Finocracy to launch new zakat crowdfunding platform in time for Ramadan

Fintech company Finocracy will launch a crowdfunding platform to re-orient zakat for contemporary needs and help givers track the impact of their donations.

The platform, called Human Crescent, will onboard charities with good track records that are already collecting zakat. It is targeting a pre-Ramadan launch.

“We’re taking projects from reputed organisations and putting them onto the platform,” Finocracy CEO and co-founder Mohammad Raafi Hossain told Salaam Gateway.

Human Crescent will add another layer to the process. “The only other thing that we’re adding is that we require charity partners to report the impact of an individual zakat onto the platform,” said Hossain.

"Zakat givers will be able to view their zakat ‘portfolio',” said Hossain.

“From our perspective, this will give people a legacy of their zakat portfolio over time. Once the user starts giving, on an annual basis they can start to see the impact of their zakat,” he said.

Human Crescent will focus on disbursing zakat to six recipient categories: trafficking victims, refugees/internally displaced persons, microfinance clients, education, disaster victims, and poverty alleviation.

Hossain says the recipient categories are Shariah-compliant. “We’ve spoken extensively to numerous Shariah scholars and we’re not diverging from the eight asnaf (approved recipients as stated in the Quran),” he said.

The recipient categories were selected to channel zakat into emergency humanitarian projects.

According to Hossain, Finocracy is covering the development cost of the platform, although it has received commitments from U.S.-based World Congress of Muslim Philanthropists and is leveraging its extensive network.

In December 2016, World Congress of Muslim Philanthropists acquired waqf-based crowdfunding platform Narwi, which was also developed by Finocracy.  

“We are seeking supporters but they’re not taking equity,” he said, confirming that Finocracy and its partners are taking on Human Crescent as a “public good.”

While Finocracy is working towards making Human Crescent an awqaf-supported project, the platform itself solicits zakat, said Hossain.

It will start with charities based in Western markets. “Our approach will follow more of a technology adoption curve. The platform will first focus on the Western markets, such as the United Kingdom and the United States, where there’s not necessarily a sovereign zakat entity, and where generally technology gets adopted first,” he said.

“Then we’ll take an Uber-like approach into different markets that have the oversight of regulatory bodies but in the initial couple of years all we’re trying to do is to build traction and confidence in the Western markets.”

Finocracy will release the names of charities that will be listed on Human Crescent “very soon”, said Hossain.

There is no definitive statistic for annual global zakat donations and estimates range from $200 billion to $500 billion.

Zakat is an annual 2.5 percent tithe that is mandatory on Muslims who meet a minimum amount of wealth.

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