Pakistan’s First Islamic Nano Financing by Walee Financial Services

In a significant step toward building an interest-free financial system, Walee Financial Services Pvt Ltd has launched Pakistan’s first Islamic nano-financing solution under its fintech brand, Hakeem. This pioneering product aims to provide accessible, riba-free (interest-free) financing to empower individuals, advancing Pakistan’s vision of a fully Shariah-compliant economy by 2028, as mandated by the Federal Shariat Court. At the heart of this product is the belief in ethical finance aligned with Islamic principles, promoting fairness, transparency, and inclusivity.

This launch marks a new chapter in Pakistan’s financial sector, providing a small-scale, manageable financing option in line with the ethos of “سود نہیں تجارت” (Trade, Not Usury). With this new product, Walee is catering to an underserved segment of the population by offering a pathway to financial empowerment for individuals who seek an alternative to traditional, interest-based models.

Islamic Nano Financing in Pakistan

In a country where the majority follow Islam, Islamic nano-financing is more than just an addition to the financial ecosystem; it represents a conscious shift towards aligning finance with faith and values. Nano-financing is particularly significant in Pakistan as it meets the needs of individuals who require smaller, more flexible loans but are often overlooked by traditional banks. As reported by the Islamic Financial Services Board, the global Islamic finance market is projected to reach $3.69 trillion by 2024, underscoring the growing demand for ethical financial solutions worldwide.

The introduction of Islamic nano-financing by Walee Financial Services highlights a commitment to providing a viable, ethical alternative to conventional loans. By focusing on micro-financing, Walee addresses a market segment that values an interest-free option to support personal and small business needs, ensuring that the unbanked and underbanked populations have a pathway to financial inclusion.

How Walee’s Islamic Nano Financing Works

Walee’s nano-financing model operates on the Tawarruq structure, a Shariah-compliant arrangement rooted in commodity trading. Tawarruq is a practice wherein individuals secure financing by purchasing and selling commodities without involving interest. This method, already widely accepted in the Islamic finance industry, offers a practical, faith-aligned way to access funds. Here’s how the model functions:

1. Commodity Trade: In this system, customers engage in a buying and selling process for commodities, enabling them to access funds without violating Islamic principles that prohibit interest.
2. Digital Accessibility: Walee’s digital platform, Hakeem, allows users to access nano-financing remotely, ensuring that even those in rural and underserved areas can benefit from this Shariah-compliant financing.
3. Shariah Compliance: The process is strictly monitored by a board of Shariah scholars, ensuring that every transaction is conducted in full compliance with Islamic law.

Through this unique structure, Walee Financial Services not only aligns with Islamic financial principles but also ensures that a broader segment of the population can access financial services that respect their values. This structure is particularly appealing to individuals who are cautious about engaging with conventional financing due to its reliance on interest.

Supporting Pakistan

In recent years, Pakistan has made strides toward establishing a riba-free financial ecosystem. The passage of the 26th Constitutional Amendment Bill, which mandates a complete transition to an interest-free economy by January 1, 2028, underscores the government’s commitment to aligning the financial system with Islamic principles. Walee Financial Services, through its innovative Islamic nano-financing solution, is playing a pivotal role in supporting this national agenda.

Dr. Rashid Mansoor, Head of Shariah at Walee Financial Services, highlighted the importance of adhering to religious obligations. “This achievement is a landmark for Islamic finance in Pakistan. With guidance from leading scholars and advanced technology, we’ve created a product that adheres to Shariah law and benefits society at large,” he said. His sentiments echo the core Islamic injunction against riba, or interest, which is mentioned in the Quran: “Allah has permitted trade and forbidden riba.” (Surah Al-Baqarah, 2:275).

Through its efforts, Walee is not only meeting a legal requirement but also fulfilling a societal need for fair and inclusive financial solutions. As the nation moves toward a riba-free economy, Walee’s product could serve as a model for other financial institutions looking to adopt Islamic principles in their offerings.

The Broader Impact

Islamic nano-financing is designed to address Pakistan’s growing need for financial inclusion. With over 100 million adults lacking access to formal financial services, according to the State Bank of Pakistan, there’s a clear demand for products that can reach a wider audience. Islamic nano-financing offers a solution by providing a path for unbanked and underbanked individuals to participate in the economy.

Benefits of Islamic Nano Financing:

1. Empowering Small Businesses: Nano-financing focuses on providing smaller, more manageable loans that are often neglected by traditional banks, giving small businesses and individuals the capital they need to thrive.
2. Digital Access: Walee’s use of technology through its Hakeem platform ensures that financial services reach even the most remote areas, aligning with Pakistan’s goal of expanding digital financial inclusion.
3. Islamic Values: The product’s riba-free nature allows individuals to engage with finance without compromising their religious beliefs, fostering trust and participation in the economy.

Walee’s Islamic nano-financing solution is a timely response to Pakistan’s evolving financial landscape, providing an ethical, Shariah-compliant way for individuals to access capital. This shift could stimulate economic growth at a community level, as individuals gain the resources needed to support small ventures and daily financial needs without incurring interest-bearing debt.

Related: Pakistani Islamic Microfinance Pioneer Wins Asia’s ‘Nobel Prize’

A Leader in Ethical Finance

Walee Financial Services is a part of Walee Group, a prominent media and finance company operating across the Middle East, North Africa, Pakistan, and Turkey (MENAPT) region. Walee is known for its extensive experience in high-profile projects, from managing sports leagues like the Pakistan Super League (PSL) to representing brands and corporations across various industries. With a network of seven offices in four countries and a 99.9% platform uptime, Walee is among the leading payment service providers in the region, reaching 20 million users through its social media platforms each month.

Walee has positioned itself as a key player in the Islamic finance sector, championing the cause of riba-free financial solutions. The group’s commitment to ethical finance is evident in its operations and the development of products like Islamic nano-financing, which aim to address Pakistan’s unique financial needs. By combining media influence with financial services, Walee is well-placed to promote Islamic finance and raise awareness of the benefits of a riba-free economy.

Walee Financial Services

Walee Financial Services, a subsidiary of Walee Technologies, is a licensed Non-Banking Financial Company (NBFC) with a mission to deliver innovative Shariah-compliant financial solutions. This includes the introduction of Islamic nano-financing, which is intended to provide accessible and ethical financial support to individuals and small businesses across Pakistan.

Through advanced technology and a clear focus on Shariah compliance, Walee Financial Services aims to redefine financial accessibility in Pakistan. By focusing on digital platforms and innovative financial models, the company strives to empower communities and contribute to sustainable economic development.

1. Ethical Finance: Walee Financial Services is committed to promoting a financial system that respects the religious and cultural values of Pakistan’s population.
2. Technology for Access: The Hakeem platform allows users to access nano-financing from any location, bridging the gap for those without access to traditional banks.
3. Local Communities: By focusing on small loans, Walee is enabling individuals and micro-entrepreneurs to achieve financial independence, creating a positive impact on communities.

Islamic Nano Financing

The rise of Islamic finance is not limited to Pakistan; it is a growing trend worldwide. Islamic finance has expanded by 10-12% annually over the past decade, as reported by the International Monetary Fund (IMF), with countries like Malaysia, Indonesia, and Turkey leading the way. Pakistan’s entry into Islamic nano-financing aligns with this global shift towards ethical and Shariah-compliant finance, reflecting the broader interest in alternative financing models that prioritize social equity and community welfare.

For Pakistan, Walee’s Islamic nano-financing model represents an opportunity to join this global movement, showcasing how financial inclusivity and ethical finance can go hand-in-hand. The State Bank of Pakistan’s efforts to promote Islamic finance creates a supportive environment for such products, potentially encouraging other financial institutions to explore Shariah-compliant financing options.

Pakistan’s Evolving Financial Market

Walee’s Islamic nano-financing product meets a pressing demand within Pakistan’s financial landscape. As the country’s need for accessible, Shariah-compliant financial solutions continues to grow, products like Walee’s Islamic nano-financing play a critical role in filling the gap left by conventional banks. Here’s how this product is meeting the needs of Pakistan’s market:

1. Financing for Entrepreneurs: By offering manageable, small-scale financing, Walee provides an essential resource for micro-entrepreneurs who require funding without the burden of interest.
2. Faith-Aligned Financial Solutions: Adherence to Shariah principles allows individuals to participate in the economy without compromising their beliefs, creating a stronger sense of trust in the financial system.
3. Tech-Driven Financial Inclusion: Through Hakeem, Walee ensures that even remote and underserved areas have access to Islamic nano-financing, supporting the State Bank of Pakistan’s objective of achieving greater financial inclusion.

Walee’s Vision for a Riba-Free Economy

As Pakistan moves toward its goal of a riba-free economy by 2028, Walee Financial Services is positioned to play a crucial role in this transformation. By setting a precedent with its Islamic nano-financing product, Walee not only fulfills a regulatory requirement but also paves the way for other financial institutions to adopt ethical, interest-free financing solutions.

Looking ahead, Walee’s commitment to Shariah-compliant finance could inspire further developments in the financial sector. With a focus on innovation, accessibility, and alignment with Islamic principles, Walee is set to contribute significantly to Pakistan’s financial future. For consumers, this means greater access to financial products that align with their values, allowing them to participate in an ethical financial system that promotes transparency, community welfare, and sustainable growth.

Walee Financial Services’ Islamic nano-financing product, launched under the Hakeem brand, is more than just a financial solution—it’s a transformative step towards a fairer, riba-free financial system in Pakistan. By introducing this Shariah-compliant product, Walee is addressing the needs of an underserved population while advancing the national agenda for a riba-free economy. Through digital accessibility, ethical finance, and an unwavering commitment to Shariah principles, Walee’s Islamic nano-financing product represents a promising future for financial inclusion in Pakistan.

As the country progresses towards a riba-free economy, Walee Financial Services stands as a leading example of how finance can be both accessible and aligned with cultural and religious values. This innovation not only meets the present needs of Pakistan’s diverse population but also sets the stage for a more inclusive, ethical financial future.