Islamic Research and Training Institute partners with Samsung-backed Blocko’s E24P to launch blockchain-based Smart Credit Management Platform to boost Islamic finance sector

Jeddah, Kingdom of Saudi Arabia, 14 June 2020 — The Islamic Research and Training Institute (IRTI) of the Islamic Development Bank (IsDB) Group has partnered with the Samsung-backed blockchain technology firm Blocko to build a blockchain-based innovative credit enhancement system. The patented Smart Credit Management System minimizes the risks associated with credit financing to businesses and consumers through the use of new economic incentive models and advanced implementations of hybrid blockchain technology.

The Smart Credit Management System will be based on smart contracts on the Aergo blockchain. The system, once completed, will be of great value to Islamic banks and other financial institutions. The system aims to:

• Ensure that credit assessments are performed in a provably transparent and responsible manner, whilst keeping the data and methodology used appropriately secure and confidential based on zero-knowledge proofs.
• Allow creditors to reduce credit default rate to improve overall business performance and accelerate efforts in areas of financial inclusion.
• Integrate siloed functions in the financing process including credit reporting, credit rating, credit history, and credit insurance to reduce costs and improve efficiency.
• Act as an extensible architecture that can allow multiple banks to collaborate on a consortium network to manage credit and insurance in a decentralized, autonomous, and strictly-governed way.

“The Islamic finance market is growing rapidly, with projections of a rise from around $2 trillion to an impressive $3.78 trillion by 2022. Yet certain technical and economic challenges have prevented the industry from truly flourishing,” said Dr. Sami Al-Suwailem, Acting Director General of IRTI, on the new partnership. “Our new partnership with E24P aims to address this need by providing the infrastructure needed for the Islamic financial industry to deliver critical services to both the developed and developing world.”