AlBaraka Capital Signs MoU with INVIA to Launch the First Revenue-based Finance Fund
AlBaraka Capital, a subsidiary of AlBaraka Bank Egypt and an innovative Islamic finance advisory firm, is pleased to announce the signing of a Memorandum of Understanding (MoU) with INVIA, the leading fintech specialized in innovative finance for small business (SBs) in Egypt, to launch the first Revenue Based Finance (RBF) Fund a “sharia Compliant” fund aimed at financing Small businesses with a special focus on the manufacturing sector in Egypt.
The RBF Fund, structured in accordance with Sharia principles, is the first of its kind to offer an innovative financing solution that promotes shared risk between the investors and the SBs by offering finance in exchange of percentage of future revenues. This innovative approach not only aligns with Islamic financial ethics but also provides a more accessible and flexible funding option for manufacturing SBs.
This groundbreaking initiative addresses a critical gap in the market. Manufacturing small businesses often face significant challenges in accessing finance and tailored made business support due to stringent lending criteria and the complexity of obtaining funds from traditional sources. These businesses, which are vital to economic growth, struggle to improve their operational and financial performance, and to expand their operations due to limited financial resources and lack of proper business support.
“By partnering with INVIA team, we are committed to empowering manufacturing SBs, which are the backbone of our local economy. The RBF Fund will provide the much-needed financial support to help these businesses overcome their challenges, enhance their capabilities, and meet the strong domestic demand,” said Sarah Hosni, Managing Director of AlBaraka Capital. “This fund represents our innovative approach to offering Sharia-compliant financing solutions to SBs, specifically tailored to support the manufacturing sector, which is crucial to sustainable economic growth. By aligning with the government’s strategy to bolster this sector, we are committed to driving economic progress and enhancing the overall industrial landscape in Egypt.”
“We are excited to collaborate with AlBaraka Capital on this pioneering initiative, we believe in supporting Small businesses with innovative financial tools that fit their need for growth, in addition to providing business support in helping entrepreneurs navigate the complexities of scaling their businesses said Yehia Ashour, CEO of INVIA. “Our joint expertise and commitment
to ethical finance will create a robust support system for manufacturing SMEs, enabling them to thrive and contribute significantly to the local economy.
SMEs in the manufacturing sector play a crucial role in meeting the high demand for locally produced goods. However, their growth is often stifled by the difficulty in securing adequate financing. The Musharaka Fund aims to bridge this gap by providing Sharia-compliant investment opportunities that are designed to be more accessible and equitable.
The launch of the RBF Fund underscores the importance of innovative financial solutions in driving economic progress. By supporting manufacturing SMEs, the fund will help create jobs, stimulate local production, and reduce dependency on imports, thereby strengthening the overall economic framework. Dreny & Partners will act as a legal advisor for structuring the RBF Fund.
