this month, Ethis Ventures is but one of the few initiatives Conexcap is working on. Among others is So Easy (Save to Own), which is also based on crowdfunding principles and leverages an existing French mortgage platform which has been running for the past five years. The platform assists families to secure Islamic home finance.
“What we discovered was that while the lending side is important, the savings side is also important,” shared Anass. “One of the first pillars that we are therefore launching is crowdsavings – allowing people to put aside daily small savings that we can then allocate to the mortgage balance sheet of the bank.” This is essentially different from a peer-to-peer allocation.
“A residential mortgage for a bank is a long-term investment of 20-25 years and it is hard to get retail savers to commit to that length of time. So what we are doing is collecting savings from the retail market, putting these at the disposal of the bank and the bank will do the allocation (in a very transparent way) into the real estate assets,” said Anass.
Conexcap has also partnered with the University of Luxembourg to conduct research on smart contracts for Islamic finance.