Friday, April 22, 2022

Challenges for Islamic Fintech Firms

Islamic fintech firms started to flourish in Indonesia. Today, I checked the website of the Islamic fintech association, and there are 39 members registered there (source: In addition to researching Islamic fintech, I personally attempted to be a part of this new movement by investing some money in one of the Islamic fintech P2P firms. My primary motivation was not to earn a return; instead, I just needed to figure out how they operate and serve the customers. Here in this writing, I will share a bit of my experience and viewpoint about Islamic fintech firms. This writing might possess my subjective opinion. I am not going to mention the company's name anyway.

In March 2021, I invested some money in an Islamic fintech firm to fund a project using musyarakah contract. The advertisement for the project was excellent, attracting me to take part and surely other investors. I saw many projects on that website were easily to get funded. The required findings were quickly funded by the investors. It was a good sign, wasn't it? The project I was involved in was expected to last for 6 months. I thought that my cash would recover at the end of September 2021. However, the project seemed to face problems. The company obtaining the fund didn't finish its project on time. Thus, this firm hadn't payback the fund to the Islamic fintech firm distributing investors' cash. Now is April 2022, and the investors' money has not been paid. So, it has been more than a year. 

From this experience that I have, I believe the first challenge that Islamic fintech firms face is related to the repayment of investors' money. Although the contract was musyarakah, in which investors also bear the risks that might appear, some measures must be taken to safeguard investors' money. Islamic banks seem to have a better approach in this regard. Thus, Islamic fintech firms may need to learn from Islamic banks to operate better, primarily in repaying the investors. The second challenge that I predict is related to the diversification of investors. Since each project is quickly funded, I doubt that the money comes from individual investors (the real peer-to-peer lending mechanism). A large portion of individual investors would be better, showing the inclusiveness of these Islamic fintech firms. I assume that the most money pouring projects in Islamic fintech platforms comes from large institutional investors, perhaps banking and the like. Thus, the inclusiveness of these Islamic fintech firms is still questionable. However, I cannot support this argument since no data is available regarding the investor portion. Arguably, some empirical research can be done to explore this issue.


Monday, May 10, 2021

Mendeley Workshop 10 May 2021

Many thanks to all participants who have joined the Mendeley Workshop, held on May 10, 2021.

Special thanks to the kindhearted participants who have made donations for the social causes through this event. The followings are transfer record and receipt from LAZISSU (, a charity-fund management organization in South Bandung which will distribute the collected fund for orphans in Cangkuang Wetan, Dayeuhkolot, Bandung.


The recorded video can be accessed via the following Google Drive link:  


 Here are some screenshots of the event: 

Here is the link to slides that we used: 


Here is one of the videos on how to use get SCOPUS API Key for Publish or Perish Software: 


Thank you.


Thursday, March 11, 2021

Investing in Fintech

There are various instruments where we can put our money in. Some people prefer to save their money at the banks while some prefer to invest their funds in stocks. Either way is just okay. However, as the technology advances, we presently have a new way of investing our money. We can now buy bitcoin or other digital investment opportunities. 

I personally just tried buying a contract at a financial technology firm, called Ethis. This is an Islamic financial technology company based in Singapore offering both funding and investment opportunities. If your company needs financing, you may apply to this firm. Go to their website ( any try. 

My motivation of trying to invest in fintech firm, in addition to getting some returns, is to know their business model. Now, I know how to be the investor at fintech firm. Frankly, it is not hard but it's quite procedural. First, I had to register in their website by filling the form and uploading ID card and so on. Then, they would verify my identity. Having obtained verification, I could then select any project to invest in. The project ranges from commercial property and business offices or buildings. As Ethis follows Islamic rule, so the projects are surely sharia compliant.

After selecting a project and mentioning the amount of money we are willing to pour in, they prepared some documents for me to be read and signed. They use digital signature mechanism and this is quite plus point anyway. This process took 2-3 days, if I am not mistaken.

It didn't take long time for me to read and sign the documents (contracts). Having signed them all, I had to wait some time for getting the bank virtual account where I would transfer my money. Since I selected BNI bank when registering, they emailed me the BNI virtual account so I didn't have to pay for the administration fee.

Well, what is the impression of investing in fintech? To me, it is quite a bit challenging since the process took quite some time and different from buying stocks. Maybe I will feel more comfortable if I invest for the second or third time. I may also consider investing at other fintech firms because there many companies that we can choose from the list of OJK (financial service authority)

So, how about you, do you have any desire to start investing in fintech firm?  

Monday, August 26, 2019

Fintech lending for education

In this 4.0 industrial era, one of the innovation results in finance is easiness in getting a loan. Presently, debt is inclusively offered to everyone, both the affluent and the needy ones, including college students. In May 2019, there were 113 fintech lending firms registered in Financial Service Authority (OJK) of Indonesia, and some of them are targeting college students as their customers. These fintech firms understand that the huge number of college students is promising, and fulling their needs can result in ample revenues. Several fintech firms explicitly targeting college students are,,,, and These firms operate conventionally, in a sense that they charge interest to the borrowers. While Islamic fintech frim such as charges no interest, in fact it employs Islamic contract, i.e., murabaha contract.
Having a loan is basically ‘normal’ because sometimes we, no matter what our profession is, need cash to cover a particular need. In the US, university students can take a student loan for paying their tuitions and then pay it back after graduating and getting a job. This mechanism is helpful as those who do not have sufficient fund can actually go to college. On the other hand, people may have a loan from the early stage of their lives; being college students with debt. However, this approach is currently less prevalent in Indonesia as the government has not granted the permit to any commercial bank to provide students loan as in the US. In fact, some fintech lending firms as outlined in the previous paragraph, have taken an early action by giving credit to college students in Indonesia.
Some fintech firms in Indonesia provide a small amount of money in a relatively short duration. Besides, to be used for paying tuition, the money from the fintech firms can also be used by students for purchasing things needed for the study, such as laptop, cellular phone, shoes, and other study equipment. Again, this solution might be helpful because not every student in Indonesia has money to make a pretty big purchase such as low-to-mid range laptop with price ranging from three to five million rupiahs. For the students to make a wiser decision, they need to at least consider the following things.
First, before getting a loan, they need to know how to pay it later. The students should identify the sources of income which will be used to repay the loan. In addition to relying on a monthly or weekly allowance from their parents, the students are also encouraged to work part-time to earn more income. There are actually a lot of ways which can be done by the students to make more money, one of them is by being the research assistant of the lecturers who usually have a research project in a semester basis. Lecturers need students to be surveyors or enumerators, and this is indeed a worthy paid-job for college students.
Second, college students should increase their financial literacy so they can decide any financial transaction wisely. At least, they should be familiar with how to calculate interest rates or margin charged by the lenders. In short, they should know which one is cheaper and which one is more expensive in terms of cost of fund that they will pay. Knowing the difference between nominal interest rate and effective interest rate is a must because fintech firms usually display interest rate on a monthly basis. The shown (nominal) interest rate is definitely not informative because the borrowers pay back the loan in a longer duration of more than one month. Thus, the students should know how to calculate effective annual rate. In the case of Islamic fintech, the payment is fixed from the beginning until the end because the contract is a buy-and-sell contract where the borrowers pay the loan in installment.  
Third, college students should purchase only the essential things. For instance, if someone is currently in need of a laptop but cannot afford it, then he may go for a loan. Having a loan must not be a habit as it may be a lifestyle in the years to come when he has gotten a job. Finally, being able to differentiate wants and needs is a fundamental skill so the decision to make a purchase, regardless by cash or by getting loan, will be appropriate with the financial condition and stage of life.