Qardus, an Ethical and Sharia-Compliant Financing Platform for Social Impact SMEs, Secures £318,837 via Seedrs

Qardus, which claims to be an ethical & Sharia-compliant financing platform for social impact SMEs and investors, has secured 106% (£318,837) of its £300,002 target from 153 investors (at the time of writing) with 17 days left in the firm’s crowdfunding campaign carried out via Seedrs.

Located in London, United Kingdom, Qardus  operates in the Finance & Payments (Digital Mixed B2B/B2C) sectors. Incorporated in August 2019, the firm reports a Valuation (pre-money) of £8M; Equity offered is 3.83%; Share price is £7.51; Tax relief; EIS.

Key business highlights are as follows:

  • Over £2.3 million in SME financing.*
  • Growing list of investors with £8.2k avg. investment balance.
  • 3x increase in avg. revenue per deal (ARPD) over last year.
  • Track record with over £600k in repayments to date.

Key features: Secondary Market; Seedrs nominee min. £15.02 +; Direct investment min. £25,000.00 +.

In the UK, the 4 million strong British Muslim community “contributes over £31 billion to the UK economy (2012 stats).”

However this highly entrepreneurial community “is massively underserved due to the lack of financial services that align with their ethics and values.” This is primarily “due to prohibitions on the payment and receiving of interest in Islam.”

There is a gap in the market in particular “when it comes to Sharia-compliant (i.e. Islamic) business financing options for SMEs and fixed income products for investors.”

Globally, even though the Islam finance market is “expected to reach £3.69 trillion by 2024, 35% of SMEs in Islamic (OIC) countries are deterred from obtaining financing due to a lack of Islamic financing options (IFC).”

At Qardus they aim “to solve this problem by leveling the playing field so all SMEs can grow and continue to play a vital role in the economy.”

Qardus is the UK’s first ethical & Sharia-compliant financing marketplace “for social impact SMEs and investors.”

The firm’s  Monetisation strategy is as follows:

Current Revenue Stream

The firm charges SMEs “an arrangement fee of 5% of funds raised on our platform.”

These are deducted “from the proceeds before drawdown by the business.” On their last couple of deals they “started charging 6%.”

As explained by the firm:

“We charge investors an ongoing annual servicing fee of 3% of the funds invested. On our last deal we started charging 3.5%. This means our total fees currently amount to 14% of the deal value over the 36 months tenor of a facility.”

Future Revenue Stream

In addition to the fees highlighted, going forwards the firm plans to charge:

  • In addition to the fees highlighted, going forwards we expect to charge: Financing as a Service (FaaS) fees for use of our proprietary technology by Islamic financial institutions across the globe.
  • In addition to the fees highlighted, going forwards we plan to charge banking fees, as we aim to become an Islamic SME challenger bank. We note that this will require us seeking additional regulatory permissions.

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