Akulaku, an Indonesia-based online multi-finance services firm, is planning to introduce its Shariah-compliant platform during the first half of 2021, according to Efrinal Sinaga, the company’s president director.

In January 2019, Akulaku secured $100 million via a Series D investment round from investors including Ant Financial, Alibaba’s financial services subsidiary. The Jakarta-headquartered Fintech company is an established online multi-finance service provider in Indonesia and has reportedly been valued at about $450 million.

The company now aims to enter the Islamic sector with Akulaku Syariah in order to meet local demand.

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He points out that the preparation and the steps involved in acquiring a Shariah-compliant non-bank financial institution license should take around a year. The process involves the deployment of IT infrastructure, operational systems, and business processes. Akulaku will also be teaming up with Islamic banks, and will work towards getting approval from the national-level fatwa body DSN-MUI. Additionally, the company says it will be putting together a Shariah supervisory board.

Efrinal noted:

“All these take time and we’ll process them in 2020. [During] the first half of 2021 we will already have an Akulaku Syariah version.”

He confirmed that Akulaku has registered its intention to acquire a business license with the Financial Services Authority (OJK).

The company says it’s noticing a trend of traditional banks becoming Shariah-compliant, including Bank Aceh, Bank Nagari in West Sumatra, and Bank NTB. Efrinal says he wants to ensure the company is strategically positioned in key regions to serve their clients.

Efrinal noted:

“If we don’t prepare to enter the Shariah P2P lending market from now, we’ll be too late.” 

Akulaku issued about 4 trillion rupiah (appr. $285 million) in loans from January 2019 to October 2019 and revealed on December 12 that it plans to raise overseas financing in order to achieve its target of 6 trillion rupiah in 2020.

Efrinal mentioned that his firm has obtained approval from Akulaku’s shareholders to introduce Akulaku Syariah.

“We are also looking to the Financial Services Authority’s (OJK) plans to relax the spin-off deadline regarding Islamic banking units (UUS) to become full Islamic banks.”

Regulators are presently reviewing OJK regulation number 31/2014 on Shariah-compliant financing and the reserve bank’s Islamic banking law number 21/2008, which recommends making it mandatory for Islamic banking units (UUS) to serve as a standalone or independent institution by 2023.

Efrinal remarked:

“This matters because we plan to partner with Islamic banks and other financial institutions.”

Efrinal has a lot of experience working with Islamic financial products. In August 2007, he launched PT Al-Ijarah Indonesia Finance, an Islamic multifinance firm that acquired 105 billion rupiah from three different investors including Bank Muamalat Indonesia, Bank Boubyan Kuwait, and Bahrain’s Alpha Lease and Finance Holding BSC. Al-Ijarah Indonesia Finance provides funding of 2 billion rupiah minimum to each borrower.

Efrinal stated:

“I’ve been running my own Shariah financing platform since 2007, so I understand the market and its players.” 

Akulaku launched in 2014 with virtual credit cards and then began providing services for a wide range of digital payments, including mobile phone top-ups and ways to make easy utility bill payments. The company now offers peer-to-peer (P2P) lending, financing, and e-commerce to Indonesian consumers, and also has business offices in the Philippines, Vietnam, and Malaysia.

Courtesy By: https://www.crowdfundinsider.com