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.