Blocko To Develop Blockchain Credit System For Islamic Development Bank
Blocko To Develop Blockchain Credit System For Islamic Development Bank
June 16, 2020
Blocko To Develop Blockchain Credit System For Islamic Development Bank
Blocko To Develop Blockchain Credit System For Islamic Development Bank
June 16, 2020

The research arm of Saudi Arabia’s Islamic Development Bank Group is aiming to develop a blockchain-based smart credit management system with the help of Blocko.

The bank’s Islamic Research and Training Institute has partnered with the Samsung-backed blockchain provider Blocko.

The partnership comes as a part of the E24P regional consortium launched by Blocko across the Middle East, Africa, and South-East Asia in April.

As the Islamic finance industry is predicted to grow from $2 trillion to $3.78 trillion by 2022, Dr. Sami Al Suwailem, director general of IRTI, says there still are various technical and economic challenges that “prevent the industry from truly flourishing.”

Unlike traditional financial organizations, Islamic banks do not charge interest on loans or penalise loan defaulters but rather charge a late fee donated to charity. 

ALSO READ :  Chinese Journalist Published Report On Coronavirus Within Ethereum, Amid Censorship

However, this approach eliminates the urgency for borrowers to pay back their loans. Additionally, such banks also face the difficulty of efficiently distributing the late fees to charity. 

The smart credit management system is being developed by E24P and IRTI. It will be based on the Aergo hybrid blockchain and expected to put an incentive mechanism in place that will encourage timely repayments.

It will also automatically contribute the fees to insurance pools that cover the loan defaults.

The blockchain credit system is said to help both Islamic banks and other financial institutions conduct credit assessments in a more secure and transparent manner, without compromising on the privacy of the involved parties.

The CEO of E24P Phil Zamani, says that the system will help banks:

“deliver a truly unique solution that has the potential to have a significant impact on the world of Islamic finance.”

It may further reduce the costs and operation difficulties by including the otherwise restricted financing functions such as credit reporting, credit rating, credit history, and credit insurance.

ALSO READ :  Bitcoin Depot's Brandon Mintz Says Blockchain Can Help Find A Cure For COVID-19

Source: Cointelegraph | Image: Unsplash


Crypto News Point a news platform of Digital Notice Media Labs is primarily a regular publication of information, commentary and articles focused extensively on fintech, blockchain technology, cryptocurrency, blockchain-based tokens, cryptocurrency market trends, and trading strategies. We do not provide individually tailored investment advice and does not take a subscriber’s or anyone’s circumstances into consideration when discussing investments, nor is Crypto News Point registered as an investment adviser or broker-dealer in any jurisdiction. Information contained herein is not an offer or solicitation to buy, hold, or sell any digital assets.

Affiliate Disclosure: To help support the work we do here at CNP, we often link to products and deals from around the web. Should you buy some of these, we may get a portion of the sale.

We in generally gather content from the major websites. In every article there is always a clear link and attribution to the source publication. If you have any issue with any of our published content taken from your site, kindly let us know so that we can take appropriate action. In any case, the content of the pages of this website is for your general information and use only. It is subject to change without notice.

You May Also like

Jafrin Ahmed

Crypto newbie passionate about creating resourceful content on blockchain technology, cryptocurrencies and decentralized apps.