Wahed aims for 8 million customers in global expansion

Wahed

• Islamic fintech plans to expand from 10 to 50 countries in decade
• Aims to become one of the world’s largest Islamic financial institutions
• Opened first London branch and chose UK to launch gold-backed card

Islamic fintech firm Wahed is on a global growth drive with its sights set on a presence in 50 countries, from its current 10, over the next decade. 

Launched in the US in 2017 Aramco-backed Wahed serves more than 300,000 customers in the UK, US, Malaysia, Indonesia, India, Kyrgyzstan, the UAE, South Africa, Nigeria and Mauritius.  

“We did a data exercise of mapping Muslim countries around the world and have drawn up a list of 50 countries,” said Wahed founder and CEO Junaid Wahedna. 

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“In the near future, the 10 countries we operate in are more than enough as they cover around one billion Muslims. But in the long term, we think we can expand our presence,” he told AGBI.

“Our plan is for our regional hubs to expand to nearby countries. Our Nigeria hub in Africa will expand to Ethiopia, Kenya, Ghana, and so on.”

Wahed’s near-term plan will focus on consolidating its presence in the countries where it already has a licence.

Wahedna believes Wahed can sit alongside Saudi Arabia’s Alrajhi as one of the world’s largest Islamic financial institutions. 

“On average, any market we enter, we acquire one percent of the population,” he said. 

“There are roughly 800 million Muslims living in the 10 countries we have licences for. One percent of that is 8 million. We have no reason to believe we can’t achieve that over the next five years.

“That would make Wahed one of the largest Islamic financial institutions in the world by number of clients. Alrajhi currently has around 9 million customers.” 

The UAE is first up in terms of Wahed’s growth plans. The fintech has been granted in-principle approval from the Abu Dhabi Global Market to open a branch in the second quarter of this year. 

“We’re setting up shop there,” said Wahedna. “It’s now just a matter of launching a product and hiring the team – I have spent the last week there sorting all of that.”  Wahed currently has a 40-strong team in the UAE, which comprises product teams, tech teams and support staff. 

It has also submitted a licence application in Saudi Arabia, for which approval is pending. 

Wahed has also been expanding its offering in the UK with the launch of its first-ever bricks-and-mortar branch in London at the end of January. 

The launch goes against the grain of the UK bank branch retrenchment – UK banks and building societies have closed 5,469 branches since January 2015.

Wahedna, however, remains optimistic about its branch debut. 

“We see the UK as a strategic hub for us because it has a mature regulatory framework and judiciary so it allows for new and flexible products,” he said.

While Wahed is looking to cater primarily to the UK’s 3.9 million Muslim population – which constitutes the second-largest religious group in the UK – it is open to receiving customers of all faiths, he added. 

The UK was a notable outlier in the 2021 Global Islamic Finance Index, which ranked 64 Organisation of Islamic Cooperation (OIC) countries and non-OIC countries on their success in developing an Islamic fintech market and ecosystem. 

While the first nine of the top 10 were OIC, Muslim-majority countries, the 10th was the UK. Net assets of UK Islamic funds are currently valued at £600 million ($738.12 million). 

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Wahed has chosen the UK as its first location in which to launch its new gold-backed debit card. This lets users deposit funds with an exchange-traded commodity that tracks the price of gold. There are also plans to make it available in the US later this year.

Wahedna said two other products were in the pipeline this year that are “super-exciting”, but would not give further details. 

“Islamic banks have always done the same thing,” he said. “We’re coming in and saying ‘Look, there’s a whole new way to do this.

“Wahed’s team is comprised of people drawn from conventional backgrounds such as JP Morgan, Goldman Sachs, Black Rock – and we’re trying to reinvent this whole space.” 

The fintech firm currently offers a range of services including current and savings accounts, private equity, investments and wills advice. 

Wahed customers can open an account on their phone and the fintech’s target demographic is 29 years of age. Its only requirement for opening an account is a minimum deposit of £50.

In line with Sharia law, Wahed does not charge riba (interest). Rather, it charges wealth management fees as a percentage of a customer’s overall asset holdings. 

To date, Wahed has raised more than $75 million in funding from high-profile backers. These include international footballer Paul Pogba, family offices and global financial institutions.