UK: A global private credit firm has extended Shariah compliant funding to a UK Halal finance start-up to aid it in competing with traditional players in the country’s GBP2.17 billion (US$2.82 billion) car finance market, and more importantly, ultimately help the start-up lay the groundwork for its long-term ambition of setting up an Islamic digital bank.
San Francisco-headquartered Partners for Growth (PFG) has committed up to GBP25 million (US$32.46 million) to Ayan Capital, a digital Halal car financing provider with roots in Central Asia but which entered the UK market in 2023 as part of its European expansion strategy.
The new funding, which is structured based on the Ijarah wa Iqtina concept, will be used by Ayan Capital to deepen its underwriting capabilities – it aims to disburse GBP25 million in financing this year, quadrupling it to GBP100 million (US$129.82 million) next year.
The start-up will also use the capital injection to build toward its ultimate goal of securing a UK banking license, it said.
Since its official launch in Q1 2024, the firm has been able to grow its financing portfolio while achieving enviable asset quality – quarter-on-quarter, it more than doubled its credit line (by 2.2x) and kept non-performing financing levels at 0%.
It also recently expanded its product portfolio beyond vehicle financing to include financing for home repairs, renovations, car repairs and furniture purchases, following a successful GBP2.8 million (US$3.64 million) pre-Series A funding round at the end of last year.
Commenting that the start-up is “growing rapidly”, Ayan Capital COO Furkat Suvhanov, confirmed the platform is building on this momentum, with PFG’s support, to work on its next Shariah compliant debt raise – the target is between GBP75-100 million (US$97.29-129.82 million).
Ayan Capital is one of at least 43 fintech start-ups in the UK offering Halal products but only one of a handful with international ties. This is specifically to Tajikistan where its co-founder Abdullo Kurbanov also co-founded one of the most prominent Halal digital banking brands – Alif Bank – which is serving over four million customers.
Ayan Capital intends to replicate its Central Asian success in the UK, where four million Muslims are grossly underserved. The demand and therefore potential for Shariah compliant finance is expected to grow parallel with the number of Muslims in the UK, which is projected to hit 10 million by 2050.
