The Indonesia Ulema Council's (MUI) sharia division and the Financial Services Authority (OJK) are preparing a fatwa to serve as a legal basis for the operation of sharia-based financial technology (fintech) lending institutions.
The MUI’s sharia division has reviewed a number of contract agreements that will serve as a reference for sharia-based fintech transactions before the fatwa is issued, said MUI sharia division member Adiwirman Karim in Jakarta on Thursday.
"Many non-Muslims are also interested in sharia-based fintech financing. So it has a very large potential market," Adiwarman said as reported by kontan.co.id.
Following the emergence of conventional fintech lenders, people have started eyeing the potential of the sharia-based fintech industry.
Four sharia-based fintech lending companies are in the process of registering with the OJK.
The planned fatwa follows the emergence of a new sharia-based product from peer-to-peer lending company PT Investree Radhika Jaya.
Since a trial run in November 2017, Investree has disbursed Rp 2.7 billion (US$189,000) in sharia-based financing.
Investree aims to disburse this year a total of Rp 1 trillion in financing, 20 percent of which is sharia-based. (kmt/bbn)