US digital asset manager Wahed is planning a new fund to attract investors who would be ready to provide Shariah compliant financial assistance for students pursuing higher studies.
Executive Chairman and Founder Junaid Wahedna told IFN Investor the new fund will be operated separately from its existing portfolio as the risk profile will be different.
“The investor is sharing the future earning potential of the student. But if that student is unemployed at any time, there will be no income to be shared for the investor. We are still crunching the numbers to make this a practical investment opportunity.”
Junaid said the fund will initially be offered within the US as there is a huge demand for alternate financing — where student loans are seen to have become prohibitive. There is no target launch yet for this fund, but Junaid expressed hope it will be available by next year.
Another product that Wahed is aiming to launch is that of fractionalized investments for car purchases. These are among the products Junaid is pursuing, having seen a leadership change at Wahed in March 2024 where Oanda alumni Mohsin Siddiqui took over the CEO post.
Admitting that it was hard to relinquish control, Junaid noted the company’s helm change was inevitable and necessary. Looking back at the founding of Wahed in 2015, Junaid’s focus then was to progressively mitigate risks — starting with the major ones inherent to a start-up.
With progress made over the years, specialists are needed in management and Junaid cited the CEO as an example. Recognizing he was a generalist, Junaid said appointing Mohsin as CEO was part of that journey to having experts guiding Wahed.
“Today, the single largest risk at Wahed is execution risk.” Looking at the next five years, aiming to launch new products and reaching more countries, Junaid said: “Instead of me through trial and error trying to figure out how to scale, it made absolute sense to appoint someone better than me at this specific operator function.”
Junaid wants faster innovations as he feels the Islamic finance industry is developing too slowly with an old-school approach that is not efficient enough. “We are not going to be reaching the moon by being a camel. We need to be a rocket ship.”
Seeing the whole debt culture as ‘unIslamic’, Junaid feels that solving need-based products can be achieved. “We need to educate the Muslim community that there is still a problem of inequality. Youths now keep their money with us instead of with banks, because they understand the inequality effect of keeping their money in banks.”
