by: Grow VC Group
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“Muslims comprise approximately a quarter of the global population, and yet Islamic-based financial assets comprise only less than one percent of total global financial assets,” a finance expert observes. Digital investing could be an additional way to allow muslim investors around the world to invest in a Shariah compliant way.

Islamic finance or banking was developed in the second half of the 20th century and it is based based on the principles enshrined in Islamic law, or Shariah. In practice, that means lenders cannot collect interest of any kind, nor are they allowed to invest in businesses considered to be unlawful) under Shariah law — casinos or bars, for example. Non-muslim investors are allowed to invest.

Online investing is still a market of very limited dimensions in the few Muslim countries where it has established – especially compared to the Western ones – and it is almost nonexistent in many others. However, after Malaysia regulated the sector last year (we reported details about the legal framework in this article), a couple of platforms operating in a Shariah compliant way have launched and are currently gaining traction. Although a few platforms, operating according to Islamic finance, have launched, the road to go before digital investing becomes mainstream is still quite long.

It is evident that there is space for more online investing portals operating according to Islamic finance. In fact, the Shariah compliant financial sector is growing faster than banking assets as a whole, growing at an annual rate of 17.6% between 2009 and 2013, and is projected to grow by an average of 19.7% a year to 2018. We therefore expect to see more digital investing conducted under Islamic finance principles in the next few years.

Read the whole article on Crowd Valley Blog.


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Grow VC Group The Grow VC Group is the world leading, global pioneer of securities crowd funding, peer to peer marketplaces, new investment models and global business development. Established in 2009, the Group has developed new investment models on six continents and continues to innovate the global market.

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This entry was posted on Monday, December 14th, 2015 at 6:00 am and is filed under Business Updates. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.