Islamic Fintech Industry is growing rapidly in Pakistan as Pakistan provides a huge untapped market, which was previously excluded from the financial circle. Islamic Fintech industry provides ways of Shariah compliant, transparent, digital, easy and quick banking facilities that are cost effective and completely automated and standardized. Many new companies are coming to fulfill this need in Pakistan. Pakistan is home to a population of over 225 million people, with an overwhelming Muslim majority. The country has 22 banks, 17 of which have stand-alone Islamic windows and 5 are fully fledged Islamic banks. Still there are around 80 million adults in Pakistan without Bank accounts, while only about 2.5% of the population has access to financing products. Thus, there is huge market opportunity for Islamic Fintech to step-in and tap this segment of population. This great market opportunity is driving the growth of Fintech Companies in Pakistan.
The main aim of Islamic Fintech is to provide a solution to the basic issues faced by Muslims in the current banking system and provide them with smart solutions in line with the teaching of their religion. There are many challenges and difficulties faced by users of traditional banking system such as long waiting time, high charges, poor service, lack of awareness etc. In addition, many Islamic banks are also facing problems related to documentation process due to lack of knowledge and skill to operate these systems. Islamic Fintech companies can provide smart, tech-savvy solutions for these issues and also tap the unbanked sector in Pakistan and cater to their investment and financing needs with their new innovated products and service solutions.
Some of the key areas where the Islamic finance model integrated with technology, can be used today are as follows:
Growth of Islamic fintech:
The Islamic Fintech sector is growing rapidly in Pakistan as well as in the rest of the world. As per the report published by United States Department of Treasury, the Islamic FinTech industry is expected to grow at a rate of around 18% annually. According to PWC, the size of the global Islamic capital market will reach $1 trillion by 2025. The main focus of Islamic Fintech is to provide a simple and easy way to understand and use Sharia compliant products and services. They are working on different levels like;
In Short Islamic Fintech is is very useful for the fast growth of the economy as it would facilitate especially SMEs and Micro businesses to scale up their businesses without too much documentation having everything digitally integrated in app that would fast the process of execution and transaction Standardization and transparent .Further it will increase financial inclusion and properly prudent documented of economy which eventually broaden the tax revenues for the country انشاءاللہ
Another big benefit of it would make the flow of capital towards mid and lower businesses than only towards very limited corporate finance and only few rich people. Which is again one of the objectives of Shari’ah that the wealth must not be concentrated in few hands.
For these reasons if attend towards islamic fintech model at large, it would be very useful for whole economy انشاءاللہ.
For further details please visit : Greensfin.com or Usmaniandco.com
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