Final yr, we revealed an version of Finovate World that featured new developments in Islamic finance. This week’s column will discover additional the world of Islamic and Shariah-compliant monetary companies with Dilshod Jumaniyazov, CEO and co-founder of Musaffa.
Launched in 2020 and headquartered in New York, Musaffa provides a complete platform for moral investing, Halal inventory buying and selling, and monetary schooling. Greater than 487,000 Muslim buyers in 195 nations use Musaffa’s platform, which supplies entry to shares in nations starting from the U.S., U.Ok., and Australia to Malaysia, the UAE, and Turkey.
Musaffa not too long ago launched its Purification Calculator, which permits Muslim buyers to confidently determine and put money into Shariah-compliant companies. And at a time when extra buyers are in search of investments that align with their values, Musaffa’s superior screening instruments, monetary schooling, and different options could be helpful to ESG-oriented buyers in addition to faith-based ones.
In our prolonged dialog, Jumaniyazov helps us perceive the scale and scope of Islamic and Shariah-compliant finance, the distinctive wants of the purchasers on this rising market, and the way enabling applied sciences are bringing innovation to Islamic monetary companies in areas resembling banking to wealth administration.
How massive is the marketplace for Shariah-compliant monetary options? How has this market grown within the West particularly? Are there nations within the West the place the demand for Shariah-compliant monetary options is very robust?
Dilshod Jumaniyazov: The marketplace for Shariah-compliant monetary options is not only massive—it’s rising quick. In 2022, the worldwide Islamic finance business expanded by 11%, reaching $4.5 trillion in belongings, and it’s anticipated to develop to $6.7 trillion by 2027, in keeping with the ICD-LSEG Islamic Finance Growth Report 2023.
Within the West, Islamic finance has gained vital traction, significantly because the 2008 monetary disaster, when it emerged as a extra secure and moral various. Within the U.Ok., Islamic banks have doubled their belongings over the previous decade, reflecting a rising demand for Islamic finance. Sukuk issuances have additionally elevated throughout Europe, with nations like Luxembourg and Germany main the cost. The broader development of sustainable and values-based investing has performed an important function in driving this development.
Sure Western nations stand out for his or her robust demand. Based on World Finance Journal, the U.Ok. is a transparent chief, serving as a worldwide hub with 5 Islamic banks and greater than 20 typical banks providing Shariah-compliant merchandise. Luxembourg, the primary Eurozone nation to concern a sovereign sukuk, hosts a variety of Shariah-compliant funds. Germany has made vital strides by issuing sukuks and licensing its first Islamic financial institution, highlighting its rising curiosity within the sector. In the meantime, France, with Europe’s largest Muslim inhabitants, holds huge untapped potential regardless of its comparatively underdeveloped Islamic finance market.
This mixture of moral investing and rising demand in key areas has positioned the West as an rising pressure in Shariah-compliant finance.
What are we speaking about once we discuss Shariah-compliant finance? How is it totally different from financing within the West?
Jumaniyazov: Shariah-compliant finance is rooted in Islamic ideas that emphasize equity, transparency, and social accountability. It prohibits incomes or charging curiosity (riba), extreme hypothesis (gharar), and investments in dangerous industries resembling playing, alcohol, and weapons. As an alternative, it focuses on moral investing, risk-sharing, and linking all monetary transactions to actual financial actions. For instance, moderately than counting on conventional interest-based loans, Shariah-compliant finance makes use of fashions like mudarabah (profit-sharing) and musharakah (joint ventures), the place dangers and rewards are shared amongst all events. This strategy ensures that monetary actions create tangible worth and profit society.
What units Shariah-compliant finance other than Western finance is its deeply embedded moral framework. Whereas Western finance typically revolves round interest-bearing loans and speculative investments, Shariah-compliant finance requires each transaction to align with ethical ideas and financial justice. It’s not nearly revenue — it’s about creating shared prosperity and avoiding hurt. This concentrate on fairness, accountability, and real-world influence makes Shariah-compliant finance a compelling various, particularly for these in search of a extra values-driven strategy to managing wealth.
How has digital transformation impacted the marketplace for Shariah-compliant finance. Has know-how made it simpler to innovate and create new options for the neighborhood?
Jumaniyazov: Digital transformation has fully reshaped the panorama of Shariah-compliant finance, making it extra accessible and progressive than ever earlier than. With the rise of digital banking and cell cost platforms tailor-made to the wants of Muslim customers, monetary companies are actually reaching communities that have been beforehand underserved. This has opened up alternatives for development and inclusion on a worldwide scale.
Know-how has additionally sparked thrilling developments like digital sukuks and blockchain-based sensible contracts, which align completely with Islamic ideas. These improvements haven’t solely made processes extra environment friendly, however have additionally launched totally new methods to strategy halal and moral finance. By breaking down boundaries and lowering prices, digital transformation has turned Shariah-compliant finance right into a dynamic, forward-thinking sector that’s extra related than ever in at present’s world.
Is there a task for AI in Shariah-compliant finance?
Jumaniyazov: AI is revolutionizing Islamic finance by making it extra environment friendly, progressive, and accessible whereas staying true to its moral ideas. One in every of its most vital contributions is in screening shares and ETFs for Shariah compliance. AI can analyze giant datasets to evaluate whether or not investments meet Islamic standards, streamlining a course of that will in any other case be time-intensive and complicated. This ensures that buyers can confidently align their portfolios with their religion.
AI can also be reworking Islamic monetary merchandise, resembling sukuk. By enabling sensible contracts, it has improved the transparency, effectivity, and trustworthiness of sukuk issuances. With purposes like blockchain integration and superior analytics, AI is not only addressing operational challenges but additionally opening doorways for innovation, making Islamic finance extra dynamic and globally related whereas adhering to Shariah ideas.
You’re CEO of Musaffa, an organization that has developed Shariah-compliant options. Are you able to inform us a bit of about Musaffa and the way you got here to co-found the corporate?
Jumaniyazov: In fact. The journey to founding Musaffa started with a deeply private problem. Over my 16 years of investing, I typically confronted a dilemma — questioning whether or not my investments aligned with my religion and values as a Muslim. Each time I ventured into the inventory market, I carried the load of uncertainty, questioning if I used to be compromising my ideas. As I shared my experiences with pals and colleagues, I noticed this was not simply my wrestle — it was a problem confronted by tens of millions of Muslims worldwide in a monetary panorama that provided little steering or transparency for faith-aligned investing.
This realization sparked a imaginative and prescient over a decade in the past: to create a platform that will empower Muslims globally to take a position ethically and confidently whereas staying true to their religion. Nevertheless, I shortly acknowledged that making this imaginative and prescient a actuality required extra than simply ambition. It demanded deeper data, broader expertise, and substantial capital.
Decided to bridge these gaps, I pursued an MBA on the College of Illinois at Urbana-Champaign and earned my CFA designation to strengthen my experience in finance. I gained invaluable expertise working with the know-how workforce at Wells Fargo Securities, the place I contributed to launching a number of buying and selling platforms. Alongside this, I saved diligently, setting apart funds from my paychecks and 401(ok) financial savings through the years. By late 2020, with $250,000 of my very own financial savings, I used to be able to carry Musaffa to life.
Musaffa is greater than only a platform — it’s an answer to a deeply felt drawback. At its core, Musaffa supplies entry to over 90,000 shares and 9,000 ETFs globally, all meticulously analyzed for Shariah compliance. The platform permits customers to seamlessly purchase and promote halal shares by an built-in community of brokerages.
Schooling is one other cornerstone of our mission. Via Musaffa Academy, we provide tailor-made programs in monetary literacy and Islamic finance, equipping our customers with the data to make knowledgeable selections. These instruments are designed not simply to assist Muslims make investments, but additionally to empower them to grasp and take management of their monetary journeys.
Because of this, Musaffa has grown to serve over 482,000 customers throughout 195 nations. Our customers belief us to supply peace of thoughts and a method to align their investments with their religion. With options like superior Shariah compliance screening, built-in buying and selling choices, and a sturdy academic platform, Musaffa has develop into a trusted accomplice for Muslim buyers worldwide.
Wanting forward, we’re excited to broaden our choices by launching proprietary Shariah-compliant ETFs and additional integrating into international markets. Our purpose is to make halal investing much more accessible and to proceed simplifying entry to the $30 trillion Shariah-compliant market.
What units Musaffa aside usually are not simply the instruments we offer however our unwavering dedication to fixing actual challenges. We’re not simply providing a platform; we’re creating a worldwide monetary ecosystem rooted in religion, belief, and ethics.
At present, I’m extremely pleased with how far Musaffa has come. It stands as a testomony to years of dedication, the idea that monetary success ought to by no means come on the expense of 1’s values, and a imaginative and prescient that’s empowering Muslims world wide to take a position with confidence and goal.
Who’re Musaffa’s main prospects and the way do you attain them?
Jumaniyazov: Musaffa’s main prospects are particular person buyers worldwide who search to put money into alignment with their values, in addition to each Islamic and conventional monetary establishments. We interact with them by a strategic mixture of focused digital campaigns, partnerships with Islamic organizations, and our strong schooling platform, Musaffa Academy, which drives the vast majority of our visitors. Moreover, we leverage the Musaffa Ambassador Program, which empowers passionate people to characterize our model and convey extra customers to the platform. Phrase-of-mouth referrals additionally play a pivotal function in constructing belief and increasing our attain inside this values-driven viewers. Collectively, these channels foster a robust and genuine reference to our prospects.
You lately launched a Purification Calculator? Are you able to inform us about this answer: why you launched it, what it does, and the way the reception of it has been to date?
Jumaniyazov: The Purification Calculator is an indispensable device designed to make sure that Muslim buyers can keep Shariah compliance of their investments. Purification is a compulsory situation for any funding to be thought-about Shariah-compliant, because it entails cleaning portfolios of any unintended non-compliant earnings. The calculator simplifies this course of by figuring out the precise quantity that must be donated to charity, enabling buyers to align their earnings with Islamic ideas.
We launched this answer to deal with a vital concern for Muslim buyers and to simplify a course of that many discovered complicated or unsure. The suggestions has been overwhelmingly optimistic, because the device empowers customers to take a position with confidence, realizing their monetary actions align with each their religion and values.
What are a number of the most attention-grabbing issues occurring in Islamic finance proper now to you personally?
Jumaniyazov: For me, probably the most thrilling developments in Islamic finance is the rising concentrate on halal funding analysis. With extra Muslims eager to align their monetary selections with their religion, the demand for instruments and analyses to determine Shariah-compliant alternatives is stronger than ever. This isn’t nearly screening shares; it’s about offering in-depth analysis and actionable insights that assist buyers make assured, knowledgeable selections in a posh market.
One other space I discover fascinating is how digital platforms are reworking entry to halal investments. From sukuk to Shariah-compliant ETFs and shares, know-how is making it simpler for folks to seek out and put money into Shariah-compliant and moral belongings. This mixture of analysis and innovation is bridging a vital hole for Muslim buyers, serving to them develop their wealth whereas staying true to their values; it’s an thrilling time to see how the business is evolving to fulfill each faith-driven and monetary wants.
What can we anticipate to listen to from Musaffa in 2025?
Jumaniyazov: In 2025, at Musaffa, we plan to launch a complete Islamic finance schooling platform, introduce our proprietary Shariah-compliant buying and selling platform, and start providing unique Shariah-compliant ETFs following SEC licensing approval. Our purpose is to solidify our place because the premier international platform for halal investments whereas considerably increasing our person base.
Right here is our take a look at fintech innovation world wide.
Central and Southern Asia
Latin America and the Caribbean
Blockchain and cryptocurrency infrastructure firm Binance received approval from the Central Financial institution of Brazil to accumulate a regionally licensed broker-dealer.
Union Financial institution of India launched new accessibility options to its Digital Rupee app.
Chilean fintech Tanner Servicios Financieros raised $40 million in funding from the Worldwide Finance Company.
Asia-Pacific
Sub-Saharan Africa
South African fintech Sourcefin raised $8.2 million in funding to assist SME financing.
Monetary companies supplier Mukuru secured a Deposit-Taking Microfinance Establishment (DTMFI) license in Zimbabwe.
Nigeria-based Bankit MFB launched its new net banking platform.
Central and Japanese Europe
Digital asset infrastructure firm Taurus expanded its operations in Turkey.
Serbian IT firm Saga teamed up with Salt Edge to assist banks in Serbia benefit from alternatives in open banking.
German fintech Cleversoft introduced its intention to accumulate Turkish monetary messaging and AML compliance options supplier Fineksus.
Center East and Northern Africa
Qatar-based Doha Financial institution to go reside with Visa Industrial Pay, the primary financial institution out there to take action.
Iraqi fintech firm Qi Card launched its app SuperQi, which serves as each a way of life tremendous app and a digital financial institution.
Italian software program firm TeamSystem acquired Israeli fintech Morning for $150 million.
Thinking about demoing at FinovateEurope 2025 in London? Purposes are nonetheless being accepted from progressive firms with new options which can be prepared to indicate. Go to our FinovateEurope hub at present to study extra.
Picture by Aa Dil
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