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Editor's PickUzbek Islamic fintech start-up prepares to expand into South Asia as it...

Uzbek Islamic fintech start-up prepares to expand into South Asia as it eyes Islamic banking license

Currently in its final sprint of closing its post-seed round, Uzbekistan-based IMAN confirms that it will be applying for new licenses, including an Islamic banking one, beginning January and is on track to expand into new markets including Pakistan.

New licenses

The start-up, which runs a digital Halal investment app, IMAN Invest, and IMAN Pay, an Islamic Buy Now Pay Later (BNPL) platform, is looking to apply for a microfinance license from the Uzbek central bank next January. The license will enable IMAN Pay to cater to individual entrepreneurs and non-value-added taxpayers, explained Mark Zubov, IMAN’s founder and CFO.

As at the end of October 2022, IMAN Pay has disbursed over US$6.4 million in installments and has 26,000 monthly active users. It is working on improving its credit scoring algorithm by adding 8,000 alternative data points to its model.

The start-up also intends to secure approval to offer Islamic banking services under the country’s sandbox program by March 2023.

“Had a very positive meeting with the Central Bank of Uzbekistan and got initial green light for an Islamic banking sandbox license. Our goal is to have a fully-fledged banking license by 2024!” Zubov wrote in an update.

New markets

These developments come as IMAN gains solid momentum for its international expansion strategy.

It has formed a joint venture in Kazakhstan in partnership with its strategic investor, AlSaqr Finance, which is licensed to offer Islamic financial services in Kazakhstan. IMAN expects to launch its Kazakh business before the end of the first quarter of 2023.

Zubov also revealed to IFN Fintech that the company is in due diligence with several banks in Pakistan to introduce co-branded Halal BNPL and investment products.

“The Uzbek market is very similar to Pakistan in terms of digital and e-commerce penetration, and we are seeing a lot of demand for Islamic finance in Pakistan,” Zubov told IFN Fintech, adding that the start-up is also keen on the Bangladeshi market. The Federal Shariat Court of Pakistan in April directed the banking system to eliminate Riba by 2027, transforming the Islamic Republic’s financial and banking system to comply fully with Islamic principles.

IMAN’s aggressive growth is fueled by a US$1 million seed financing closed in February. It currently has secured US$1.2 million in commitments for its US$1.5 million post-seed round, led by AlSaqr and a US-based venture capital fund.

“These funds will enable us to reach breakeven in Uzbekistan by summer next year,” Zubov noted. The firm plans to begin its pre-Series A funding round to support its South Asian expansion in the second quarter of 2023.

Blockchain project

IMAN is also jumping into the crypto world with Umma Finance, its Islamic decentralized finance (DeFi) protocol connecting crypto investors with real-world sources of yield in emerging markets. Earlier in July, the company confirmed that it had received grant commitments from Algorand and NEAR protocols to fund the initial development of the DeFi protocol.

It intends to launch the minimum viable product (MVP) on the testnet by January, with the goal of attracting at least 10,000 users by the time the MVP is ready.


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