With 25% of the world’s population of Muslims residing in Southeast Asia, large majorities of Indonesia’s and Malaysia’s population identify as Muslim, at 87% and 66% respectively. According to statistics, Islamic financial assets are likely to reach an estimated worth of $3.9 trillion USD by 2023. With Islamic fintech on the rise, it appears these startups will increasingly become a key contributor to this net worth. 

In light of the more central role Islamic fintech startups in Southeast Asia appear destined to take, this article will give you insight into what Islamic finance is, and the current scene in the region.

man standing near white mosque

What is Islamic finance?

Relatively young, Islamic finance first appeared in the twentieth century, but in this short time span, it has managed to evolve into a multi-trillion dollar industry, a signifier for its growing future dominance. 

What makes Islamic finance unique is that it must comply with the Islamic laws, Sharia––some of which seem at odds with traditional financial practices. Therefore, Islamic finance adheres to certain unique principles: 


Charging interest on loans is considered as exploitative, with all interest considered as usury, or riba. To mitigate this, they reconfigure mortgages so you purchase your property back from the financial firm in instalments, which ultimately equates to more than the initial property price. Instead of interest gained through banking and savings accounts, you earn a share of the bank’s profit, and to pay back a loan you give the lending company an extra share of your profits. Furthermore, each party, i.e. the lender and borrower of the loan, must benefit equally. 

Halal businesses

All businesses or purchases must be Halal. If it engages with activities or products which are not sanctioned by Sharia, it is considered haram, and investing in such a venture is prohibited.

Gambling, uncertainty and risk

It’s not uncommon to hear about financial risk-takers, particularly in the cryptocurrency space. However, this ethos is at odds with Islamic finance, which requires that investments only be made when their future is assured. 

A culture of community investment

Although there may appear many reasons not to give or lend money in Islam, in fact there is a strong culture of giving to projects that benefit the community, and are Sharia-compliant.

It is possible to receive Sharia compliance certification, proving your business operates in line with the law. Currently, 76% of Islamic fintechs are certified, seeking certification, or planning to obtain certification. This does not necessarily mean that other Islamic fintech startups are not Sharia-compliant; they just may not feel the need to be certified by a particular body.

The rise of Islamic fintech in Southeast Asia

Halal and Sharia-compliant startups are a growing part of Indonesia’s tech ecosystem, and given the majority Muslim population, it is unsurprising that there is a vast number of Islamic fintech startups in the archipelago. 

Dubbed as ‘Sharia-fintech’ in Indonesia, it accounted for $73.15 million USD in sharia-compliant loans last year, four times that of 2018. In fact, Indonesian Islamic fintech dominates the world over, with 31 out of 93 startups concentrated there. The US follows with 12 startups, and the fifth is Malaysia with seven. A report published at the end of 2019 forecast that ASEAN countries have the highest growth potential for Islamic fintech in 2020. 

Although Indonesia, then Malaysia, are undoubtedly Islamic fintech key players, Singapore is making itself more attractive to the Islamic business world. It launched the FTSE SGX Shariah Index Series, to assess the performance of sharia-compliant companies in the Asia Pacified region, followed by a halal hub to target halal food businesses in the area.

Who, then, are some of the current major Islamic fintech startups players in the region? 

Four key Islamic fintech startups in Southeast Asia


Alami is an award-winning Indonesian peer-to-peer (P2P) financing platform for small and medium businesses (SMEs), established in 2017, and last year had two successful rounds of seed funding for undisclosed amounts. 


Having offices in Indonesia, Malaysia and Dubai, Ethis is helping Muslims in the ASEAN region get on the property ladder as the first-ever Islamic crowdfunding platform for property. It works by matching investors to property development projects, and, in line with Sharia laws, it prides itself on favouring social impact projects, and helping to create affordable housing within Indonesia. 


As part of Indonesia’s Unicorn business GoJek, GoPay is an e-money app that allows you to make payments using QR codes, pay bills, and make quick and easy transfers to other Go-Jek users. It has gained credibility in the Muslim community by partnering with the Indonesian Mosque Council to digitise Islam’s mandatory almsgiving, zakat


LinkAja, a state-owned e-money app, a competitor to Go-Pay, has announced the launch of LinkAja Sharia, intending to capitalise on the Muslim market. 

Islamic fintech is becoming a key feature of Indonesia’s startup scene, and have shown how Sharia finance practices can benefit from entering the tech ecosystem. Expect to see more Islamic fintech startups in Southeast Asia in the very near future.