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The Securities Commission Malaysia revealed updated regulations as well as the approval of 8 new "Regulated Market Operators" serving the investment crowdfunding market. Best known for its impact investing in Indonesia, Ethis Ventures launched last year its Global Sadaqah platform and expects to launch its new Ethis Equity platform in Malaysia in Q1 2020. Ethis Group Chief Investment Advisor Maritz Mansor said they are very excited to have this chance to open up a new asset class to all levels and types of investors. Umar Munshi, Managing Director of Ethis Ventures, said SMEs and startups in Malaysia had few avenues for raising funds. He added that the Shariah-compliant alternative was missing and Ethis Equity aims to fill the gap. In Ethis Equity the minimum investment will be low which means that ordinary people can invest alongside professional investors.

In this interview Umar Munshi, the founder and CEO of Ethis Ventures talks about the Islamic crowdfunding sector. Ethis Ventures is a pioneer in the sector centred in Southeast Asia, in Singapore, as well as in Malaysia and Indonesia. Ethis Ventures is behind Ethis Crowd, the first Islamic real estate crowdfunding platform that raises funds for social housing development projects in Indonesia. Ethis is also behind Kapital Boost, which crowdfunds financing for small and medium-sized enterprises. The company’s latest project is a charity-based crowdfunding platform called GlobalSadaqah. It aims to match high-impact charity campaigns to donors who give either zakat or sadaqah.

Bank Islam Malaysia has recently launched its social finance initiative, Sadaqa House. It aims to provide products and services to collect sadaqah, waqf and hibah. The public can contribute to realising social finance projects for sectors such as healthcare, education and entrepreneurship through the bank’s digital crowdfunding partnership with Ethis Ventures and GlobalSadaqa.com. Bank Islam CEO Khairul Kamarudin said the bank was utilising technology in its Shariah solutions to deliver a service that is aligned with the current digital trend. Also, contributors can ensure the funds contributed are being channelled accordingly and track the progress of the chosen project. Ethis Ventures founder Umar Munshi said the platform was not limited to Muslims and Malaysians. Any amount of money can be donated by the public into the Sadaqa House fund account, while Bank Islam will match the raised fund at the rate of 1:1 to a maximum of RM500,000.

For many years, the global Islamic finance has been seen as a laggard in digital innovation, but now Islamic finance players are catching up with their conventional peers. According to Zeeshan Uppal, co-founder of crowdfunding company Yielders, fintech has opened up opportunities for Islamic finance to catch up because it allows scalability, which is in line with shariah law. Ibrahim Mohammed, the founder of OneGram, says that blockchain technology can create digital banks or P2P lending platforms that adhere to Islamic principles, and many other asset classes can be made shariah-compliant. Umar Munshi, founder of EthisCrowd, finds the slow innovation in Islamic finance perplexing as there is an urgent need for financial inclusivity. He expects to see more players in the takafultech, crowdfunding and P2P financing, payment and remittance, and smart contract space next year. According to EY’s Banking in Emerging Markets GCC FinTech Play 2017 report, Fintech can propel Islamic banks into the mainstream space in 20 promising markets by 2021, up from five markets today, and effectively add 150 million new Islamic banking customers.

EthisCrowd.com, a Shariah compliant crowdfunding platform, is looking to raise up to S$1 million ($740,000) for a real estate crowdfunding initiative from senior executives and delegates present at the Global Islamic Finance Forum 5.0 in Kuala Lumpur next month. The funds will be raised for the Depok Dream Village in Jakarta. Founder Umar Munshi said he expects the projected returns to be 48 to 55 per cent over three to 3.5 years from a share of the development profits.