Being part of the sharia market in Indonesia might be an advantage for some sharia-financing products and fintech platforms. With the rise of awareness for sharia products & services and the growth of the Islamic finance industry, the sharia-based platforms have an enormous opportunity to seize Indonesia’s market.
Indonesia is home to the largest Muslim population globally, with more than 230 million Muslim population. However, according to a Deloitte report in 2019, Indonesia’s sharia economy market was lagging behind other OIC countries in terms of Sukuk (sharia-compliant bonds), outstanding and Islamic funds asset under management (AUM).
However, the government does not want a standstill to boost the sharia market with several efforts, including the ongoing implementation of the Islamic Economic Masterplan 2019-2024, increasing Islamic finance literacy, and Islamic-related events hosted. Indonesia was ranked second as the country with the most developed Islamic finance industry in the ICD-Refinitiv Islamic Finance Development Report 2020.
Islamic finance is also an alternative for Indonesia to close its financial gap. According to The World Bank and International Finance Corporation (IFC), in 2019, the credit gap for Micro Small Medium Enterprises (MSMEs) in Indonesia reached US$ 165 billion (or 19% of gross domestic product), while the current availability is only US$ 57 billion. These challenges become the opportunity for sharia-fintech platforms like ALAMI to seize Indonesia’s Islamic finance market.
Source: East Ventures