Meet Yielders: the first Islamic digital leader to get FCA accreditation
London has long been a diverse melting pot of culture. Now, that diversity is starting to spread into the capital’s digital finance.
Yielders has this week become the UK’s first Islamic digital finance firm to be fully accredited by the UK’s regulator, the FCA.
And founder Ifran Khan is on a mission to put Muslim finance on the map.
What is Yielders?
The digital platform, founded in 2015, offers Sharia-compliant opportunities to invest in residential and commercial properties. Individuals can invest as little as £100.
Khan hopes to meet the needs of Britain’s 3m Muslims, while dispelling any myths that traditional Islamic finance is uncompetitive.
“British Muslims are probably the most under-served community for financial services,” said Khan, a chartered management accountant.
“This shows our commitment to a long term strategy in providing an honest, competitive and inclusive opportunity for ethical and Islamic crowdfunding.”
What makes Yielders Sharia-compliant?
The Sharia compliance is built on three fundamental principles, Khan told The Memo this morning: the principles of avoiding interest, avoiding uncertainty, and avoiding gambling.
Yielders does this by avoiding taking on unnecessary and risky debt. First it uses a pool of high net worth investors to crowdfund the initial properties (a bit like SyndicateRoom and Seedrs put together). These properties are purchased 100% in cash.
Then, once the property has been acquired and regular rent is coming it, members of the crowd are invited to invest.
“Both parties in the transactions are aware of what it is they are getting themselves involved in, there are no unnecessary excessive upsides or unnecessary excessive downsides,” Khan explains.
“The higher net worth does not charge any interest, they are getting an income from the asset. The lower level gets rental income — if the rental goes up, they get an increase in rental income, if it goes down, it decreases. Likewise they get a share of any of the property asset appreciation if the asset goes up in value, it’s entirely linked to the asset with no relevance to interest at all.”
Yielders has also worked with the Islamic Finance Council to be accredited as Sharia-compliant.
“We had to transfer all of the language, processes and the contract terminology and present that to a Sheikh to understand and make a ruling,” Khan explains.
There are fewer cities where it is harder to get on the property ladder as London, and if Yielders can help people get started without the burden of a mortgage, that’s got to be a good thing.
For Khan, Yielders is also an opportunity for Britain to engage with the positive ethics of Islam.
“Sometimes, certain islamic terminology gets a bad press,” he explains.
“Yielders is an example for people to see the clear link between the ethicacy of Islamic principles, and how it looks after both parties, rather than it being a one-sided transaction.”
“The more we can have these positive messages in the press the better.”
The founder isn’t stopping at investments either, with hopes to expand Yielders to create an Islamic ethical borrowing solution, and eventually, a full current account.
We know that diversity breeds bright ideas.
Let’s hope London continues to embrace the bold, new and different.
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