Final yr, we revealed an version of Finovate International 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 affords a complete platform for moral investing, Halal inventory buying and selling, and monetary schooling. Greater than 487,000 Muslim traders in 195 nations use Musaffa’s platform, which offers entry to shares in nations starting from the U.S., U.Ok., and Australia to Malaysia, the UAE, and Turkey.
Musaffa lately launched its Purification Calculator, which permits Muslim traders to confidently establish and spend money on Shariah-compliant companies. And at a time when extra traders are in search of investments that align with their values, Musaffa’s superior screening instruments, monetary schooling, and different options may be helpful to ESG-oriented traders in addition to faith-based ones.
In our prolonged dialog, Jumaniyazov helps us perceive the dimensions 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 reminiscent of banking to wealth administration.
How huge is the marketplace for Shariah-compliant monetary options? How has this market grown within the West specifically? Are there nations within the West the place the demand for Shariah-compliant monetary options is very sturdy?
Dilshod Jumaniyazov: The marketplace for Shariah-compliant monetary options isn’t just huge—it’s rising quick. In 2022, the worldwide Islamic finance trade expanded by 11%, reaching $4.5 trillion in belongings, and it’s anticipated to develop to $6.7 trillion by 2027, based on the ICD-LSEG Islamic Finance Growth Report 2023.
Within the West, Islamic finance has gained important 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 a vital position in driving this progress.
Sure Western nations stand out for his or her sturdy demand. In line with International Finance Journal, the U.Ok. is a transparent chief, serving as a world hub with 5 Islamic banks and greater than 20 standard banks providing Shariah-compliant merchandise. Luxembourg, the primary Eurozone nation to challenge a sovereign sukuk, hosts a variety of Shariah-compliant funds. Germany has made important 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 monumental untapped potential regardless of its comparatively underdeveloped Islamic finance market.
This mixture of moral investing and growing demand in key areas has positioned the West as an rising pressure in Shariah-compliant finance.
What are we speaking about after we speak about Shariah-compliant finance? How is it completely different from financing within the West?
Jumaniyazov: Shariah-compliant finance is rooted in Islamic ideas that emphasize equity, transparency, and social duty. It prohibits incomes or charging curiosity (riba), extreme hypothesis (gharar), and investments in dangerous industries reminiscent of 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, somewhat 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 aside from Western finance is its deeply embedded moral framework. Whereas Western finance usually 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 give attention to fairness, accountability, and real-world impression makes Shariah-compliant finance a compelling various, particularly for these looking for a extra values-driven strategy to managing wealth.
How has digital transformation impacted the marketplace for Shariah-compliant finance. Has expertise made it simpler to innovate and create new options for the group?
Jumaniyazov: Digital transformation has utterly reshaped the panorama of Shariah-compliant finance, making it extra accessible and revolutionary than ever earlier than. With the rise of digital banking and cellular cost platforms tailor-made to the wants of Muslim customers, monetary companies at the moment are reaching communities that have been beforehand underserved. This has opened up alternatives for progress and inclusion on a world 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 completely new methods to strategy halal and moral finance. By breaking down limitations and lowering prices, digital transformation has turned Shariah-compliant finance right into a dynamic, forward-thinking sector that’s extra related than ever in as we speak’s world.
Is there a task for AI in Shariah-compliant finance?
Jumaniyazov: AI is revolutionizing Islamic finance by making it extra environment friendly, revolutionary, and accessible whereas staying true to its moral ideas. One in every of its most important 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 might in any other case be time-intensive and complicated. This ensures that traders can confidently align their portfolios with their religion.
AI can also be remodeling Islamic monetary merchandise, reminiscent of sukuk. By enabling sensible contracts, it has improved the transparency, effectivity, and trustworthiness of sukuk issuances. With functions like blockchain integration and superior analytics, AI isn’t just addressing operational challenges but additionally opening doorways for innovation, making Islamic finance extra dynamic and globally related whereas adhering to Shariah ideas.
You might be CEO of Musaffa, an organization that has developed Shariah-compliant options. Are you able to inform us a little bit 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 usually 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 burden of uncertainty, questioning if I used to be compromising my ideas. As I shared my experiences with buddies and colleagues, I spotted this was not simply my wrestle — it was a problem confronted by hundreds of thousands of Muslims worldwide in a monetary panorama that supplied little steerage or transparency for faith-aligned investing.
This realization sparked a imaginative and prescient over a decade in the past: to create a platform that might empower Muslims globally to take a position ethically and confidently whereas staying true to their religion. Nonetheless, I rapidly 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 expertise crew 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 over time. 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 offers 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. By Musaffa Academy, we provide tailor-made programs in monetary literacy and Islamic finance, equipping our customers with the data to make knowledgeable choices. 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.
Consequently, Musaffa has grown to serve over 482,000 customers throughout 195 nations. Our customers belief us to offer peace of thoughts and a solution to align their investments with their religion. With options like superior Shariah compliance screening, built-in buying and selling choices, and a sturdy instructional platform, Musaffa has turn into a trusted associate for Muslim traders worldwide.
Wanting forward, we’re excited to increase 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 will not be simply the instruments we offer however our unwavering dedication to fixing actual challenges. We’re not simply providing a platform; we’re creating a world monetary ecosystem rooted in religion, belief, and ethics.
At present, I’m extremely happy with how far Musaffa has come. It stands as a testomony to years of dedication, the assumption 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 around the globe to take a position with confidence and objective.
Who’re Musaffa’s major prospects and the way do you attain them?
Jumaniyazov: Musaffa’s major prospects are particular person traders worldwide who search to spend money on 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 nearly all of our site visitors. Moreover, we leverage the Musaffa Ambassador Program, which empowers passionate people to characterize our model and produce extra customers to the platform. Phrase-of-mouth referrals additionally play a pivotal position in constructing belief and increasing our attain inside this values-driven viewers. Collectively, these channels foster a powerful and genuine reference to our prospects.
You latterly 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 thus far?
Jumaniyazov: The Purification Calculator is an indispensable device designed to make sure that Muslim traders can preserve Shariah compliance of their investments. Purification is a compulsory situation for any funding to be thought of Shariah-compliant, because it includes cleaning portfolios of any unintended non-compliant revenue. The calculator simplifies this course of by figuring out the precise quantity that must be donated to charity, enabling traders to align their earnings with Islamic ideas.
We launched this answer to handle a crucial concern for Muslim traders and to simplify a course of that many discovered advanced or unsure. The suggestions has been overwhelmingly constructive, 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 give attention to halal funding analysis. With extra Muslims desirous to align their monetary choices with their religion, the demand for instruments and analyses to establish 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 traders make assured, knowledgeable choices in a fancy market.
One other space I discover fascinating is how digital platforms are remodeling entry to halal investments. From sukuk to Shariah-compliant ETFs and shares, expertise is making it simpler for individuals to search out and spend money on Shariah-compliant and moral belongings. This mixture of analysis and innovation is bridging a crucial hole for Muslim traders, serving to them develop their wealth whereas staying true to their values; it’s an thrilling time to see how the trade is evolving to satisfy 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 have a look at fintech innovation around the globe.
Central and Southern Asia
Latin America and the Caribbean
Blockchain and cryptocurrency infrastructure firm Binance gained approval from the Central Financial institution of Brazil to amass 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 internet banking platform.
Central and Jap 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 reap the benefits of alternatives in open banking.
German fintech Cleversoft introduced its intention to amass Turkish monetary messaging and AML compliance options supplier Fineksus.
Center East and Northern Africa
Qatar-based Doha Financial institution to go stay with Visa Industrial Pay, the primary financial institution available in the market 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.
Enthusiastic about demoing at FinovateEurope 2025 in London? Functions are nonetheless being accepted from revolutionary corporations with new options which might be prepared to point out. Go to our FinovateEurope hub as we speak to be taught extra.
Picture by Aa Dil
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