In March, Malaysia-based Islamic fintech company du-it announced a crowdfunding campaign in collaboration with global Islamic crowdfunding platform Ethis Malaysia.

The campaign is meant to support the development of its B2B BNPL platform, which is dedicated to providing interest-free instalment solutions to businesses, particularly small and micro-sized enterprises (SMEs/MSMEs). It aims to raise a maximum total of MYR3 million (US$679,000) over the course of 90 days.

“With the funds raised through the campaign, we aim to bring our platform to more businesses in Malaysia, further develop our platform as well as expand our team across core business-growth roles, helping businesses access on-demand interest-free credit terms, and solving the pain points of today’s SMEs,” says Shafik Ali, Founder and CEO, du-it.

In an email to e27, Ali explains why the company decides to take the route of crowdfunding to support its mission.

“We have recently closed our fundraising round with several VCs and HNWIs. To further expand our core team and to scale in Malaysia we are raising via ECF, where we give the opportunity for the retail investors to join our journey at the same valuation at which our VC partners came in for,” Ali says.

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du-it for SMEs

du-it describes itself as a BNPL platform designed as a solution-based platform for SMEs and MSMEs in Malaysia, with a primary focus on their dealings with other businesses that require flexible payment options for their purchases, whether for capital expenditures (CAPEX) or operational expenditures (OPEX). The platform offers a credit limit of up to MYR50,000 (US$11,300) based on the client’s risk profiling and allows businesses to obtain approval within minutes.

According to Ali, currently, there are no similar platforms in Malaysia which apply the BNPL concept to B2B payments.

“However, if compared to other alternative SME financing platforms, we differentiate from the rest by not charging the SMEs any interest and also we offer a revolving credit which the SMEs could use as an on-demand credit line and when they need for their OPEX and CAPEX purchases.”

du-it is backed by Artem Ventures, 1337 Ventures, and individual investors from the Middle East and Malaysia.

The company implements a revenue model that works by this system: For every invoice submitted and approved via the du-it platform, it pasy the suppliers upfront minus a certain MDR (Merchant Discount Rate). Du-it then collects back from the SMEs at monthly intervals the original invoice amount via equal and interest-free instalments at the chosen duration.

Also Read: OUCH! secures funding to become a Shariah-compliant digital insurer in Malaysia

BNPL, halal version

For the uninitiated, one might wonder how a Shariah-based BNPL differs from a conventional one.

“Ultimately, a Shariah-based B2B BNPL strengthens the concept of BNPL further by not charging the SMEs who use our service any interest, which is strictly prohibited in Islam. Apart from that, in Shariah-based B2B BNPL also it is not allowed to charge unreasonable and compounding interest or charges for any late payments, which could further burden the SMEs,” Ali explains.

How does implementing this approach make a difference in how du-it is growing its business?

“First of all, the Islamic finance industry is growing rapidly and we look to capture this market with our unique offering by focusing on this niche. At launch, we would be the first Shariah-compliant B2B BNPL in the world and our future plans are to further expand into the Middle East market which has recently seen rapid growth with regards to their startup ecosystem and financial services,” Ali says.

Last but not least, the uniqueness of a Shariah-compliant fintech platform lies in its adherence to the Maqasid Shariah or the objective of Shariah.

“This can be defined as ‘the attainment of good, welfare, advantage, benefits and warding off evil, injury and loss for the people, planet and the community.’ Islamic fintech fundamentally needs to keep in mind that not only monetary growth is important, but also its business conduct must be aligned with these principles which set it apart from its conventional peers when it comes to making an impact and growing the startup,” Ali closes.

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Image Credit: du-it

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