Islamic Finance

Embedded Islamic finance: Back to the roots to reshape the future

Dr. Moutaz Abojeib is Director of Operations at IFAAS, and Dr. Shaher Abbas is the CEO of IFIN.


The fourth industrial revolution is changing the world around us at a faster pace than ever experienced before. While the COVID-19 pandemic pushed the boards of financial institutions to accelerate the digitalization agenda, the management are still struggling in their adoption and implementation. With the constantly increasing number of digital solutions and Fintechs available in the market, the decision on which solution or Fintech to go with becomes more difficult.

One of the newly emerging solutions is embedded finance. Embedded finance is defined as a seamless integration of financial services by businesses. The primary purpose of embedded finance is to streamline customer experiences by eliminating extra steps to obtain financing in which the customer can get the product and the financial service at one stop. While embedded finance is a new concept, it is indeed not a strange notion for Islamic economics. In fact, one could claim that embedded finance is a core philosophy of the Islamic economics and transactions theory.

It is well established that Islamic economics does not promote separating financing process from real economy business transactions. While interest-based conventional finance industry concentrates on making money out of lending money; hence, disconnecting the financing from real economy trading/manufacturing process, Sharia does not allow charging fees on pure lending (Qard). Shariah rather promotes risk-sharing and allows money-making out of commercial and investment transactions only. In fact, the whole modern Islamic banking industry has been designed to bring back the connection between financing and businesses by using trading and investment contracts, such as Murabaha and Mudaraba. These Islamic financial principles create a bridge between finance and business which is the core philosophy behind embedded finance. However, it is important to note here that the Islamic finance industry in practice did not succeed so far in building such bridge due to the extensive use of Tawarruq that works in reality to disconnect the Islamic finance from the real economy.

Understanding the importance of embedded finance, IFIN (the first of its kind Sharia- compliant, cloud-based Fintech solution) has been designed to be the bridge connecting all types of Islamic Financial Institutions with all types of retailers (whether in physical stores or online and whether offering goods or services) allowing customers to submit their finance applications and get them approved instantly. The whole financing process including signing the required contracts can be completed within few minutes. IFIN is a game-changing innovative solution that is geared to redefine the way Islamic finance is being done, making it more efficient and inclusive. With such digital solution, Islamic finance becomes more accessible to all segments of the community at any place and any time.

Through full digitalization, IFIN does not only help Islamic financial institutions reduce transactional cost and operational risk (as no staff intervention is required) but also helps them offer unprecedented customer experience and widen their outreach to new areas and communities that they would not be able usually to reach using their normal distribution channels.


Islamic finance
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Dr. Moutaz Abojeib and Dr. Shaher Abbas