Globally, zakat, or mandatory alms-giving by Muslims, is between $200 bln and $1 tln a year. Russia’s Islamic fin-tech project PayZakat is intended to make zakat computation and payment more transparent, simple, and clear. The project is already among the winners of the Sberbank’s internal accelerator, SberUp, and has got over a thousand users. Its founders say, there are no analogous projects neither in Russia nor abroad, so they are now eyeing the global market. No doubt, there will be some demand there, as there are over 1.6 bln Muslims in the world (24% of the global population).
The idea to launch such a project was conceived back in 2015 by one of the managers of the Azerbaijani e-government and Member of the Supervisory Board of Azerbaijani Technopark (and current PayZakat CEO) Elnur Aslanov. The idea was the result of lengthy discussions with specialists in Islamic banking and finances, as well as of analysis of the present-day state of charity payments in the countries of the predominantly Muslim population. It was figured out that donations do not always reach their addressees, there are limitations on choice of a country, foundation, and project. Yet the main problem is a lack of feedback and knowledge of projects’ fates.
PayZakat is specifically intended to help avoiding such situations, Behnam Gurbanzada, specialist in Islamic banking with a 15-years’ experience, Chief Islamic Finance Officer of Sberbank, and the project’s cofounder and CFO/CBDO, says. The developers of the service hope it will limit impact of the human factor in settlements, collection and distribution of funds intended for charity. Users will be able to freely select recipient countries and foundations for their charitable donations, and will be certain of their funds’ instantaneous transfer there. The most important though, the project ensures feedback and monitoring in the interests of philanthropists. Nowadays, 96.7% of zakat and sadaka (voluntary charity) payments are flowing through traditional channels and hence it is almost impossible to monitor the way the funds are spent.
The service is based on an AI bot and may be used via the project’s webpage, Facebook, Viber or Telegram. It is anticipated WhatsApp will soon be employed as well. Having asked some questions on the scope of revenues, a bot calculates zakat amount (taking into account value of stocks, gold, etc. in possession), helps selecting a recipient foundation for the transfer, the project to be supported, and then remits a transfer. Most importantly, the service allows monitoring a project implementation. The service can be used for other charitable donations in addition to zakat, as well.
The startup has prepared its MVP, gathered over a thousand subscribers, and processed more than 200 transfers. Some charge is collected for the services rendered. The project’s full-scale launch is intended at the end of 2018 or early 2019. The current stage allows fully implementing a number of adjustments and NLP. Initially, the service will be promoted in Russia, and then it will be available in the nearby countries such as Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. After that, it will advance to the global market. Some charity organizations from all over the world have shown their interest towards the project. By the end of 2019 the project plans to process donations from 50K philanthropists, each payment averaging RUR 50K ($740).
“Our platform has got no analogues. The existing similar solutions do not offer the scope of services provided by our technology solution”, PayZakat notes.
Matter of trust
At the outcome of SberUp, PayZakat was named among the projects which got Sberbank’s investment offers for as much as RUR 5 mio ($74K). The project’s advantage is a strong team and a sizeable revenue which evidences the product is in demand, Natalia Magidey, Executive Director of Sberbanak’s Digital Business Development Directorate, says.
“It’s essential for us that PayZakat is a social project promoting charity initiatives”, she explains.
It is expected the project will get access to payment solutions making donation process transparent, and to communication channels for its advancement. The partnership scope will be ultimately determined by the business results achieved by the project team, Natalia Magidey notes.
By Olga Blinova