بسم الله الرحمن الرحيم

28 Shawwal 1444/19 May 2023

Living in the 21^st century where the development of technology and Fintech is overwhelming, we notice that there is a lack of Shariah alternatives. One of the main reasons for this is the reluctance of scholars to explore and understand this great development which left the Muslim world behind. It was a matter of time before many scholars took to the forefront to understand these significant developments and many came to an understanding that there is a possibility and opportunity for these products to be modified and ensure Shariah compliance. This in turn creates Shariah compliant alternatives for those Muslims interested in these great development which could potentially save them from engaging in Riba.

As we look at Fintech today, we notice there is a lot of potential for Fintech projects to make a difference in poor countries. Many people may be aware of financing platforms such as Crowdfunding which makes it is possible for individuals and small businesses of any sector to get funding for their social impact projects in which we find a lot of these projects in poor countries, for example: LaunchGood and Skola Fund. (Adam, 2020) This is just a small example of how Fintech has been used to make a difference in small countries.

However there are other Fintech opportunities and projects that can be implemented in small countries to make a huge difference. One very interesting project that can be used to develop poor countries is the creation and development of Non-Fungible Tokens (NFTs). NFT’s are a record on a cryptocurrency’s blockchain that represents a piece of digital media. Non-fungible means that it is a unique digital piece and that it cannot be replaced with something else and they are developed in a similar manner to ICOs (Initial Coin Offerings). (Belleghem, 2021)

There are many ways one can use an NFT to develop a country, however there is one particular project in mind that I would like to mention and that is developing a Customer Loyalty NFT. This can be done with new businesses or established businesses. An example: A farmer has been harvesting crops for many years and is looking to increase profitability and expand. The farmer should identify his main clients, thereafter he should develop a Customer Loyalty NFT for his top clients and offer it to them. This will basically serve as a type of share in the business and as the business grows, the value of the NFT grows and profitability grows as well. Within time, if one of the clients decide they want to sell the NFT, it can be sold to another and the farmer will profit from the sale of the NFT. Another way to make use of NFTs is to identify certain unique products that are only found in a specific location and develop a NFT for that product. Every time that particular product gets sold the owner stands to profit.

 This is just one of the Fintech projects that can be used to develop poor countries. There are many other options and alternatives. Personally I prefer the use of NFT instead of crowdfunding, yes crowdfunding is very helpful and beneficial but through this we allow people to grow. We all are aware of the saying : “Give a man a fish and he eats for a day, teach a man how to fish and he eats for a lifetime” and this is very important in today’s day and age. It is important for us to note and understand that even NFT’s have a criteria for Shariah Compliance. In future articles we will explore and break down NFT’s for further clarification understanding.

May Allah accept our efforts from us and grant us understanding !

References

Adam, F. (2020). Introduction to Islamic Fintech. Amanah Advisors Press.

Belleghem, S. V. (2021, November 26). How NFTs could change customer loyalty completely. Steven van Belleghem. https://www.stevenvanbelleghem.com/blog/how-nfts-could-change-customer-loyalty-completely/