Brick is an Indonesian fintech company that makes the process of building in-app financial services extremely simple for app developers without the need to interact with financial institutions or specialized integration service providers.
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The Rise of Sharia Fintech: From Product to Ecosystem
Indonesia is known as the country with the largest Muslim population in the world. This also means that several aspects of Islam affect the daily lives of Indonesians. One of them is the financial sector in Indonesia, which now has a sharia system. Since being introduced as a form of financial product many years ago, Islamic financial products (especially banking) have undergone many developments and have even become a separate ecosystem in the financial sector in Indonesia. Based on the Global Fintech Islamic Report 2021 report from Gateway shares, the Indonesian Islamic fintech market is around US$2.9 billion or Rp41.7 trillion (Burhan, 2021).
Sharia: From Law to Finance
Sharia comes from an Arabic word that means “the path to be followed”. Sharia is one of the principal religious laws that make up the law in Islam. Sharia is then also applied in fiqh or law in Islam. Fiqh is a rule made by humans so that the rules can be changed while sharia because of is a sacred thing to Muslims, makes it immutable.
One of the things regulated in sharia law is finance or known as sharia economics. In contrast to the western financial system which is considered capitalist, Islamic economics has several rules that assess the benefits through a “halal” process.
On the banking side, Islamic economics prohibits interest. To replace the interest system, there is a profit-sharing system that is considered more “halal”. Sharia Fintech platforms also provide common services like crowdfunding and peer-to-peer lending, with some differences from conventional lending: borrowers share investment profits and losses with their lenders, money is only invested in Halal projects, and investors are encouraged to help low-income groups.
With a Muslim user base and a growing need for Islamic financial products, now various services from sharia fintech are supported by the Indonesian Sharia Fintech Association (AFSI). AFSI was established as a congregation of startups, institutions, academics, communities, and sharia experts engaged in technology-based Islamic financial services.
The use of sharia fintech makes it easier for people to get sharia financial services, investment, and sharia financing. The implementation of Islamic economic principles in sharia fintech is able to provide benefits for the parties who transact with each other. With a clear contract, sharia fintech financing can also help people obtain financing without violating sharia principles. In the long term, the presence of sharia fintech can also provide access and education to people from various circles, especially millennials who are the main players in the financial technology market in Indonesia.
How Brick Helping in Sharia Market
As a service that is integrated not only with banking data but also data from applications that use digital money, Brick can help identify consumers who are eligible for Islamic finance. This verification API from Brick is really useful and seamless to know the user’s characteristics with e-KYC. Brick also provides alternative data such as employment data to find out whether the money obtained from borrowers is sourced from lawful matters and vice versa whether the user who is going to borrow will spend the capital on things that are in accordance with sharia or not.
Tulisan ini pernah dimuat di Brick Blog pada 17 April 2022 dengan judul yang sama.