Sharia-compliant fintech to improve inclusion

The issue of financial inclusion continues to be a prominent concern in the fintech industry, with questions arising about biases against women, the digitally illiterate, and certain religions. To delve into how fintech startups can enhance inclusivity, CNBC Africa recently engaged in a compelling conversation with Tony Missokia, the Co-founder of Laina Finance. Missokia shed light on the progress made by Laina Finance, highlighting significant partnerships at both local and regional levels. An impressive win in an insurtech hackathon propelled the company to explore new markets, ultimately selecting Rwanda to validate its business proposition. Embracing the accelerating trend of digital adoption across the continent, Laina Finance has taken strategic steps to leverage this wave. Particularly noteworthy is the approval obtained in Tanzania to offer Islamic financial products, a groundbreaking move in the digital financial services landscape. By catering to Islamic financing principles, which prohibit the charging of interest, Laina Finance is breaking barriers and extending access to a previously underserved demographic. Missokia emphasized the impact of this approach in markets like Tanzania, where a large Muslim population lacked access to compliant financial services, thus underscoring the significance of this inclusive strategy. Furthermore, the company is expanding into new verticals such as the health space, aiming to facilitate credit payments for health expenses, effectively addressing the daily needs of the base of the pyramid. In advocating for regulatory harmonization to ease cross-border operations for fintech companies, Missokia highlighted the importance of aligning regulations across different markets to facilitate expansion. He acknowledged the supportive regulatory environment in Rwanda while emphasizing the need for more streamlined processes in other jurisdictions. In the quest for inclusivity, Laina Finance has adopted several key strategies to broaden its reach. By offering Sharia-compliant financial products and steering clear of collateral requirements, the company aims to lower entry barriers and enhance inclusion for underserved populations. Leveraging alternative data to assess financial risks and designing products tailored to address specific pain points of marginalized groups, Laina Finance prioritizes market-driven innovation to drive deep inclusion. Missokia underscored the value of partnerships for fintech startups, advocating for collaboration as a catalyst for growth and sustainability in the industry. While acknowledging the challenges of fundraising, he emphasized the tangible benefits of strategic partnerships in fostering quicker effects and propelling business success. As the fintech sector navigates the complexities of financial inclusion, Laina Finance stands at the forefront of driving inclusive innovation through Sharia-compliant practices and market-focused product design.