Islamic Fintech Startup Manzil Seeks Funds Via Crowdfunding

Manzil, a Toronto-based Islamic FinTech startup that offers shariah-compliant financial solutions for mortgage purposes, is offering the public a chance to own a share of the company through a private placement on the crowdfunding platform FrontFundr. Manzil says it has created financial products designed to be participatory, rather than predatory.

The startup said the opening up investment is meant to offer the public a chance to own a piece of Manzil, which calls itself “Canada’s first neo bank offering halal-certified products.” Founded in 2017, Manzil was created to help Canadian Muslims meet their financial needs for owning houses in a shariah-compliant manner.

Manzil claims Canadian Muslims have a spending power of 20 billion dollars, yet have low participation in homeownership. The startup said the reason for the low homeownership phenomenon might be due to the lack of shariah-compliant financial instruments available in the country.

“For far too long, Canadian Muslims have not been able to access financial products that comply with their faith,” said Mohamad Sawwaf, Manzil’s CEO and co-founder. “This demographic has the lowest participation of homeownership and capital markets and it’s not because of their balance sheets; it’s due to a lack of suitable financial products in the marketplace.”

To solve this all-important issue, Manzil has created “shariah-compliant” financial products, which it said are designed to be participatory, rather than predatory. In conventional mortgages, for example, consumers enter into a loan agreement whereby they pay back the lender the money they borrowed plus interest over a defined term.

“Here, the lender is not purchasing the property, but is simply making money by lending you money,” the startup said. “This is called usury or riba in Islam and it is not permissible and heavily frowned upon by the Muslim community at large. Islam teaches that risk has to be shared and that money cannot be made on money.”

Manzil’s financial products and services are built on the principle of sharing the risk equitably among the parties, not charging interest, and not investing in industries deemed “sinful” such as alcohol, gambling, and weapons.

In addition to home financing, Manzil also offers a mortgage income fund that is used to invest in halal mortgages and share the profits from financing payments with its investors. Although products are designed for the Muslim market, Manzil’s products are available to all consumers in Canada.

“The Canadian Islamic finance scene has experienced growing interest from domestic and international investors,” said Peter-Paul Van Hoeken, founder and CEO of FrontFundr. “We are delighted to have Manzil on FrontFundr, providing all Canadians the opportunity to invest in a fast-growing private company dedicated to delivering innovative Islamic finance products.”

FrontFundr’s platform allows investors to commit funds to early-stage and growing private companies. Earlier this year, the company received approval from the Ontario Securities Commission to make its services available to investors and companies in Ontario. To date, the company has helped more than 43 companies raise over $35 million.

Originally published on www.betakit.com