Financial Technology based on Sharia Principle

1. Based on data research, there is no specific regulation that governs the Fintech lending
services in Sharia principle either on Otoritas Jasa Keuangan (OJK) or Bank Indonesia (BI)
Regulation.
2. Sharia Fintech is regulated on Regulation of National Sharia Committee - Majelis Ulama
Indonesia (Fatwa Dewan Syariah Nasional - MUI) No. 117/DSN-MUI/II/2018 (“Fatwa
DSN-MUI 117”) concerning Fintech Services based on Sharia Principle.
3. Sharia Principle on Financing it is to avoid:
a. Riba, is addition that is given in ribawi goods exchange (ribawi fadhl) or addition
that is promised over main borrowing as reward of payment suspension (riba
nasi’ah);
b. Gharar, is uncertainty in performing akad, either the quality or quantity of objects
or delivery;
c. Maysir, is every akad that is performed with the unclear purpose and uncareful
calculation, and speculation;
d. Tadlis, is an act hiding the faulty of akad object which is committed by the seller
to trick buyer as if there is no fault;
e. Dharar, is an act which can cause danger or loss to other party;
f. Zhulm, is injustice, aggression, doing the inappropriate and preventing a right; and
g. Haram, is something sacred to which access is forbidden or sinful.
4. Legal subject of Sharia Financing:
a. Service Provider;
b. Lender;
c. Borrower.
5. Based on Fatwa DSN-MUI 117, akad that is used by parties in implementation of sharia
financing consists of:
a. “Akad Al Ba’I” is a contract between seller and buyer that results in alteration of
object ownership which is exchanged (goods and price);
b. “Akad Musharakah” is a contract between two or more parties to contribute in a
partnership. Profits generated by the partnership that are shared in accordance
 with the terms of Musharakah Contract. Losses are shared in proportion to the
respective of contributor’s share of capital;
c. “Akad Mudharabah” is an agreement between a capital provider (shahibu mal)
and an entrepreneur (mudharib) whereby the shahibu mal would contribute
capital to the business which is to be managed by mudharib. Profits generated by
the business are shared accordance with the terms of Mudharabah agreement.
Losses to be borne solely by the shahibul mal unless the losses are due to the
customer’s misconduct, negligence or breach of contracted terms;
d. “Akad Qardh” is a loan agreement between Lender and Borrower. Whereby
Borrower obligated to repay Lender in accordance with the loan agreement;
e. “Akad Ijarah” is a lease whereby a lessor buy and the lesses out an asset required
by lessee for an agreed rental amount and period in exchange for the benefits
resulting from the use of asset;
f. “Akad Wakalah” is a contract of agency, in which a person (muwakkil) delegates
his business to another and substitutes the other in his place. The person
delegated is called wakil. Thus, both the principal and the wakil are equally bound
by each other under contract of wakalah;
g. “Akad Wakalah bi Al Ujrah” is a akad wakalah which has a return fee; and
h. “Akad Baku” is a written agreement that is determined unilaterally by the
provider with a standard clause on content, form, how to make, operates and used
to offer the products and / or services to consumers (in blast).
6. Companies who registered and operated in FinTech Sharia:
a. Operated:
(i) Ammana FinTech Sharia (https://www.ammana.id/)
b. Registered:

(i) Ethis Crowd;

(ii) Kapital Boost;
(iii) Syarfi;
(iv) Danakoo Sharia
7. Related regulation on Sharia Banking and Sharia Financing:

a. Law No. 21 of 2008 concerning Sharia Banking;

b. OJK Regulation No. 24/POJK.03/2015 concerning Sharia Banking and Business

Unit Sharia; and

c. OJK Regulation No. 31/POJK.05/2014 concerning Sharia Finance Business.

8. References:
a. Majelis Ulama Indonesia (Fatwa Dewan Syariah Nasional - MUI) No. 117/DSN-
MUI/II/2018 concerning Fintech Services based on Sharia Principle.
b. https://fintechsyariah.org/