The New Stars Of The Islamic Economy: Finocracy Melds Finance, Ethics, & Technology

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This is part of the series: The New Stars Of The Islamic Economy, featured in the June/July 2017 issue of Inc. Arabia Magazine. Muslims account for one out of every four people on the planet right now and are also one of fastest-growing consumer segments in the world. By all accounts, they are also one of the most under-served when it comes to products and services that appeal to their values and heritage. Here are four MENA startups that are using technology, innovation, design, finance and more to break up that norm.

This is not the first time out for Mohammad Raafi Hossain when it comes to the Islamic economy. Only two years ago, Hossain was the driving force behind Narwi, a non-profit Islamic crowdfunding platform for microfinance.

Narwi let donors support microentrepreneurs in MENA by setting up endowments or “Narwi-Waqf,” with as little as $25. Set up under the aegis of Silatech, a Doha-based organization focused on regional youth employment and enterprise development, Narwi eventually raised $8 million for 175,000 users across the world.

But before the Bangladeshi-origin American national could expand it with his team, there was an offer made to acquire it. The takeover took Narwi out of Silatech’s hands, which is now being developed by the investor, the World Congress of Muslim Philanthropists. This did not leave Hossain dejected though. “Narwi proved to me that we could marry Islamic finance and technology with real results,” he says.

That thought process has resulted in Finocracy in 2016, a Gulf-based organization that Hossain describes as a “think and do tank,” which he formed with Mohammed Al Sharaf, a seasoned Bahraini business development leader in the Islamic economy.

“Here, we create our initiatives, concepts, and platforms at the intersection of finance, ethics, and technology,” he explains. “We focus on Islamic economic ethos even if not strictly Islamic finance.”

In its short existence, Finocracy has worked with banks, government organizations, multinationals, Big 4, and even with other startups in the space.

“Part of our work is to do with building talent in the space, particularly entrepreneurs…in fintech for example,” he says.

“Then we are also working with multiple Islamic finance organizations, on the board level, helping them expand in emerging markets and reach their target demographic.”

“There is no company like us. We are taking this ambitious outlook that we can make novel concepts come to life.”

The third line of function in the business is working with governments, including Western ones, “advising them on how they can create an enabling environment” for the Islamic economy to flourish in their countries.

One of its projects is a soon-to-be-launched global hackathon series (across eight countries) for the private sector arm of the Jeddah-based Islamic Development Bank to develop the Islamic fintech ecosystem. This series will eventually culminate in the setting up of what could be the first Islamic fintech accelerator.

Another project is Human Crescent, a first-of-its-kind crowdfunding platform for Zakat, the compulsory giving of a set proportion (2.5%) of a Muslim’s wealth to charity, which matches donors with charities.

“It will be blockchain-enabled, where both users and charities will be able to track Zakat end-to-end,” Hossain explains.

Explaining the rationale, Hossain says that Zakat represents a $200 billion space at a minimum and that the annual deficit the UN faces in meeting humanitarian needs is about $10 billion.

“So, if we can aggregate even about 5% of this, we would be able to eradicate this shortfall for emergency needs,” like in the case of the Syrian refugee crisis, says Hossain, who worked with the UN in the early part of his career.

More such projects will follow, says Hossain, with newer partners in countries across the world. “There is no company like us. We are taking this ambitious outlook that we can make novel concepts come to life,” he claims. “And we are betting that there are investors, governments, and organizations that can then scale these concepts for the Islamic audience.”

Photos: Anna Nielsen