Manzil, a Toronto-based FinTech startup that offers halal financial solutions including mortgages, is offering the public a chance to invest in the company through a private placement on crowdfunding platform FrontFundr.
Manzil says it has created financial products designed to be participatory, rather than predatory.
The startup said opening up investment is meant to offer the public a chance to own a piece of Manzil, which calls itself “Canada’s first neo bank offering halal-certified products.” Founded in 2017, Manzil was created to help Canadian Muslims balance their financial needs with their ethical and spiritual obligations.
Manzil claims Canadian Muslims have a spending power of $20 billion dollars, yet have low participation in homeownership. The startup said this can be because many financing products don’t always conform with the ethical and religious obligations of the Islamic faith.
“For far too long, Canadian Muslims have not been able to access financial products that comply with their faith,” said Mohamad Sawwaf, Manzil’s CEO and co-founder. “In fact, this demographic has the lowest participation of homeownership and capital markets and it’s not because of their balance sheets; it’s due to a lack of products in the marketplace.”
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To solve this problem, Manzil has created “shariah-compliant” financial products, which it said are designed to be participatory, rather than predatory. In conventional mortgages, for example, consumers enter into a loan agreement whereby they pay the lender back the money they borrowed plus interest over a defined term.
“Here, the lender is not purchasing the property, but is simply making money by lending you money,” the startup said. “This is called usury or riba in Islam and it is not permissible and heavily frowned upon by the Muslim community at large. Islam teaches that risk has to be shared and that money cannot be made on money.”
Manzil’s financial products and services are built on the principle of sharing the risk equitably among the parties, not charging interest, and not investing in industries deemed “sinful” such as alcohol, gambling, and weapons.
In addition to home financing, Manzil also offers a mortgage income fund that is used to invest in halal mortgages and share the profits from financing payments with its investors. Although products are designed for the Muslim market, Manzil’s products are available to all consumers in Canada.
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“The Canadian Islamic finance scene has experienced growing interest from domestic and international investors,” said Peter-Paul Van Hoeken, founder and CEO of FrontFundr. “We are delighted to have Manzil on FrontFundr, providing all Canadians the opportunity to invest in a fast-growing private company dedicated to delivering innovative Islamic finance products.”
FrontFundr’s platform allows investors to commit funds to early-stage and growing private companies. Earlier this year, the company received approval from the Ontario Securities Commission to make its services available to investors and companies in Ontario. To date, the company has helped more than 43 companies raise over $35 million.
In 2017, Wealthsimple launched its own halal investment portfolio intended to help Muslims invest in accordance with religious principles.