We were delighted to welcome Islamic finance expert Abdul Haseeb Basit as our latest Green Fintech Insights guest.
Abdul has enjoyed a long and established career in banking. Having just started a young family around the time of the financial crash in 2008 he began to question his own future career path. He was always drawn to the purpose of Islamic finance and believed there was a gap between what was happening in theory and practice. His keen interest lay in how technology could be applied to innovation and help accelerate access to ethical finance.
After studying an MBA at Imperial College London he joined Innovate Finance (the London HQ-ed FinTech Trade Body) and was exposed to a great variety of fintech innovation making its mark to address financial inclusion and social justice. Now he’s co-founder of Elipses and is one of the key voices in the world of sustainable Islamic finance…
What led you to the world of Islamic finance?
I was always drawn to its purpose but I felt there was a gap between theory and practice. I was interested in how technology could be applied to innovation to accelerate sustainability and responsibility.
Is London a hub for Islamic finance?
After Indonesia, the UK produces the most Islamic fintech. The city is a fintech leader, there is an appetite from policymakers, it has become a leading Sukuk listing destination in the west and the UK Government issued a Sukuk. There are also five UK Islamic institutions.
Here’s a piece I did about the outlook for Sukuk pre-Covid-19, including London’s role, recorded for Fintech TV.
What are the big challenges facing green Islamic finance?
Islamic finance has a 40 year history in building OIC economies, but now there is a great opportunity for sustainable Islamic finance. Growth in the Middle East is impacted by low oil prices and a youthful workforce looking for jobs as traditional corporate and government jobs are declining.
Now is a chance to really revisit the core principles of how we finance a real economy more equitably and put those practices to use into developing green and sustainable sectors creating new jobs and growth to buck the trend.
How can green fintech help answer these challenges?
Technology and innovation provide a great bridge to solutions. Tech platforms are already making access to finance easier for SMEs and better for individuals and can develop more equitable modes of finance using principles of social justice from Islamic finance.
Do you have any examples of how this would work?
Yes, Blossom Finance‘s micro sukuk is accessible for issuers and investors with fractional ownership and transparency via blockchain.
Yielders has made real estate investing more accessible via crowdfunding.
Qardus is making SME loans available via peer to peer lending.
Are there any other ways fintech can help Islamic finance?
Yes with solutions that allow for true risk-sharing between investor and investee. I believe in creating structured investments into projects e.g. hold passive assets including land and buildings in trust, overlaid with alternative financing mechanism for productive assets.
Different risk classes and different revenue streams from land building equipment are separated from tech IP, financed individually and provide investors with risk-adjusted returns. This also promotes fairer distribution of returns & mitigates rent-seeking.
What projects have been keeping you busy?
Projects have ranged from Islamic fintech startups to working with banks sovereigns regulators on fintech strategy. Projects that are most interesting are where new modes of financing are structured especially aligned to the Sustainable Development Goals, green or impact outcomes.
During the Covid-19 period, most of the effort has gone into rallying with other like-minded folks on this topic to understand future opportunities and how to prepare to address them. We all recognise that a return to the old ways is very unlikely.
If anyone wants to connect with you, what are the best ways to get in touch?
Visit elipses.co to find out more about Abdul and his work.