Prospects of the Islamic Fintech revolution in Africa and the role of standardised Shariah principles

Abstract

Globalisation of Islamic finance and its opportunities are more feasible than ever with the proliferation of Fintech in recent years. Reports show that Fintech growth has increased access to finance and financial services, which are instrumental to economic growth. With the world still under threat from the global pandemic COVID-19, Fintech solutions are no longer an option but a necessity. The Islamic Fintech outlook for Africa shows great prospects given the consumer reception to technological innovations by Islamic Finance Institutions (IFIs) and the introduction of policies that promote financial inclusion and a cashless economy by governments of African countries. Although IFIs are able to offer more innovative and cost-effective Islamic products and services that customers can access via mobile and online platforms, the permissibility of these products and services may vary across regions in Africa. In the absence of globally accepted shariah standards and principles, Islamic finance products and services have no uniform benchmark and cannot compete with their conventional counterpart's subject to international market standards and principles. More so, most African countries either have a non-existent or inadequate Islamic finance framework and can benefit from the development of standardised shariah principles for Africa. This chapter discusses the prospects of Islamic Fintech revolution in securing the rapid growth and deepening of the Islamic finance markets in this digital era, taking lessons from organisations like Accounting and Audit Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB) to analyse the role and challenges of devising standardised shariah standards and principles. The chapter suggests that Islamic Fintech coupled with standardised shariah standards and principles are mutually beneficial tools for Islamic finance promotion and financial inclusion in Africa and can be used to deliver shared prosperity to the continent.