Indonesia Could Become the New Hub for Shariah Fintech

By definition, Shariah fintech includes digital payments, or peer-to-peer (P2P) platforms that abide by Shariah principles. Shariah fintech differs from conventional fintech by following a profit-sharing model instead of charging interest, investing profits in only halal investments excluding sectors such as alcohol, pork and gambling, and by being encouraged to choose investment projects that aim to help low-income and underserved groups within the society.

Statistics also promote the case for growing Shariah fintech in Indonesia. According to the Asian Development Bank (ADB), 35% of Indonesia’s 270 million population is currently unbanked. This becomes important given that the Small and Medium Enterprise (SME)...