Despite significant progress in access to banking products and services spurred by the Covid-19 pandemic, large numbers of people remain without full access to banking products that allow them to pay for essentials, educational pursuits, or to make investments.

We believe there are still opportunities in this space, in particular within the Islamic world. That’s why we are proud to support Islamic finance superapp and banking-as-a-platform IMAN.

Islamic Finance: The Nuts & Bolts

Islamic finance principles are rooted in Islamic or Sharia laws, which prohibit, for example, lending money with interest. Instead of charging interest, Sharia-compliant banks rely on equity participation. When a business takes out a bank loan, it pays it back by giving the bank a share of its profits. If the business defaults or doesn’t earn a profit, the bank can register a loss. 

Problem: More than half of the world’s unbanked adults live in seven economies according to the World Bank’s 2021 Global Findex. Five of these seven economies are Muslim-dominated and 71% of those unbanked adults are women. The availability of Sharia-compliant banking and financial products in countries such as Uzbekistan remains scarce. For women and the unbanked in general, it means that traditional sources of credit worthiness and therefore access to credit are a challenge. In nine countries across the MENA region, the IFC estimates that SMEs are in need of up to $13.2 billion in Islamic finance. 

Solution: IMAN enables people to invest or get funding in line with their values and close the Islamic finance funding gap.  IMAN’s mobile platform for Muslim-majority markets consists of IMAN Invest, an investment platform, and IMAN Pay, a Sharia-compliant financing solution. IMAN partners with banks to offer those services to previously unbanked individuals or those without access to convenient Sharia-compliant offerings.

IMAN Pay works with merchants at the point of sale to provide Sharia-compliant financing products and services. It is already operating in Uzbekistan, and will be operating in Kazakhstan later this year. Consumers can purchase items, such as food and books without interest. Using a proprietary method, IMAN calculates the credit worthiness of previously unbanked individuals, opening access to women and traditionally underserved individuals. IMAN Invest, which the company says is already being used by more than 25,000 retail investors, allows access to Sharia-compliant investments from IMAN partners. These investments in turn help to fund consumer goods and services, such as medical care, training courses, and appliances.

Getting to know the team

Rustam Rahmatov and Mark Zubov founded Iman in 2021. We’re excited to have such a high caliber team working in this space.  Rustam  and Mark  have been building and investing in emerging fintech markets together since 2018. Rustam, who’s CEO, previously worked for the IFC, while Mark, who’s CFO, was most recently with CrossBoundary, a US-based investment firm focused on frontier markets. The technical team includes Bobir Nurmukhamedov and Alisher Ilyasov who built infrastructure for TBC Bank in Uzbekistan.

Future plans

The team is currently expanding into other emerging markets with young and tech-savvy Muslim populations that have increasing disposable incomes and rising e-commerce digital payment penetration. Following Uzbekistan and Kazakhstan, Rustam and Mark plan to expand to Pakistan, broader South Asia, and MENA. In these new markets, the company is partnering with local banks and fintechs, which would enable them to launch co-branded Islamic digital products. In addition, IMAN’s team is building a decentralized finance protocol that will connect investors seeking Sharia-compliant yield with fintech lenders in emerging markets where there is a gap in access to capital.

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