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Islamic Finance

New UK profit-sharing SME financing platform Izdihar planning early 2021 rollout

LONDON - A new profit-sharing SME financing solution platform in the United Kingdom plans to launch in the first quarter of 2021.

Izdihar aims to solve financing challenges for small and medium-sized enterprises by offering flexible forms of Shariah-compliant funding, according to Dominic Ball, one of the platform’s co-founders and its CEO.

“Izdihar means to thrive - representing our values and ethos to help businesses grow and prosper,” said Ball. “Our products are exclusively Shariah-compliant, however we are open to both Muslims and non-Muslims seeking ethical and Shariah-compliant business financing and returns on investment.”

Traditional banks and established Islamic lenders would only be interested in significant deal ticket sizes, he explained. 

“They often compete in areas like real estate where the space is well-funded, and overlooking the commercial finance needs of SMEs which are critical to the economy.”

The company has so far been testing the product with businesses and investors offline.

It recently closed what it claims to be the UK’s first Shariah-compliant revolving credit facility for an SME. The facility, done via a murabahah structure, was for £100,000 and a profit rate of 20% per annum, with six-month repayments to investors. 

The fintech is currently in the process of getting on the Financial Conduct Authority’s (FCA) register, said Ball, adding that he hopes Izdihar will be licensed by March.

“We are currently in the process of registering with the FCA, we will be listed as an appointed representative before we launch the platform and direct authorisation later in 2021.”


Izdihar will initially operate as a peer-to-business (P2B) platform that will offer Islamic financial products including a revolving credit facility for long-term working capital funding, profit-sharing and asset financing solutions. 

The platform’s working capital facility provides businesses with a revolving credit line to purchase stock and raw materials that will help importers manage cashflow when shipping goods. 

There are existing P2B and business crowdfunding platforms in the UK but these are mostly conventional. The only standalone Islamic platform is Qardus, which launched in the summer. To Salaam Gateway’s understanding, no conventional platforms offer Shariah-compliant SME financing.

Qardus uses the commodity murabahah structure that has the bonus of already having an established existing infrastructure.

Izdihar plans to go beyond that, according to Ball.

“We aim to offer diminishing musharakah as well as murabahah facilities for working capital,” he said. “We also are looking at other structures to support asset and acquisition finance.”

Businesses that want to access financing on the platform must have a minimum trading history of two years and be profitable.

The minimum amount companies can raise is £50,000 and the maximum is £500,000, said Ball.

Izdihar will screen financials internally to ensure companies meet its criteria.

Ball said the RCF is secured by director guarantees and aims to deliver returns of 8% for six months and 16% for 12 months.


Izdihar’s revenue will come from two sources.

Firstly, it will charge businesses between 2.5 and 5% on the entire financing raised on the platform. It aims to average around 5%.

Secondly, investors will be charged an annual management fee payable out of proceeds from the profit share. The management fee is 2% and varies on the amount invested, Ball noted.

Amanah Advisors will advise on Shariah compliance.

The platform uses negative screens for prohibited business activities, and Shariah screening to exclude potential businesses that do not meet its criteria.

Ball said Izdihar has a policy of active inclusion of companies that create positive social or environmental good. A specific fund for ethical businesses aligned with ESG criteria is in the mid-term horizon for Izdihar.


Looking ahead, Ball said Izdihar will look to offer more services beyond SME financing.

“Longer term, Izdihar envisions to develop a wider portfolio of investment products and launch a robo-advisory service and bespoke portfolio management,” he said.

With regards to future funding plans, Ball said the company’s pre-seed funding round is ongoing.

“We have received initial commitments but looking to fully close the round, this will be from multiple investors.”

(Reporting by Hassan Jivraj; Editing by Emmy Abdul Alim

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