SC unveils Fikra to broaden Islamic fintech in Malaysia’s capital market

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KUALA LUMPUR: The Securities Commission Malaysia (SC) seeks to broaden Islamic financial technology (fintech) in the country’s capital market via its FIKRA Islamic Fintech Accelerator Programme (FIKRA).

FIKRA aims to identify and scale relevant and innovative Islamic fintech solutions that can help address three main challenge areas, namely, new Islamic capital market (ICM) offerings, accessibility and social finance integration.

“Islamic fintech in the Malaysian capital market is still at a nascent stage, but there is great potential for exponential growth with the right ecosystem,” chairman Datuk Syed Zaid Albar said in his speech at the launch of the programme today.

FIKRA is a collaboration between the SC and the United Nations Capital Development Fund (UNCDF).

Zaid said with global Islamic finance assets projected to grow to close to US$4 trillion in 2024, the use of digital technology would be key for Islamic to enhance its potential.

Islamic fintech comprises digital solutions or technologies that are deployed in Shariah-compliant financial activities and transactions, while upholding and entrenching Islamic rules and values. This includes promoting transparency, fairness and equitable risk-sharing in finance.

Zaid noted that the development of Islamic fintech is thus an essential element for Malaysia’s continued positioning as a global Islamic finance centre.

It also provides an opportunity to align the capital market towards socially impactful outcomes, which includes poverty alleviation, protecting livelihoods and supporting the needs of the underserved and lower-income segments.

“For new ICM offerings, FIKRA’s first task is to solicit ideas on new products designed with Islamic principles and values at their core.

“We hope to encourage the growth of offerings that can deliver the unique value proposition of Islamic finance. This includes a wider embodiment of wholesomeness (halalan toyyiban) to serve the needs of not just Muslims but also the wider community,” he said.

Fikra, which means ideas, is designed to turn ideas into real-life solutions, taking innovators through the entire value chain from ideation, solutions validation, prototype building, creating a fundraising pitch deck, to preparing applicants for an effective pitching to potential investors and more.

Fintech start-ups, who participate in FIKRA’s first accelerator initiative, will benefit from regulatory guidance, the programme’s mentorship, social networks, and more.

Meanwhile, UNCDF executive secretary Preeti Sinha said to achieve Sustainable Development Goals (SDGs), it is important to ensure that product offerings focus on building financial resilience and security for the people we serve.

“As we look to broaden market participation, FIKRA can be an avenue for innovators to cultivate their solutions that can potentially provide a much-needed and timely boost for the Malaysian ICM,” she said.

The programme is currently open for registration, and is scheduled to commence in July 2021 for three months, culminating in a public virtual demo day during the annual SCxSC Fintech Conference 2021.

More information can be obtained at UNCDF website. Applications close on June 30, 2021. – Bernama



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