The UAE follows Malaysia and the United Kingdom in terms of the number of Islamic fintech start-ups per market, according to analysis conducted by Edmond Christou, Bloomberg Intelligence.
Published in light of the UAE’s Innovation Month, the analysis finds that tailored regulation and clarity on rules could aid the small and medium-sized fintech outlook. Crowdfunding and peer-to-peer (P2P) financing could be a game-changer in Islamic finance, giving wider reach and potential to close the gap for SMEs, which generated about 60 per cent of UAE GDP in 2014, with Dubai’s regulator introducing the first tailored regulation for crowdfunding in the GCC.
Christou’s analysis highlights that new opportunities to invest in gold, integrated by Islamic fintech blockchain technology, may revive its appeal and lift demand. Consumer demand for the metal in UAE and Saudi Arabia fell by five per cent 2017 compared to 2016, to 104 metric tonnes, according to Bloomberg Intelligence. Development of Shari'ah-complaint, gold-backed products following the introduction of the Shari'ah Gold Standard may encourage investors to place their money in gold, seeing it as a safe-haven metal, as the Islamic Financial Services Board predicts that Shari'ah-complaint assets will expand by 261 per cent compared to 2015, to represent $6.5 trillion by 2020.
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