Tuesday, June 18, 2024
Editor's PickWorld Islamic Fintech Awards 2020: Rainbow after the storm

World Islamic Fintech Awards 2020: Rainbow after the storm

The year 2020 has been a greatly challenging year for most. Yet despite the unprecedented pressures from the global COVID-19 pandemic, Islamic fintech start-ups from across the world are soldiering on — with a handful being left behind, and many finding opportunities amid chaos to advance their mission.

This tenacity is shown in the submissions received for the 2020 World Islamic Fintech Awards. A total of 94 submissions were received from across North America, the Middle East, Asia and Europe from start-ups in varying stages of growth.

Each submission was carefully vetted and processed by the independent Awards Board which deliberated and evaluated each submission based on a set of parameters including product innovation, impact, track record, market reach and viability, and time-to-market among others. Only categories which received more than three qualifying submissions were included in this year’s awards.

The WIFA People’s Choice Award was the only category voted by the public. Each individual was only allowed to vote once and only votes by verified email addresses were accepted.

Our heartiest congratulations to all winners of the 2020 World Islamic Fintech Awards on their most deserved win.

Best Alternative Finance Fintech Provider
This award recognizes non-mainstream digital platforms offering financing to individuals, SMEs and/or corporates.

Winner: Manzil (Canada)

Since the launch of the World Islamic Fintech Awards in 2018, the Best Alternative Finance Fintech Provider category has consistently been one of the most competitively fought categories. With nominees hailing from diverse geographies including North America, North and West Africa, Southeast Asia and South Asia as well as the Middle East, the lineup this year also featured a wide range of alternative digital financial service providers. From non-interest Shariah compliant buy-now-pay-later businesses to supply chain financiers, the Best Alternative Finance Fintech Provider of 2020 stood out from the rest due to its achievement, significance and impact.

Canada’s Manzil, crowned the Most Promising Islamic Fintech Start-up of 2019, has lived up to expectations. The Islamic mortgage provider did not slow down after taking the coveted title and tirelessly soldiered on for a total of two years to bring its product to market: a home financing solution that not only meets the religious obligations of Muslims but is also both ethically and financially attractive to Canadians at large due to its participatory nature. To date, Manzil is the only lender in Canada with open fixed rates and payment terms of up to 25 years.

In 2020, the start-up not only closed its first few mortgages and raised over CA$1 million (US$793,379), but it also introduced other Islamic financial products including a Halal prepaid card in partnership with neobank KOHO, car financing as well as an income mortgage fund. Starting out as a Halal mortgage provider, the start-up has performed above and beyond widening its product suite and laying the foundation toward its long-term goal: becoming an Islamic digital bank for Canadian Muslims. It is truly deserving of the Best Alternative Finance Fintech Provider 2020 title.

Best Islamic Crowdfunding Finance Platform

This award recognizes the most outstanding Islamic crowdfunding finance platform. It covers donation-based platforms, reward-based crowdfunding and equity crowdfunding.

Winner: Global Sadaqah (Malaysia)

COVID-19 has demonstrated the vulnerability and fragility of our global integrated economy, healthcare system and social safety net. But it has also created a perfect storm for digital Islamic social philanthropy to shine as an effective vehicle for social development and financial inclusion.

Kuala Lumpur-based Global Sadaqah exemplifies this. One of the earliest Islamic charity crowdfunding platforms around, Global Sadaqah about doubled the money raised through its platform in 2020 as compared to funds raised in the first two years of its inception: over RM720,000 (US$177,969) from the RM1.5 million (US$370,769) raised since launching its beta platform in July 2018 was crowdfunded in 2020 alone. It also managed to mobilized over RM500,000 (US$121,000) from corporate institutions or partners such as the IsDB, Bank Islam, Alliance Islamic Bank and Kuwait Finance House.

While the amount may be relatively humble, Global Sadaqah brings home 2020’s title of Best Islamic Crowdfunding Finance Platform for embodying the twin spirits of crowdsourcing and Islamic finance: collective funding for good.

Contributing to its win is the start-up’s commitment to sustainability and social development which was amplified in the challenging year of 2020: Global Sadaqah launched it Sustainable Charity Program, employing Qard Hasan, to match corporate social responsibility funds of financial institutions with verified beneficiaries in the form of loans which will be paid back in good faith without penalties nor interest.

The start-up is also expanding its range of services from retail crowdfunding to Zakat management for high-net-worth individuals, Wasiyyah and estate planning and provision of Qard Hasan microfinancing, as well as enhancing Zakat collection for state Zakat bodies among others.

Best Islamic Peer-to-Peer Finance Platform
This award recognizes the most outstanding peer-to-peer financing platform with Shariah financing principles.

Winner: ALAMI Sharia (Indonesia)

Once again, Indonesian peer-to-peer (P2P) players dominated the submissions in the Best Islamic Peer-to-Peer Finance Platform category, with some formidable rivals from the Middle East and South Asia. There were heavyweights which recorded immense growth in financing distribution; however, they were pipped to the post by relative newcomer ALAMI, which displayed great resilience, business fortitude, potential and an impressive track record to boot.

Licensed by the Financial Services Authority, the Islamic P2P platform focuses on Islamic invoice financing for SMEs and is one of the fastest-growing Islamic P2P start-ups in the Republic. Since it officially registered with the regulator in April 2019, the start-up aggressively fundraised, serving local SMEs, building partnerships and enhancing its product.

It closed its first year of operations disbursing IDR80.2 billion (US$5.55 million), and more than doubled it in 2020 reaching over IDR200 billion (US$13.85 million) by the third quarter of 2020 while maintaining a 0% non-performing financing ratio. In the span of one year, the start-up also grew its pool of registered funders to over 10,000.

Apart from encouraging credit growth, 2020 was also a year of strategic partnerships including with: Bank BNI and Bank Syariah Mandiri, the latter of which was to distribute the National Economic Recovery fund to support SMEs affected by the COVID-19 pandemic.

While young, the start-up has a clear vision of becoming a platform that embodies both Shariah principles and social impact. This is evident by it not only adopting Shariah finance but also integrating Muslim-targeted features into its app such as the ability to access the Quran, prayer times and a Qibla locator. As far as delivering meaningful social impact, ALAMI is cognizant of the businesses it supports such as its partnership with aquaculture intelligence company eFishery to fund the latter’s aquaculture farmers.

In 2020, the firm supported its expansion with a fresh round of financing including a seed round led by Golden Gate Ventures with the participation of regional investors Agaeti Ventures, RHL Ventures and Zelda Crown. The round was structured according to Shariah compliant principles, namely Akad Musharakah, one of the first venture capital funding rounds in Southeast Asia to be conducted as such. In the same year, it also implemented ISO27000:1, the international standard on information security management systems, building confidence in its platform.

For its encouraging growth numbers, attention to detail, business savviness and ability to execute its vision, ALAMI is the Best Islamic Peer-to-Peer Financing Platform of 2020.

Best Islamic Trading and Investment Platform
This award recognizes the best digital applications facilitating financial planning, budgeting and/or savings and/or investments based on Islamic principles.

Winner: INAIA (Germany)

Over the last two years, there has been an explosion in Islamic trading and investment platforms bringing the number of providers in this space to 22 as identified by the IFN Islamic Fintech Landscape. This vibrant space has captured the imagination of many and attracted new innovators, but the Best Islamic Trading and Investment Platform is not a new face, it is an established name making waves in the European market.

Founded in 2007, Germany-based INAIA continues to push the envelope when it comes to developing Shariah compliant financial products across the investment, financing and insurance spectrum for the Muslim minority. Over 13 years, the firm managed to expand its operations to also serve Muslim and ethical investors in Austria, Switzerland, France, Belgium, Luxembourg and the Netherlands.

Its INAIA Gold Dinar Savings Plan allows Muslims in Germany to invest in a Shariah compliant asset class that is certified according to ethical and sustainability standards in a completely digital environment, from contracting and investment management to physical delivery across Europe.

INAIA has also collaborated with fund managers including Blackrock Asset Management, BNP Paribas and Comgest to act as a broker for Shariah funds. Its brokerage and advisory service includes a complete digital onboarding journey integrated with know-your-customer (KYC) processes and investment management tools.

Equipped with regulatory approval from BaFin or the German Federal Financial Supervisory Authority, INAIA is preparing to roll out its real estate financing solution; it also secured approval to offer Sukuk for retail real estate financing in Europe.

For its ability to meet an urgent need in the underserved European market and commitment to continuously expand its investment arsenal, all within a largely conventional finance-skewed regulatory environment, INAIA is 2020’s Best Islamic Trading and Investment Platform.

Best Social Impact Firm

This award recognizes the most innovative use of Islamic fintech to deliver social good.

Winner: TEEK TAKA (Bangladesh)

The winner of the 2020 Best Social Impact Firm category is indeed impressive on many fronts. The start-up, TEEK TAKA, exemplifies how Islamic fintech can be deployed to support, uplift and empower vulnerable communities, in line with the UN Social Development Goals.

The Bangladeshi start-up is an ethical finance platform seeking to improve work conditions of blue-collar workers by incentivizing factories with access to cheaper and faster financing and also promoting greater transparency, collaboration and accountability in global supply chains. Its initial focus is the garments industry, but the platform can be accommodated to any sector seeking working capital.

Suppliers register on the platform and provide information on their compliance and commitment to labor standards, such as fair wages, health and safety, and employee welfare — all of which will be verified against international labor standards as well as necessary KYC and anti-money laundering checks. Once these claims are verified, alongside necessary KYC checks, the supplier is given access to the platform where it can apply for Shariah compliant financing. Improved access to working capital enables suppliers to pay workers’ wages, maintain health and safety measures and minimize business disruption.

The significance of such a platform becomes even more apparent in a year ravaged by a global pandemic which has exposed and amplified the structural inequalities faced by suppliers and garment workers as factories shutter businesses as the retail fashion market takes a brutal hit.

In 2020, the start-up, founded by Thaslima Begum, successfully piloted and launched its platform and onboarded over 200 factories. It also was selected by Cambridge University as an innovator for sustainable fashion, was a finalist of the She Loves Tech competition — the world’s largest start-up competition for women leveraging technology for social impact — and was also selected to take part in the Youth Co:Lab regionals by UN Development Programme and Citi Foundation.

Best Islamic Digital Bank

This award recognizes the top start-up offering Shariah compliant digital banking services.

Winner: Kestrl (UK)

There may not be many fully-fledged Islamic digital banks yet; however, the space is indeed brimming with exciting start-ups laying the foundations to challenge traditional banking services with digital solutions. With many at rather early stages of development, one start-up stood out from the crowd by putting its money where its mouth is: it is backing its bold vision with concrete material progress, all within an impressive timeline.

The winner of the 2020 Best Islamic Digital Bank category is the UK’s Kestrl, a mobile app enabling Muslims to budget, save and invest in line with their religious faith and values. The story behind Kestrl is not an unfamiliar one: it all started with a common dilemma faced by everyday practicing Muslims: not being able to readily bank and invest in the UK in a Shariah compliant manner. This was the case for the then-Cambridge MBA students Areeb Siddiqui and Daeng Termizi who both conducted a nationwide survey of Muslim banking habits as part of a research project and found the proposition compelling enough. It did not take long for the both of them to decide to combine their experiences in consulting and working in the local fintech scene as well as experience in the Malaysian Islamic banking industry to fill this market gap: within a year since setting up in November 2019, the duo formed a Malaysia-based tech team, raised GBP135,000 (US$186,080) in a pre-seed round and launched their app which leverages on open banking to allow users to plug in multiple bank accounts to facilitate budgeting, financial planning, savings as well as investing for long-term goals.

Worth noting is the collaborative spirit that Kestrl embodies: it is working with established UK Islamic banks as well as other Shariah fintech start-ups to better serve the UK Muslim market. With the banking incumbents, Kestrl is engaging younger and digitally savvier Muslims by becoming a digital front-end for the banks, providing users with access to their savings accounts and mortgages through the app and integrating them with Kestrl services. The start-up in 2020 also partnered with payment platform Contis to provide savings pots and debit card services. The start-up also established a marketplace, giving users options to invest in Shariah compliant asset classes through other fintech platforms such as Yielders (for properties), Minted (gold) and Qardus (small businesses). While the start-up was fundraising, developing its platform and building a partnership with financial service providers, it also got admitted into the accelerator programs of the University of Cambridge and CMS Lega.

Best Islamic Robo-Advisory Platform
This award recognizes the best digital portfolio management system providing algorithm-based and largely automated Islamic financial investment advice and decisions.

Winner: Wahed Invest (US)

The Best Islamic Robo-Advisory Platform of 2020 is no stranger — if anything, it has become the poster child for Islamic fintech. Wahed Invest, founded in New York, has become a global brand expanding its physical presence into the UK, Malaysia, Bahrain and Saudi while making its services accessible in some 130 countries.

Since its launch in 2017, the start-up has been unstoppable: it grew its business within an incredibly competitive industry by creating a niche which serves and uplifts a historically disenfranchised community. Armed with low fees and minimum investment criteria as well as an easy-to-use platform, Wahed Invest appeals to the mass market across all income brackets, making it the largest Islamic robo-advisor by client count. From 4,000 clients just two years ago, the company has grown its client base to over 100,000 in 2020.

Its first-mover advantage to the Islamic digital investment space is paying off, and it is exciting to see what Wahed Invest will continue to achieve. What is certain is that this start-up is raising the standard for Islamic fintech entrepreneurs.

Best Islamic Financial Software Provider
This award recognizes the best technology company offering technical solutions for financial service providers such as banking software, trading software and accounting software.

Winner: Path Solutions (Kuwait)

The array of submissions received for the category of Best Islamic Financial Software Provider is indeed impressive. With contenders from the Middle East and South Asia to Central Asia and Southeast Asia, the decision was certainly not easy.

The 2020 Best Islamic Financial Software Provider title goes to heavyweight Path Solutions. Serving over 150 Islamic financial institutions across 40 countries, Path Solutions has built an empire over the last three decades. The success of the company is driven by, among others, its strong focus on research and development (R&D). Path Solutions consistently invests 25% of its revenue into R&D which is spearheaded by five of its R&D centers.

Its R&D investments are rewarding: its flagship iMAL Islamic core banking platform is widely used by Islamic finance institutions across four continents, but the company is not resting on its laurels. Path Solutions is currently focusing on offering financial software services that could play a key role as an enabler in enriching the customer’s journey and tracking the value created throughout the financial ecosystem, to generate a better customer experience ecosystem.

The firm in 2020 launched its new Intelligent Digital initiative roadmap with the Path Digital and Path Intelligence platforms as well as an artificial intelligence-powered integrated governance, risk and compliance solution, built on a scalable intelligence platform to provide a single source of truth for an overall risk management and digital strategy.

In essence, the Path Digital suite is an open banking platform connecting digital banking channels to a bank’s services and applications such as core banking, customer relationship management and payment systems to facilitate the bank in delivering a unified and seamless omnichannel user experience while Path Intelligence is a platform with the ability to integrate with any core banking system, enabling banks to harness data and analyze it intelligently using the Enterprise Data Lake, providing a significant competitive advantage to the banks by helping them transform their business to become analytically-focused and customer-centric.

The company’s wide range of AAOIFI-certified solutions benefited the likes of Al Baraka Bank Sudan and Sterling Alternative Finance — the Shariah banking arm of Nigeria’s Sterling Bank — in 2020.

WIFA People’s Choice Award

This award recognizes an Islamic fintech company which has made the deepest impression on the market as voted by our readers and the public.

Winner: Dana Syariah

Commanding over one-third of the votes, Indonesia’s Dana Syariah received the lion’s share of the public’s votes making it the winner of the 2020 WIFA People’s Choice Award.

The popularity of Dana Syariah perhaps does not come as a surprise. Operating in the world’s most populous Muslim nation as an Islamic P2P financing platform, Dana Syariah has made incredible gains in 2020. Despite COVID-19, the start-up managed to grow its business by 300% and expanded its user base.

In 2020, the licensed P2P financier distributed over IDR650 billion (US$44.83 million) in funding, more than twice what it extended in 2018–19. Dana Syariah’s phenomenal growth is fueled by its proactive marketing strategy and solid business proposition: the platform integrates several layers of risk mitigation including only funding properties with guaranteed buyers, funding recipients required to provide collateral in the form of productive real estate assets worth 120% of the total funding amount and the use of a Murabahah sales and purchase agreement.

Best Shariah Compliant Payment, Remittance and FX Platform
This award recognizes companies offering alternative Shariah compliant payment solutions such as mobile payment, e-wallets, payment gateways, the transfer of money in real time between individuals and the exchange of currency.

Winner: Alif Tech (Tajikistan)

Central Asia’s Alif Tech takes home the Best Shariah Compliant Payment, Remittance and FX Platform 2020 crown. Islamic financial services in the CIS [Commonwealth of Independent States] region are still relatively nascent with sporadic activities, but Alif Tech addresses an urgent need in the market with its interest-free Shariah compliant payment and remittance platform, Alif Mobi.

Currently operating in Tajikistan and Uzbekistan (with plans to expand into other neighboring markets), Alif Tech may have humble beginnings as a payment, remittance and FX [foreign exchange] platform, but it is operating with the future in mind, and that is to build a super app housing a holistic ecosystem of digitally-driven Shariah compliant financial and technological solutions.

The company has designed an app which allows users in Tajikistan and Uzbekistan to pay for utilities, enables migrant workers to remit money abroad directly to local payment cards or to its Alif Mobi e-wallet and provides installment financing plans for retail purchases. It is worth noting that the remittance service and P2P transfer service within the e-wallet are commission-free.

In addition to these developments, the start-up in 2020 also secured several licenses: a data processing license from the Ministry for Development of Information Technologies and Communications of Uzbekistan and a license as a payment company from the Central Bank of Uzbekistan. It also obtained resident status at the IT Park in Uzbekistan, becoming the first foreign enterprise to be granted a permit.

Alif Tech has expanded its client pool to over 370,000 users with over 52,000 active users a month; and the digital wallet is proving to be popular among millennials and Gen Z with 60% of its users between the age of 18 and 34 years.

Most Promising Islamic Fintech Start-up of the Year
This award recognizes a fintech start-up that may not have a minimum viable product yet but whose idea demonstrates ingenuity, an ability to deliver sustainable impact to the community/Islamic financial sector and viability.

Winner: Kestrl (UK)

It takes more than just a bold idea to make a fintech start-up promising. It takes vision, the right leaders to steer the ship, solid support to navigate choppy waters and focused execution to ensure success. And Kestrl from the UK has all of these, making it the Most Promising Islamic Fintech Start-up of the Year 2020.

The start-up has identified a tremendous market opportunity in the greatly underserved UK market, produced a compelling business plan and mobilized a strategy built on robust technology as well as collaboration. This is the reason why the firm has been able to make rapid progress within a relatively short period of time.

Within the first 12 months of its launch, Kestrl has been able to raise funds, build a tech team and design, develop, test and launch its app. It has also secured the confidence of eminent Islamic finance professionals such as Sultan Choudhury, former CEO of Al Rayan Bank; James Bagshawe, former CFO of Gatehouse Bank; and Oz Ahmed, CEO of HSBC Amanah, who are advising the start-up.

Internal research by the management team identified a potential market of about 1.9 million Muslims in the UK holding a collective wealth of GBP390 billion (US$537.57 billion); the start-up targets to acquire 10–25% of this market over the next five to 10 years. The start-up is looking to raise its next round this year, which will be used to support its growth: having launched its budgeting tool and marketplace, it is looking to roll out debit cards this year and home purchase financing in 2022. Judging on what it has achieved so far, Kestrl’s future growth does indeed look promising.

Islamic Fintech Company of the Year
This award honors an Islamic fintech company for its outstanding overall performance in product innovation, market reach and delivery of significant impact on society.

Winner: Manzil (Canada)

It is interesting that the leading contenders for both the Most Promising Islamic Fintech Start-up of the Year and Islamic Fintech Company of the Year are from non-Muslim-majority countries.

For its ability to deliver on its promises, dedication to innovation and commitment to serve the Muslim market of Canada, Manzil is the Islamic Fintech Company of the Year 2020. From closing several funding rounds, and launching a range of financing and investment products in a market without dedicated Islamic financial regulations, Manzil is demonstrating great progress and signaling a promising evolution from being merely a Halal mortgage provider to becoming an Islamic challenger bank.



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