@Halal May/Jun 2020 - Page 21

may-june. 2020 | @Halal Islamic Finance 21 A leader in Islamic Social Financing Finterra is expanding into supporting community land for better value-added activities such as tree-planting FinTerra is a leading technologybased company providing blockchain-based islamic applications that address global issues. it was established in 2017 and currently has a presence in Malaysia, Singapore, Hong Kong, the Uae and india with plans to expand into africa and the rest of the Middle east. globally, Finterra promotes community growth and advocates for the mass adoption of the groundbreaking blockchain technology, serving as a “Social Solution for Blockchain”. its ecosystem comprises core banking, digital banking and blockchain solutions developed to bridge the gap between users, merchants and financial institutions. Finterra’s flagship products, the WaQF Chain & ensany Sadaqah Chain have both been developed to revitalise the islamic Social economic system for the digital age using blockchain technology. With relevant regulatory compliance built into the products and services, both the Waqf & Sadaqah Chain solve core challenges in unlocking and integrating options for capital raising, Waqf management and asset management. it is now heading towards supporting community land for better value-added activities such as tree planting. @Halal spoke to Finterra Managing Director Satesh Khemlani on what lies ahead for the company. What is the role of Finterra as one of the Fintech companies involved in the development of Islamic Social Finance? Finterra is one of the first of its kind to use Financial Technology (Fintech) to achieve islamic Social Finance. By using technologies such as blockchain, it brings islamic Social Finance to a broader general public by making it more accessible through its platforms. We know that Finterra is the leading technology-based company providing blockchain-based Islamic applications that address global issues. Can you tell us more about blockchain technology and how blockchain can be integrated into Islamic Financing and support Project Financing compared to the current standard practice? First of all, blockchain technology is a decentralised ledger that keeps a record of all transactions that take place across a peerto-peer network. although, complex, most individuals & organisations have started adopting it in today’s world due to its many benefits such as transparency, security and immutability. With regards to how blockchain can be integrated into islamic finance for project financing, we are funding a previously untapped asset class (waqf lands) using blockchain technology. Blockchain can be a trustable means to help tokenise this new asset class. That, in turn, provides partial ownership through tokenisation to the investors using the blockchain trust mechanism. Finterra managing director satesh Khemlani. Can you elaborate more about Shariah compliance in blockchain technology? How can shariah-compliant funds be utilised in project financing, and what is the mechanism? Finterra has spent years in conducting thorough research in shariah-based financial instruments for project financing. We have come up with financing tools which adhere to islamic finance instruments such as Sukuk, Madarabah and Musharakah. We have also created new ways to use blockchain technology to govern these instruments in a project financing ecosystem. in essence, we have come up with a microfinance ecosystem which uses blockchain to create, grow and regulate shariah-based islamic social finance instruments for project financing. Waqf is recognised as the most notable expression of Islamic philanthropy. Can you explain more about Waqf and how Finterra implements Waqf in creating and managing the wealth of Muslims? And at the same time, does it benefit non-Muslims? Waqf is indeed philanthropic. However, one crucial point is that through specific instruments, it can also be a wealth-generating tool not only for philanthropy. Finterra has created a technology platform which acts as a marketplace for Waqf projects which are both wealth-generating and with philanthropic objectives. Is crowdfunding also part of Islamic financing? Yes, it has always been part of islamic social finance. it is one of the significant strands which differentiates debt-based finance with traditional islamic finance. We understand Finterra is heading towards supporting community land for better value-added activities, such as tree-planting. Can you elaborate on this initiative? Yes, we have embarked on a programme working with timber-related agencies, We have embarked on a programme working with timber-related agencies, where for every US$100 donated by a person to charitable causes listed on our platform, Finterra will match it by planting a tree. It is something to be proud of and which is working well as it helps support the causes of the needy while also helping the environment.” — Satesh Khemlani where for every US$100 donated by a person to charitable causes listed on our platform, Finterra will match it by planting a tree. it is something to be proud of and which is working well as it helps support the causes of the needy while also helping the environment. What is your opinion on sustainability? How do you strike a balance between social, economy and environment in your organisation? Through our technology platform, Muslims and non-Muslims can sustainably invest in projects, benefitting society and the environment. The projects are devised to offer environmentally sustainable business opportunities to socially responsible people to invest in such projects that make an impact and support the Un SDgs. The whole initiative is to make the society to invest in projects driven for the betterment of the environment while providing them with adequate profits in the process. The creation of a win-win situation improves these people with financial income while reducing their carbon footprint and global warming.