“One of the sectors that we have invested in and are tracking closely is the broad Islamic digital economy, which encompasses everything that we have in the ‘general’ digital economy but with an adherence to Islamic principles.”
(Quest Ventures’ James) Tan is specifically interested in how these rules apply to lending.
According to a 2017 report from IMF, there is a funding gap of USD 80 billion for small and medium enterprises in Indonesia. While SMEs make up more than 95% of the number of businesses in Indonesia, less than 15% of them have access to bank financing. This lack of access is often the result of a lack of fixed asset as collateral, a lack of operating history, poor operational efficiency, or poor financial reporting.
With the entry of multiple international players in P2P financing and rampant unethical business practices, Tan says, “A deeper adherence to Islamic principles will be helpful in weeding out unsavoury players in the world’s largest moderate Islamic market.” More