rewrite this title Finovate Global: Innovations and Opportunities in Islamic Finance – Finovate

Finovate Global is back! This week’s edition leads off with stories about financial institutions around the world that are seeking to better serve their customers by offering a broader range of Shariah-compliant solutions.

Gatehouse Bank partners with ColCap UK for Shariah-compliant home financing

A new partnership between Gatehouse Bank and ColCap UK will help bring Shariah-compliant home finance to more U.K. prospective homebuyers. The partnership includes a forward flow arrangement to originate more than £550 million in Shariah-compliant home financing for ColCap UK over an initial two-year period.

Gatehouse Bank noted that it will continue to generate its own originations onto its balance sheet via its own home financing offering.

“We have seen a considerable increase in demand for our products and services over the last five years and this agreement highlights the bank’s credibility as a leading Islamic finance provider in the U.K.” Gatehouse Bank CEO Charles Haresnape said.

Founded in 2007, Gatehouse Bank is a Shariah-compliant bank that provides savings products and financing for commercial and residential real estate in the U.K. The bank offers personal and commercial deposits that ensure Shariah-compliance, for example, by providing an expected profit rate (EPR) rather than an interest rate. The accounts are invested in Shariah-compliant investments and accountholders receive a share of the profits as a return on their accounts.

Additionally, Gatehouse Bank offers home financing via what is often referred to as an “Islamic Mortgage,” in which homebuyers purchase the property jointly with the bank, and is ownership transferred to the buyer after all payments are made at the end of the term. The bank also provides Shariah-compliant Buy-to-Let purchase plans and has launched multiple Private Rented Sector (PRS) investments since 2014.

“This forward flow arrangement positions us to meet the growing demand for Sharia-compliant financing,” ColCap UK’s Executive Director and COO Esther Morley said. “Combining Gatehouse’s and ColCap’s expertise, we’re confident this collaboration will deliver significant value and reinforce ColCap UK’s leadership in ethical finance.”

A subsidiary of ColCap Financial Group, a residential home finance specialist based in Australia, ColCap has offered residential property financing in the U.K. since 2022.

Offa acquires Bank of Ireland’s Alburaq Sharia-compliant home finance portfolio

A major acquisition by U.K. Islamic proptech Offa will give customers a wider range of Shariah-compliant property financing solutions. Birmingham-based Offa has acquired Bank of Ireland’s Alburaq portfolio, valued at $21.6 million (£17 million). This gives the fintech one of the oldest Shariah-compliant home financing products ever launched in the U.K., which include more than 350 home purchase plans.

“It is a testament to Offa’s abilities that Bank of Ireland has agreed to sell their Islamic home finance portfolio to us,” Offa Chief Financial Officer Amir Firdaus said. “This marks another chapter in Offa’s ambitious growth plans. Members of the Offa executive team are already very much familiar with Alburaq’s clients, having helped distribute this book almost two decades ago, and we are delighted that these customers are now coming home to us.”

Offa’s acquisition will revive a product that has not been available to new customers since 2009. Alburaq was launched as the U.K.’s first Shariah-compliant structured deposit solution in 2008 via a partnership between Bank of Ireland and Arab Banking Corporation’s U.K. division. This week, a spokesperson for Bank of Ireland reported that “the sale of the small remaining portfolio will provide customers with access to a wider range of Sharia-compliant property re-financing options.”

Founded in 2019, Offa calls itself as the first financial institution in the U.K. to acquire an Islamic home-finance book. The U.K.’s first Shariah-compliant bridging lender, Offa introduced its Buy-to-Let (BTL) offering this summer and, back in February, announced a partnership to use finova’s Apprivo origination platform to power its Shariah-compliant digital lending solution.

Premier Bank and Mastercard launch Shariah-compliant cards in Kenya

Proptech and mortgagetech are not the only fields where Shariah-compliant fintech innovation is growing. A newly announced partnership between Kenya-based Islamic financial institution Premier Bank and Mastercard will provide a suite of Shariah-compliant debit, credit, and prepaid cards

The suite will offer features such as contactless payments and global acceptance. Cardholders will be able to make safe and convenient online payments, transact at brick-and-mortar stores, and withdraw cash from Premier Bank ATMs across the country. The suite also provides benefits including Lounge Access through the World Elite Card, travel insurance, and localized offers such as dining discounts via Uber Eats and travel discounts with major airlines.

“The introduction of Shariah-compliant Premier Mastercard suite is not merely a product launch. It is a strategic initiative that exemplifies our commitment to enabling communities with secure, convenient, and tailored financial services,” Mastercard SVP and County Manager for East Africa and Indian Ocean Islands Shehryar Ali said. “As Kenya continues to embrace digital transformation, this initiative will play a pivotal role in shaping a more inclusive financial landscape that caters to the evolving needs of individuals and businesses across the country.”

Launched in 2023, Premier Bank was born via the acquisition of the majority shares in First Community Bank, which was founded in 2007. Headquartered in Nairobi, the bank has assets of more than $23 billion as reported in the 2023 Central Bank of Kenya’s Bank Supervision Annual Report. The financial institution opened its 22nd branch earlier this year.

Here is our look at fintech innovation around the world.

Central and Eastern Europe

Polish identity verification platform Authologic raised $8.2 million to fight AI-powered fraud.

The central bank of Latvia to offer fast track pre-approval for MiCA compliance.

German fintech 21X secured approval for its blockchain-based tokenization platform.

Middle East and Northern Africa

Crypto.com launched its Mastercard-powered card in Bahrain as part of its expansion in the Gulf region.

Backbase inked a distribution and integration deal with Morocco-based consultancy and AI solutions integrator Seven.

Israel-based fintech unicorn Capitolis acquired U.K.-based financial firm Capitalab for $46 million.

Central and Southern Asia

Kazakhstan-based banking and fintech company Kaspi.kz acquired a majority stake in Turkish e-commerce technology platform, Hepsiburada.

Central Asian digital banking ecosystem TBC Uzbekistan launched its own payment processing center.

Nepalese fintech Fonepay partnered with U.K.-based Compass Plus Technologies to offer the country’s first virtual credit card.

Latin America and the Caribbean

Spanish banking group Santander introduced its digital Openbank in Mexico.

Mastercard teamed up with Brazilian events platform Sympla and Latin American payments orchestrator Yuno to bring its Payment Passkey Service to the region.

Nuvei launched blockchain-based payments in Latin America.

Asia-Pacific

Payments company Tyro launched its embedded payments solution that makes it easier for businesses to accept tap-to-pay payments.

Filipino-based fintech Starpay teamed up with distributed database solutions provider OceanBase.

Financial servcies platform Atome forged a payment checkout partnership with Valiram in Singapore and Malaysia.

Sub-Saharan Africa

Kenya-based Islamic financial institution Premier Bank unveiled a suite of Shariah compliance payments solutions courtesy of a partnership with Mastercard.

CNBC Africa profiled Rwanda’s Kigali International Finance Centre and its new fintech strategy.

Visa announced investment in four African fintechs — Oze, Workpay, OkHi, and ORDA — that graduated from its Africa Fintech Accelerator program.

Photo by Abdullah Ghatasheh

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