Shariah-compliant P2P financing on microLEAP
Shariah-audited process for investors and issuers (MSME borrower) who want to align with Islamic finance principles. Shariah-compliant labelled notes are screened for prohibited activities and structured using recognised Shariah contracts, with oversight by our Shariah Adviser.
Built on Islamic Finance Foundations
Our Shariah-compliant financing adheres to the core principles of Islamic finance, ensuring ethical and halal investments
No Riba (Interest)
microLEAP bases its Shariah-compliant Investment Notes on the concept of Commodity Murabahah (via Tawarruq arrangement). Tawarruq involves a purchase of assets or commodities on a deferred payment basis by way of Murabahah as the financing mode.
No Gharar (Uncertainty)
Transactions are transparent with clear terms and conditions. All parties understand their rights, obligations, and the nature of the underlying assets.
No Haram Activities
We do not finance businesses involved in alcohol, gambling, pork products, conventional banking, entertainment deemed harmful, or any activity prohibited by Islamic law.
Recognised Shariah Contracts
Shariah-compliant Investment Notes use recognised Shariah structures appropriate to the financing purpose as reviewed by our Shariah Adviser.
Risk Discipline
Risk is not eliminated, investors remain exposed to payment risk, so suitability and diversification remain important.
Late Payment Charges (Gharamah)
Any late payment charges are handled in line with Shariah governance and are typically channelled to charitable causes rather than treated as profit.
Shariah-compliant On The Platform
Shariah Labelling: Shariah-compliant labelled investment notes are clearly identified to support investor choice.
Structured Documentation: Contracts and disclosures are prepared to reflect the Shariah structure used for the financing.
Screened Activities: Issuers are screened against prohibited activities in line with the Council's guidance.
Ongoing Oversight: Our Shariah Advisers provides guidance and yearly Shariah audits to ensure we comply to Islamic finance principles.
Our Shariah Compliance Process
Every financing note undergoes a rigorous 4-step Shariah compliance review before being offered on our platform
Business Screening
We conduct thorough screening of all businesses to ensure they do not operate within Shariah non-compliant business activities issued by the Shariah and Fatwa Supervisory Committee of our Shariah Advisers.
Structure Review
The proposed financing structure is reviewed to ensure it is based on a recognised Shariah contract and that the commercial mechanics are consistent with that structure.
Documentation Approval
All legal documents and agreements are vetted to ensure they contain no clauses that contradict Islamic principles.
Ongoing Monitoring
We continuously monitor all Shariah-compliant notes to ensure ongoing adherence to Islamic finance principles throughout the financing period.
Certified Shariah Compliance
Our Shariah Advisers issues a formal certification after each yearly Shariah audit, providing investors and issuers with complete confidence in the Islamic compliance of their investments and financing.
Shariah Governance
Our Shariah Adviser provides independent guidance on screening parameters, acceptable structures, and ongoing Shariah governance for Shariah-compliant labelled investment notes
Masyref Shariah Advisory
Masyref is a registered Shariah advisory firm that provides independent Shariah review and certification services for Islamic financial products. Their council of qualified scholars ensures that all microLEAP Islamic financing notes comply with recognised Shariah principles and approved contract structures.
What the Shariah Adviser does
- Review and endorses Shariah screening parameters and approved structures
- Provides guidance on Shariah matters and documentation principles
- Oversees yearly Shariah audit that is translated into microLEAP's Shariah-compliant processes
Frequently Asked Questions
Common questions about our Shariah-compliant financing and Islamic investment principles
Our Islamic financing is based on approved Shariah contracts such as the concept of Commodity Murabahah (via Tawarruq arrangement). Our Shariah-compliant process is reviewed and approved by our independent Shariah Adviser, ensuring complete compliance with Islamic principles. We strictly avoid riba (interest), gharar (uncertainty), and any involvement with Shariah non-compliant business activities.
Conventional financing involves interest-based lending, while Shariah-compliant financing on microLEAP uses the concept of Commodity Murabahah (via Tawarruq arrangement). Tawarruq involves a purchase of assets or commodities on a deferred payment basis by way of Murabahah as the financing mode. All contracts clearly identify the underlying assets and profit margins, ensuring transparency and Shariah compliance.
Returns in Islamic financing come from the profit margin on trade transactions or rental payments, not interest. For Murabahah contracts, the profit is agreed upon upfront based on the cost price plus a markup. This profit is permissible in Islam as it represents compensation for the risk taken and services provided in facilitating the trade transaction.
The following is the listing of Shariah non-compliant Business Activities issued by the Shariah and Fatwa Supervisory Committee of Masryef, acting in its capacity as the Shariah Adviser to microLEAP. This listing is subject to revision and update from time to time. The list serves as a guide to microLEAP as the P2P platform provider on the types of business activities that microLEAP should not make available under its Islamic P2P platform. This list is only applicable to businesses and not individuals. • Alcohol • Gambling • Pornography • Tobacco and dangerous drugs • Entertainment related companies – those proven to engage specifically in Shariah non-compliant activities, such as karaoke lounges serving alcohol, film production houses producing mainly illicit movies, cinemas that typically screen entertainment related movies. • Pork and its by-products • Food items that are prohibited under the teaching of Islam such as frogs, snakes, crocodiles • Shariah non-compliant massage parlours that allow treatment from opposite gender • Prostitution • Interest-based lending, including credit sales with interest charges • Conventional insurance and unit trust agencies • Hotel – in particular those that offer alcohol, non-halal foods or any other non-compliant activities • Production and distribution of idols, statues, and materials and place for worshipping other than Allah • For restaurants, a halal certificate from JAKIM is preferred but not required, so long the restaurant does not offer Shariah non-compliant foods and drinks, such as pork and liquor Anything outside the non-compliant list will generally fall within Shariah compliant activities. microLEAP's Shariah Advisors will have final say on what is considered Shariah compliant on microLEAP's platform.
microLEAP's Shariah Adviser is Masyref — a registered Shariah advisory firm that provides independent Shariah review and certification services for Islamic financial products. Their qualified scholars ensure that all Shariah-compliant labelled notes on microLEAP comply with recognised Shariah principles and approved contract structures. Masyref conducts a yearly Shariah audit of microLEAP's processes and issues a formal certification upon completion.
Yes, you can choose to invest in Shariah-compliant notes only, conventional notes only, or a mix of both, depending on your preference. Our platform clearly labels all Shariah-compliant investment notes, making it easy for you to filter and invest according to your values. Many investors choose to diversify across both types to maximize their investment options.
No there is not. This is because microLEAP absorbs all Shariah costs. Therefore, for a given risk, there is no difference in cost between Shariah-compliant financing and conventional financing.