Muslim Money Talk
Introducing the Muslim Money Talk Podcast, a place for all things Muslim and Money related.
Every week we'll be sitting down with Founders, leaders and industry experts from across multiple disciplines to discuss lessons learned, mistakes made and most importantly 'How they did it?'.
Brought to you by Kestrl: The Muslim Money App, software to help Muslims grow their wealth without compromise. Find out more here: https://kestrl.io/
Muslim Money Talk
Quitting Our Jobs To Launch A £25M Islamic Fintech | Daeng Termizi & Areeb Siddiqui Ep 46
In this episode of Muslim Money Talk, co-founders Areeb Siddiqui and Daeng Termizi dive deep into the journey of building Kestrl, a Muslim fintech startup, from meeting during their MBAs at Cambridge to launching a full-fledged digital Islamic bank. They also explore the philosophy behind Islamic economics, Malaysia’s unique position in Islamic finance, and reflect on the spiritual and economic motivations driving their mission.
This podcast is hosted by Areeb Siddiqui, the founder and CEO of Kestrl, the app that helps people to grow their wealth without compromise
Find out more about our app here: https://kestrl.io/
And how we help banks here: https://business.kestrl.io/
Show Notes:
00:00 - Opening trailer
02:38 - Intro
04:08 - Childhood in Malaysia and education
08:45 - Malaysia as a hub of Islamic Banking
11:36- Doing the MBA at Cambridge
14:18 - First meeting and the idea for Kestrl
21:33 - Monzo for Muslims?
23:45 - 1st funding round and feedback
26:06 - Daeng's side hustles to survive
30:36 - Finding the right co-founder/CTO
35:17 - Hiring the in-house tech team
40:53 - Going B2B SaaS
42:28 - Launching the Kestrl digital bank
43:37 - Should Muslims move to Malaysia?
48:11 - Malays having different rights
56:46 - What is the Ideal Islamic Economy?
Do you remember how we first met? I was paying for lunch with my card and it was Barclays, and you said hey man, why don't you use an Islamic bank?
Speaker 2:Yeah, I mean that's true because, okay, that's a backstory to that, right For context, I think that was the year that Monzo blew up, right.
Speaker 1:Yes, it was a different time for fintech Monzo, Revolut, Starlink, Chime, Nubank N26. All these guys were entering and it was all about blitz gaming.
Speaker 2:Like 90% of startups failed In their first year.
Speaker 1:Yeah, who want to take that watch right?
Speaker 2:But we weren't alone.
Speaker 1:There were a lot of other people trying this at the same time. This was 2019. Why did you think we could do something different to them at the time?
Speaker 2:Something different to them I, to be at the time. Something different to them I, to be honest, I. Can we talk about this now?
Speaker 1:you are the ceo, if you got into this point of the episode. You deserve to know this. We will be launching a full digital islamic banking offering this summer. In today's episode, I'm joined by my good friend, co-founder at Kestrel and our chief operating officer, dying. Termizi.
Speaker 1:Dying and I first met whilst we were doing our MBAs at the University of Cambridge Judge Business School, and we both recognised a huge problem that was happening in the UK, where 5 million people here and 25 million people in the Western world at large, who identified, like us, as Muslims, were struggling with Islamic banking. So we thought could we combine our skills mine in fintech and strategy, his in Islamic banking to try and solve this? Five years later and here we are with Kestrel, this podcast, and we'll be getting into that story. We're going to be talking about our startup journey as a whole, our hopes for what we want to do at Kestrel, as well as talking about life for founders in the UK versus Malaysia, where dying is from. We're also going to be debating what a true Islamic economy can and should really look like. I'm going to say that part again, Amir. We'll also be debating what a true Islamic economy can and should look like. I'm going to say that part again, amir. We'll also be debating what a true Islamic economy can and should look like, drawing upon examples from history and imagining what we could do with the assets now and for the future.
Speaker 1:As always, I'm your host, areeb Siddiqui, and this is Muslim Money Talk. Before we begin, we actually noticed only about 10% of you are subscribed to the podcast, so if you like what you're listening to and you want to hear more from us and see more things Muslim and money related, then please consider subscribing and, of course, leaving this episode a like and share it with your friends. Leave us a comment or a review, because it really really does help us out and help more people to find us. Thank you. Now back to the show. Dalamu alaikum, waalaikum, salam and welcome back to the show.
Speaker 2:This is actually your second appearance.
Speaker 1:Technically, yeah, technically, yeah. Uh. Not many people saw that as one of our first episodes but you and your fan joined us when I was in kl uh last year last year should watch that.
Speaker 2:Yeah, it was a good one.
Speaker 1:It was a very interesting one, Ali, my brother, who watched the whole thing through described it as madness, but in a good way, because, like the company. I mean to our shareholders. It's not that bad, but otherwise good. But how are you doing?
Speaker 2:I'm good alhamdulillah.
Speaker 1:Yeah, feeling the jet lag, You're joining us here in London today.
Speaker 2:Not really jet lag. My trick is always take the transit flight so your body has time to adjust.
Speaker 1:To adjust because you're stopping in Qatar or Dubai or somewhere.
Speaker 2:And you have to wake up and you readjust the sleep time.
Speaker 1:Yeah, instead of doing the non-stop I've done 13 hours before to Malaysia. It's rough, that's a really rough flight.
Speaker 2:I don't want to do that anymore.
Speaker 1:So I think this will be a really interesting chat, because a lot of our listeners are entrepreneurs or they want to be in the future, and we've gone through it and we've been doing it for five years, alhamdulillah. Sometimes I wonder how we're still here, because if you remember, remember.
Speaker 1:Our original plans are very different to what we're doing now to an extent, yeah, and it really does feel like we've been guided in this direction, yes, literally by no power of our own. Yeah, alhamdulillah. So, casting your mind back, I guess my first question to you is is this what you imagined you'd be doing as a kid? Entrepreneurship Islamic banking what did you want?
Speaker 2:to do as a child? No, of course, of course. No. Kids are like imagined to be a banker. I don't know. I mean probably you.
Speaker 1:No, not me, Definitely not me. Definitely not me, I want to be a zoologist, yeah.
Speaker 2:I want to be an I think an astronomer or a soldier or something like that right but I think towards, like middle school, high school, I'm quite keen on entrepreneurship actually, really yeah, yeah, so I'm so you grew up in. Johor, stayed in Malaysia, yeah, and then you went to school in KL, kuala Lumpur no, I went to school in in Johor like high school. I went to did my, I did my level in KL, sort of KL, not really KL, but the outskirts, yeah, the outskirts.
Speaker 2:But then in Malaysia, I think, after form three, you go into form four, which is like, which is equivalent to O-Level, basically right, and you have to choose your stream. Right, you have to choose where the arts. Usually in Malaysia. You can't mix and match. You have to choose art stream or, like, science stream.
Speaker 1:Really Okay.
Speaker 2:Yeah, so art streams are like economics, counting things like that. Science streams are your biology, physics and so on.
Speaker 1:right, Okay, so even your art schemes aren't really art. Yeah, it's not art per se, it's just more into soft science versus hard science.
Speaker 2:Yeah, yeah, yeah, technically right. So I was keen on art stream. Technically why? Because I wanted to become sort of like a businessman. I don't know what idea of business or something, but I wanted to become a businessman. I don't know what idea of business or something, but I wanted to become a businessman what?
Speaker 1:what was it that drove you towards that?
Speaker 2:were you selling stuff at school yeah, I did sell some stuff at school and so, but I think it's in it, right, it's. It's. It's just in you, you want, I think you want to build something or something like that, right? So? But then my dad is a lecturer, I mean he's a physics or nuclear physics professor, so he's against that idea.
Speaker 1:He wants you to go into academia.
Speaker 2:No, he wanted me to take the science stream. In hindsight it's also a better choice because the fact of the matter is a lot of, I would say, more academically inclined people take the science stream right, and even at university. If you take science stream, you can go into like economics countings and so on.
Speaker 1:I did physics.
Speaker 2:I studied physics, ended up in financial services so I did that, scored pretty well, got a scholarship. I remember in one of the interview right scholarship interview the interviewer asked me why don't you apply? At that time I think I applied for a tutorial, science or something like that, just purely because of my university. Yeah, for the scholarship, for the scholarship. So you have to apply for what subject you want to do so for people who don't know the scholarship.
Speaker 1:So you have to apply for what subject you want to do so for people who don't know. The scholarship program in Malaysia is relatively unique in that the state or different companies will pay for your bachelor's education abroad. Yes, often in the UK, but also in America, in America but the.
Speaker 2:Thing is say, like Bank Negara, the central bank where you ended up working, they'll pay for your undergrad in exchange you go and work, yeah, yeah, for a certain process in a period of time until it's paid off.
Speaker 1:Yeah, so that's quite common, kind of like the best of the best. Students in malaysia, yes, will vie for these scholarship programs and there's like tiers of the different scholarship programs you can go for yeah.
Speaker 2:So coming back to that story, right? The interviewer asked me why don't you apply for medics? Because I think they saw my results and usually I'm an asian right. Um, best student, go to medics. I remember saying that I don't want to be doctors, I want to be the one who owns the hospital, something like that okay, that's quite a big thing to say for an 18 year old.
Speaker 2:Yeah, because yeah, basically that right. So I have that idea early on. So the interest is there early on. But being a banker, um yeah, being in banking, you know that's not in in the plan, right or not in the plan?
Speaker 1:it was just a path, a route. So then you found yourself in the uk. You were doing economics at Exeter. Yeah, I was doing economics at Exeter.
Speaker 2:Pretty well. I got first class. I had some good time, went back and worked in.
Speaker 1:Bangarra, the central bank where you specialised in Islamic banking.
Speaker 2:Yes, I was thrown into the Islamic banking department. So I have to basically technically take a degree in three months, learn everything about Islamic banking department. So I have to basically technically take a degree in three months learning everything about Islamic banking right, All the concepts and so on and Malaysia is really seen as like this for a long time. Yeah.
Speaker 1:The hub for. Islamic finance for Islamic banking. How did they develop that reputation?
Speaker 2:I think it's. It's the will, and I mean the desire to develop that right. It comes from the top also, from like central bank. They want to develop that. The government also wants to develop that sector. So when you have that basically coordinating will, right and policies, everything can happen. A policies Everything can happen.
Speaker 1:A lot of things can happen and all of the Islamic economies. Malaysia was kind of uniquely positioned. I think it was like the 80s maybe, where they decided to go all in on Islamic finance, wasn't it? Yes?
Speaker 2:It started off as a real concern because Malaysia is Muslim majority, right, it's not Like 100% Muslim, but it's Muslim majority and, and it's a real concern, like my dad, like this is personal right, my dad didn't buy a house Until they have an alternative. Like, I think, bank Islam Right. So he had loads of kids by that point. Yeah, yeah, but he, like I said, For people who don't know you're one of nine, yeah, nine siblings.
Speaker 1:So you're number seven out of nine, yeah okay.
Speaker 2:So my dad was like, say, like a professor at UTM, right one of the universities, so he we stayed in the university like oh really yes so I was. I grew up in university, like technically in a campus, so cambridge wasn't that different for you when you were on campus? Yeah, technically, yeah, obviously it's very different. You're in a whole different country, so yeah my dad didn't buy a first house until um the alternative came about right the bang islam thing, so he kept renting until that really interesting at that point so it's a real, but that wasn't he wasn't unique.
Speaker 1:Hey, he wasn't. I mean he wasn't unique.
Speaker 2:Unique in the terms that a lot of people also have the same similar desire yeah, objection to rebut for sure so come about as that. It's inclusion. Firstly, it's inclusion right. You have to give the majority of the people what they want. What they want and a way to participate in the economy right for sure buildings and so on.
Speaker 1:You were in quite a unique position in this economy, which is the hub of Islamic finance, and we'll come back to that and revisit that later on. Then you decided to go to Cambridge to do an. Mba, so you'd studied, you'd been working for maybe five, six years. Yeah yeah, five, six years. Okay, and why the MBA? What was it about?
Speaker 2:it. So it's not something that is out of the blue, right? So the thing about central banking is it's a unique industry, meaning that you don't have another central bank in the country, right? So you are the and the skills are different. So central banking skills are different, small policies and so on. I mean corporate banks doesn't do policies per se, like national policies and so on, but I know that I don't want to do that for yeah, forever. So if I now offer myself to the industry, right? So what skill do I have? I mean, of course, I know, like central bank offer a lot and so on but, it's not like 100% transferable or something like that.
Speaker 1:So was it really skill-based? That's why you were doing the MBA. It wasn't branding.
Speaker 2:Branding is one thing. Branding is about the schools, right. But the MBA is technically a gateway for me to go switch industries, right? I mean, basically, the MBA has always been sold as a way for you to switch industries right yeah, which I really.
Speaker 1:If anyone out there is considering doing an MBA, my sincere, even though it changed our lives. We met each other. We came up with the idea for Kestrel 100%, but I don't think that's a usual route, or?
Speaker 2:story. I think the Cambridge SFD is like triple If you change industry, change geography and change.
Speaker 1:I think position yeah, that's your like your holy grail.
Speaker 1:Everyone's trying to do one of those three things Move country, move industry or get hired higher up. Yeah, that's your holy grail. Everyone's trying to do one of those three things move country, move industry or get hired higher up, wherever you are. So that's the initial intention, but for me it's really about brand and network. That's all. It is brand, which is all about the university. You go to just doing an MBA on its own for the academics. You can get most of that for free, or eight pound 99 at waterstones you can buy a. What harvard business school taught me?
Speaker 1:yeah, how to start a business um but branding, and it opens so many doors for you we saw that at kestrel and network. Yes, the network, because you're making an educated guess that a lot of the people you'll study with will become high-flying individuals in the future. Yes, yes, and a lot of those people actually supported us on our journey.
Speaker 2:Yeah, that's true.
Speaker 1:I'm spoiling the story. I'm trying to make it sequential, but we keep jumping around with it. So you're at Cambridge. Do you remember how we first met?
Speaker 1:Prayer room right Probably prayer room, Because there were only a few Muslims on our course. Yes, so finding and people Judge. Business School used to be a hospital for people who don't know, a children's hospital, so it's set up as kind of higgledy-piggledy all over the place. When you come into the main hall, it looks kind of like the staircases from Harry Potter and Hogwarts, the stairs going all over the place. So people either love or hate the architecture, so finding that prayer room was quite difficult.
Speaker 1:So I think we kind of like knew from that.
Speaker 2:And then we had a few classes together in that first term. Yeah, of course.
Speaker 1:I think corporate finance accounting.
Speaker 2:I can't remember which class. All of those in the first term we were doing.
Speaker 1:But do you remember when the idea came up for what we should do. What?
Speaker 2:we were doing, but do you remember when the idea came up for what we should do? What we should do what we are currently doing or what we should?
Speaker 1:do no.
Speaker 2:No for Castro for starting something, doing something in business together I can't remember when exactly, but I think we toy the idea of doing some business right, starting something, but I don't think it's Islamic banking. No, my ambition doing some business right, starting something, but I don't think it's Islamic banking, no, my ambition was never entrepreneurship. Okay, all right, I think you know that.
Speaker 1:I had been in consulting, I was at Deloitte, I was at Alpha. I did an MBA because I was kind of sick of working in like a. The culture was not very conducive to being muslim, very alcohol-based, a lot of socializing, late nights. That ramadan preceding them was like the worst ramadan I'd ever experienced because of work. I was working in beautiful buildings in the middle of london, top floor, you know surrounding, could see all of the city. But it was ramadan, yeah, and I wanted to be a tharaway.
Speaker 1:I was breaking fast on my own um, just alone having to work late nights on these projects and it was maddening and it made me want to leave it all behind. But I just thought, maybe I'll do an mba and figure something else out new industry or at least get hired somewhere else more senior, with a better culture, and I think it. We tell this story a lot, but I think it is actually true. It's true.
Speaker 2:I was paying for lunch.
Speaker 1:Yeah, I think that sparked the interest, right, yeah we were in the canteen I was paying for lunch and you saw my card. Yeah, I remember this was the first time I was paying for lunch with my card and it was Barclays. And you said hey man, why don't you use an Islamic bank?
Speaker 2:yeah, I mean that's true because, okay, that's a back story to that right. I did my degree in 2010 until 2013 yeah, we were the same year, yeah so at that time, when I arrived, I opened a Lloyd's account, but it's an Islamic account. At that time, I think it existed yeah, it existed, and it's Amana and so on and so on right. Lloyds also have that. So in my mind they are still there, because I still have my account, If you are Lloyds made the choice, unlike HSBC. Yeah.
Speaker 1:If you had an Islamic account, they were going to Keep it.
Speaker 2:Keep it. Yeah, they'd maintain it, whereas HSBC Amana.
Speaker 1:When they left, they closed down people in Islamic banks.
Speaker 2:So it was a genuine question for me.
Speaker 1:Like why? Why are you using yeah?
Speaker 2:Because I saw you praying man.
Speaker 1:Yeah, I think that's why we were quite close, because we would use the prayer room. Yeah, we'd find halal spots in Cambridge, usually all in Mill Road. And then my response was well, we have Islamic banks, but they're not great. Yeah, and I was thinking of Orayan and some of the others. My mind was thinking about Lloyds.
Speaker 2:You were thinking about Lloyds.
Speaker 1:And that's when I was like, oh, lloyds has an Islamic bank account. I didn't really know, yeah, because it kind of came and went really quickly and I wasn't old enough to be thinking about opening bank accounts and stuff at that time.
Speaker 2:Um, when it first started, and that's when we thought maybe there's something there. Yeah, I think that's sparked the conversations, yeah, but it's definitely not the point that we say, okay, let's build a business around this, other stuff happened yeah there was a financial times article about wahid yep that came out in early 2019 yeah, we were sat in the library doing one of many assignments yeah and then we saw this article on our free cambridge financial times subscription, which we don't have anymore.
Speaker 1:Um with jened, the ceo and founder of wahid his picture there yeah in the office saying islamic finance coming to to the New Islamic robo-advisor, and we thought, hey, that's interesting. And I think partly we were thinking should we get a job at Warhead?
Speaker 2:Really I think so because we wrote to them.
Speaker 1:I don't know if they replied back, but we said we're two Cambridge MBA students. Are you interested? They did. Actually, Abul, who came on our podcast, came and said we should have a meeting.
Speaker 2:We should have a meeting, uh, and that's how I went to see him oh, okay, yeah, I think I did it.
Speaker 1:You were doing something else, I think. But we went to see him and I think that's when we were like maybe we could, yeah, we could do something, and then we started to put two and two together. I think for me it was. I'd done a bunch of robo advice projects at my previous consulting job and then you had the Islamic finance and banking know-how, so I thought maybe it's possible.
Speaker 2:Maybe we could do it For context. I think that was the year that Monzo blew up, right?
Speaker 1:Yes, it was a different time for FinTech Monzo, revolut, starling, chime, newbank, n26. All these guys were entering and it was all about blitzscaling. So it doesn't matter how you make money. Think about that later. Just get the customers in. And here's a 10 million pound check from a venture capital firm to go and do it and experiment. And we naively thought we could get a piece of that action.
Speaker 2:I think you need a bit of naivety in doing a startup, right? You think so? Yeah, because, if you are real, because let's put it like this right, like 90% of startup fail In their first year, yeah, who want to take that odds? Right, it's not wise to take that gamble or do that gamble, basically, right. So if you think on the framework of risk reward I mean any calculation whatsoever you'd be a crazy person to be doing this, so you have to be a bit naive and crazy to think that we can do it and we were both.
Speaker 1:Yeah, we were definitely both we were naive in thinking we'd be able to raise funds very quickly. I should say we were thinking about doing other stuff. We tried consulting because that was my bread and butter and I was really saying I think we could do a consultancy and we'll go off the Cambridge brand some Islamic finance.
Speaker 2:We almost got one client if you remember, yeah, what happened? You put a price in and they never responded.
Speaker 1:Yeah, I think they the whole time thought we were going to do it for free and for context. We can't say who they were, but they were a pretty big, well known bank bank in the UK.
Speaker 2:Yeah who were very interested.
Speaker 1:We got we did like multiple proposals yeah, pitched to them directly at quite a senior level and then, when I put in the pricing, we just never heard back from them. So we learnt a lesson which came back. It reared its head again at Kestrel years later. But then we thought, okay, let's try and do Monzo for Muslims an Islamic digital bank. But we weren't alone. There were a lot of other people trying this at the same time. This was 2019. Why did you think we could do something different at the time?
Speaker 2:Something different to them? To be honest, I don't think at that time it's something different to them.
Speaker 1:I think you mean the other Islamic the other Islamic, because there were loads of them at the time who didn't survive. So you have to remember when we start.
Speaker 2:There's none in the market like operating they were conceptual.
Speaker 1:Yes, so for me at that time.
Speaker 2:It's not about being different. It's about being first yeah, being I mean executing it well, right? So yeah, being first, yeah being I mean executing it well, right? So yeah, I didn't think about differentiation in it, okay thank you for listening to Muslim Money Talk.
Speaker 1:If you like what you've heard so far, you might be interested in checking out what we do at Kestrel, the Muslim Money app. Kestrel is a service that helps Muslims who want to grow their wealth without having to compromise, whether it's on their belief or user experience or price. I founded Kestrel because of how fed up I was at how poor Islamic financial services were in this country. Often people didn't use them because of how bad the user experience or customer service and indeed, how high in price they were. So Kestrel was the answer to that.
Speaker 1:If you download the Kestrel app today, it can help you by creating a budgeting plan. Plug in whatever bank account you have and it will create an auto budget just for you. You can then tell us what goals you're saving for, and we'll save towards them automatically into pots and then, crucially, link you towards Sharia compliant investment and savings products as well. So download Kestrel today and try it out for yourself. Now back to the podcast. Okay, but still looking back on it two guys, yeah, fresh out of an mba, yeah, thinking, yeah, we're gonna do this. Yeah, and about five million muslims in the uk, 50 of them over 18.
Speaker 1:We'll get 2.5 million customers in year one. Crazy talk, crazy talk. But fast forwarding a bit, we had some ups and downs.
Speaker 2:We tried to raise capital.
Speaker 1:I remember emailing close to 100 investors and VCs and we got responses from three of them.
Speaker 2:Two of them are flat. Pretty good. Response 3% yeah, 3%. Two of them are flat. No one of them asked flat. Pretty good response 3%.
Speaker 1:Yeah, three. Two of them are flat. No one of them asked to meet, and that was.
Speaker 2:Cambridge, angels. Not Cambridge, Angels but Cambridge Venture yeah.
Speaker 1:Cambridge. The university itself has a VC team for any new enterprises which are being created by students, and Horace Raffon, who's a friend of the show, runs Cordoba Capital, ex-deutsche Bank, ex-barclays, where he headed up their Islamic finance teams. He called us back on the day, if you remember, to talk through the idea and he gave us some really sage advice at the time which we definitely took on board Cambridge. It was seen as a bit too out there, not just because it was fintech and Cambridge loved science, but the Islamic thing.
Speaker 2:Do you remember their feedback? But the one thing that I took from that meeting that actually saved us is they advised us to take on a founding CTO.
Speaker 1:At that time, you have to remember, we had no developer experience.
Speaker 2:And their advice is never outsource this, and I think a lot of our competitors did that and from that meeting, even though we get a flat rejection right.
Speaker 1:Not a flat rejection, not a flat rejection. We've kept in touch with them ever since.
Speaker 2:But that advice I think is very invaluable, for sure.
Speaker 1:We didn't appreciate that, and then I think, we went through the YC Startup School, which is still all online for free, and they drum drum that into us that you have to have that tech co-founder, which, of course, we then found in the form of Irfan Radzi, our amazing and kind of crazy CTO. Okay, cool. So we met, we came up with the idea for Kestrel. Early business plan was just a digital bank we brought. We actually got some shareholders as well. So, alhamdulillah, people like Sultan Chaudhry, ex-ceo of Orion Bank, stella Cox, who runs.
Speaker 1:DD Cap, a few other well-known people in the industry managed to invest, and it was enough for us to say let's do this, yes, full time. Was that the tipping off point for you, because we graduated, I had gotten a job at pwc where I was working, but you, instead of going back home to malaysia to work on it remote, you stayed here in the uk yeah, so, but, but we promised ourselves six months, I remember that. So we're gonna try this for six months post-graduation.
Speaker 2:Yes, If you don't raise any money post-six months, we're just going to call it quits and go back to our job.
Speaker 1:In my mind at that time, you could go back to Bangalore, I could go back, and then I could of course find another job or whatever You'd done, your internship at Shell during the MBA.
Speaker 2:Yeah, so I think the worst case scenario is I lose it at that time. That's my calculation to it right, I still just recently graduated from Cambridge MBA. I think that's going to put me In with the industry. Yeah, so For me that's the risk Six months. And Okay, let's take that risk. And we managed to close Before the six months.
Speaker 1:Alhamdulillah we did, and I remember I got a massive amount Of respect for you During those six months Because, whilst I was living A relatively cushy life, I was single, I had no debt, yeah, I had like quite a comfortable job and I was, you know, building cash for at the same time, yeah, you were married, you had two children yeah, at that time I've got four now and you were doing odd jobs yeah, I mean, that's the only way to survive, right and you have to send money back um for the family to survive tell me about that time.
Speaker 1:What was it like psychologically for you?
Speaker 2:I think, because here's the secret right, when you don't have time, you don't have time to think, right so that's, very true so I don't have time to be depressed or anything. I'm just like in constant grind. Yeah, so you don't have time to entertain your mental state or whatever it is. You were doing food delivery. Yeah, in the morning I was doing like some cleaning at I think it's John Lewis, john Lewis in Cambridge.
Speaker 2:Yeah, in Cambridge, and then I go to the office at I think it's John Lewis, john Lewis in Cambridge and then I go to the office. I think at that time we were sacked yeah, we had got into the Cambridge Accelerator.
Speaker 1:Yes, so that was our first office.
Speaker 2:Yes, and that is the second time we applied right.
Speaker 1:I think the first time we got rejected first time, I think we didn't have much of an idea.
Speaker 2:I see, we got rejected.
Speaker 1:But second time we had a much firmer idea and business plan, which was still the digital bank. So we got an office there, yeah.
Speaker 2:So I went there do the work for Kestrel about until four or five, basically office hour, right and then after that I went straight. I go straight to food deliveries. Food delivery.
Speaker 1:Yeah, straight to food deliveries. Food delivery, and you sent your family back to Malaysia.
Speaker 2:Yeah, I sent my family back to Malaysia so you could go all in founder mode, yes, and also the the action street help right in term of odd jobs here and sending.
Speaker 1:And our friend was it Alpha? Yeah, gave you his car, so here that's a story for another day, right?
Speaker 2:so basically gave you his car. That's a story for another day, right? So basically got a friend, Alpha, Shout out to Alpha, right?
Speaker 1:Shout out to Alpha. He's on the NBA with us Indonesian. He's down here in London.
Speaker 2:Yeah, During the summer he got an I think internship or something like that in Amazon warehouse somewhere off-grid in Manchester. Oh really, yeah, something like that. That's why he needs a car. So he talked to me. He talked about renting. So he has to rent for about three months or two months or something like that, and the bill come out to $3,000 or something like that. Right, I told him, why do you rent? You just buy a cheap car. For Cheap old car, yeah, for $1 quid or something like that. They just get rid of it after that what was the car?
Speaker 1:it's mini. It was a mini, yeah it's a mini.
Speaker 2:So he yeah, I'll do that. So then when he want to go back, I'm still here. He just give it to me, gave it to you.
Speaker 1:Yeah, use that for that was a lif.
Speaker 2:But technically, I had a car.
Speaker 1:Oh, you still had your family car but then sold it off.
Speaker 2:Yeah, true, yeah, my family went back.
Speaker 1:So that six months was very different for the two of us, but then, alhamdulillah, we raised the funds. Yeah, we went all in. Then, bam March 2020.
Speaker 2:Yeah.
Speaker 1:COVID lockdown, covid lockdown, and that changed things. Yes yes, so we made the decision you would go back to Malaysia, yep, to be with your family. Yeah, I remember.
Speaker 2:It's one day before the, I think, the the lockdown here or something. I already hear the chatter About the lockdown.
Speaker 1:I remember you sending me A picture from Heathrow.
Speaker 2:Yeah, and saying this is it, man, I'm going.
Speaker 1:We didn't see each other For two and a half years. Yes, yes, yes yes, two and a half years. Yeah, but we spoke. It was weird because we would speak every day. Yeah, but you don't see these people, and then other players began to enter. Irfan came on as CTO. You found him.
Speaker 2:Yeah, Irfan actually came on.
Speaker 1:A little bit before.
Speaker 2:As in like a part-time CTO or something like that.
Speaker 1:But I think this right. When it comes to a co-founder, it's kind of like a marriage in a way it is. Right. But it's kind of more serious than that financially because you've got to be able to ride through the good times and ride through the bad times and deal with disputes and know each other's strengths and know each other's weaknesses.
Speaker 1:All for the shared vision, the shared idea. So it was me, you, you, my dad had come on board and we talked about his story when he was on a couple of weeks ago and why he did come on and a lot of our shareholders came on because he was there as well. But we needed that tech guy and Irfan was that person.
Speaker 2:Yeah, and he came through your network yeah, so the funny story is Irfan is off the same school as me. Like high school, he's a bit older than me, or a bit is an understatement.
Speaker 2:Mashallah, he looks much younger than both of us yeah, I'd say but yeah, mashallah is in his 40s now so I, technically, I only knew him as someone in the tech industry yeah, among my friends, right, because I don't think it was that popular 20 years ago. He started going into the industry 20 years ago, you have to remember, I think 20 years ago people see IT as a service, like a support service, right? So it's not as popular to become a developer like today.
Speaker 1:Maybe not in the East, but the dot-com bubble changed things in the western world. Yeah, in the 90s, the early 2000s. Suddenly people were like we could build whole industries around yeah, yeah, so not, not, not in malaysia yeah, yeah so yeah, so I only knew him.
Speaker 2:I know him. I knew him from school, right, but also I remember going to his burger venture because I'm interested in business. I just meet him. What was your impression of him? He's a what during that time, or now, during that time. I think he's capable, he's good at that time. He's already a CTO of a established company, a big company in.
Speaker 1:Malaysia.
Speaker 2:Yeah, so it's fine, but then he's a bit crazy, so I Actually I don't need to convince him.
Speaker 1:That was the thing that shocked me the most. How little convincing.
Speaker 2:Irfan needed.
Speaker 1:Yeah and subhanAllah. There's very few people like that out there. It's not about the money, it's like yeah, let's do it. It's about the mission and what drove him the most. And I think that's the big thing about co-founders yeah, yeah, yeah, If they're not aligned with your mission, whatever that North Star is and for us it's helping Muslims grow wealth without compromise.
Speaker 2:Actually just a side note. Right, If you are confounding a team and money is your mission, it's fine. It's just to be upfront yeah, as long as you have the same. Yeah, as long as everyone has the same goal.
Speaker 1:But if you have two people with very different, goals. One person is short-term money-minded and another person has got big picture, world-changing idea it's going to end in disaster nine times out of ten, nine times out of 10. And we went through the tech sales accelerator scheme. How many of those companies had co-founders who broke up? Yeah, I think 60, 70% of them.
Speaker 2:Yeah, yeah, yeah. So we saw it firsthand.
Speaker 1:Yeah, so we bring in Irfan. And then you guys took that advice from Cambridge and you built our tech team.
Speaker 2:Yes, in Malaysia. Yeah, that's where we spend our money technically, yeah right, um, we did no marketing, no, anything, right?
Speaker 1:so basically it's all tech spend we made the decision to make us different from other people. Everything is in-house, yes, which in the islamic says people were kind of outsourcing everything at that time which was cheaper for sure yeah, but we wanted quality and we wanted to ensure that Wanted to ensure that we have something right.
Speaker 2:So, yeah, I think that saved us. In a little year it did it, 100% saved us in a big way.
Speaker 1:But tell me because we got some really, really driven, really smart young guys who joined us in that house that your father-in guys who joined us in that house that your father-in-law gave us in Malaysia that we just lived in kind of Facebook style yeah, right in those early days you guys were literally building in a garage. Yeah, and you brought in Akif.
Speaker 2:Eiger.
Speaker 1:Eiger was number one. Yeah, akif came on as an intern, was Arif in there as well.
Speaker 2:Yeah, Arifin there.
Speaker 1:Who else was there in those early days?
Speaker 2:Naila was there, but not in the garage? Yeah, but in the garage it was like six or seven guys.
Speaker 1:Yes, yes, Tell me about that because I missed this. I was locked away in the UK during COVID. What was the culture? What?
Speaker 2:was the vibe. So these guys are known to Irfan, so Irfan is a bit like he's a figure in the Malaysian taxid, so he can call up people and so on, right, so they are all recruited from Irfan. And then we came in together, right, sit together because it's COVID. So luckily at that time these people are single, except for me and Irfan, right, so they can, like we give them a place to stay and work, right, and what's the vibe? Like I would say it's basically all boys, college or something like that. Right, it's very frat, it was a frat house. Yeah, that, right, it's very frat it was a frat house.
Speaker 2:Yeah, basically it's a frat house, yeah which worked at the time, which worked at the time because we were working until late night and so on. Right, the thing is about startup. Right, this is this is the, the conundrum, I would say. Right, reflecting back you for you to survive, you have to squeeze more out of little resources. Right, and these are the sacrifices that these boys have to make, because if we, if we basically budgeted like a corporate project, that budget not gonna go far right. So basically we have to squeeze more. Right, it's just the effort of that, like a corporate project, that budget not gonna go far right.
Speaker 2:So basically we have to squeeze more right it's just the effort of that that make the company survive what's your theory on hiring and finding? Good people. So my, my take right is always about the individual motivation, like your innate motivation. What is it in you that you wanna be there? The individual motivation, like your innate motivation. What is it in you that you want to be there? And for me it has to align, meaning that what we can offer and what they want align Right. For example, they want money. We can't offer money. I mean we can offer money but it's not money.
Speaker 1:I mean we can offer money, but it's not like it's not going to be commensurate with what you could get in a big corporate. Yeah, it's just a fact of a startup right.
Speaker 2:But if what they want is they want to build something right, they want to learn a lot of things, then it's aligned with our stage of growth at that time right.
Speaker 1:It must align, because there's only so much that we can do to motivate you we can't give you money, but we can give you an experience and an education super accelerated compared to a massive corporate, especially at that time, because things were changing like crazy. We were designing an app from scratch. At this point we realized the digital bank wasn't going to work yeah because we didn't have the funding for it.
Speaker 2:Plus, we'd seen a bunch of our competitors go down yeah, we, we run the numbers and we know that that's a secret sauce, that we are missing, but now we have it. Yeah, we have, which we'll talk about right at the end.
Speaker 1:Secret sources but we had become like a personal finance up yeah, budgeting auto saving. We had become like a personal finance up, budgeting auto saving. We had an investment marketplace that people could invest into Sharia screening, and the guys were building all this from scratch all in house, all our own tech our own IP so I think hiring is you're gonna make some mistake in hiring, so it's not gonna be perfect.
Speaker 2:But I do think Hiring is you're going to make some mistake in hiring, so, right, it's not going to be perfect, right. But I do think that I, especially in the early stage, we don't really hire for skills Because the way it's also the way Irfan built, right. So you have to remember, irfan is not a normal university graduate learn from the class and so on, so he learns everything off the internet or learn himself, right so we always have this principle that if you are smart enough I mean you have a decent IQ you can do problem solving.
Speaker 2:I can throw you anything. You have a decent IQ, you can do problem solving, I can throw you anything. You have the basic right and so I can throw you anything and you can learn the skills. The skills will get there, you will get the skills. But something that we can't teach is your drive.
Speaker 1:So we always look for drive so would you rather find someone with all drive, yes, but no skill?
Speaker 2:yes, in six months he will get better over there, rather than all skill and no drive. So here's the other thing about tech industry also, right, the skills could change. Next year is different skills, true, so you can't hire, can't see people as just skills? Right, you have to see them as a talent. Yeah, yeah okay, cool.
Speaker 1:So then obviously we'll fast forward. Cut the story short a little bit. We saw sort of consumer app, alhamdulillah was doing really well. Big banks began to reach out. Bank Islam Malaysia reached out and said can we white label the tech? And that's where us having the in-house tech team really paid off. Because now we could be B2B business-to-business software as a service, with our own tech team, our own IP we provide it to you. And we started doing that for banks.
Speaker 2:And that saved us during that period.
Speaker 1:I remember there was a point 2022, we were on our knees. Yeah, I think we were not drawing salary, for we had not drawn salary for six months yeah, something like that and we had three months of runway left, even without our salaries, and we were like we need, we need something.
Speaker 2:Something has to happen but the conversation already happened like. It's not like the three months it's done.
Speaker 1:I think the conversation is almost about a year or something like that we've been talking with this bank, bank Islam, only six months at that point yeah, only six months that they had approached us, but we didn't know if it was going to happen yeah and then things started to move. Things started to move and they said we need this.
Speaker 2:And I remember getting a call in my car from getting a call in my car from Zarin, who's our good friend over at Bank Islam and he said listen, arif, sorry it didn't come up in the board, so we can't get a signature.
Speaker 1:We've got to wait another month and I said, zarin, please can we get an advance, because we need it, and he was good enough to make that happen do you remember? We got that first advance and that saved us, that saved the company, and since then, alhamdulillah, it's because we've gone from strength to strength on b2b and now to a point where we can look back at that original idea yes, the original idea where muslims in this country, in the western world, are still so underserved when it comes to just having a good service level of islamic bank.
Speaker 1:Yeah, yeah, there's nothing fully digital, there's no monzo equivalent or revolution equivalent to for for the islamic world, and now, alhamdulillah, we have. Can we talk about this now?
Speaker 2:can we talk about it?
Speaker 1:you had to see you I, I can, we can definitely announce and we're going to make the full announcement.
Speaker 2:It's not gonna live. It's not gonna.
Speaker 1:It's live If you've got into this point of the episode. You deserve to know this. We will be launching a full digital Islamic banking offering this summer Inshallah Card scheme current account Sharia compliant return this summer. So a lot more to say on that. So do watch this space and if you do want to be one of the first first 1000 customers, please reach out to us, because we're being very selective with who that first batch of customers are.
Speaker 2:kestrel yeah, let's close the chapter on that okay, yeah, right what you want to talk about you've lived in the uk.
Speaker 1:You've lived in malaysia yes we're seeing a big trend right now of people saying the UK's light is dimming.
Speaker 2:Okay.
Speaker 1:Branding wise Before everyone wanted to come to the UK. Now every, not even just Muslim, but people in general. They want to move from the UK. People talk about the US. Muslims talk about Dubai. They talk about Saudi. What's your take on that?
Speaker 2:On people moving.
Speaker 1:Where should they go? What's your take on that, on people moving? Where should they go? What's a good place for a Muslim?
Speaker 2:professional entrepreneur. Where should they end up? I think it depends on the opportunities right. Not everyone has the choice to pick a place.
Speaker 1:Yeah, of course. But if you had to, if you had the dream, what I'm trying to tee you up here for a diagram is to say Malaysia is the place to go no, it depends on what kind of lifestyle you want.
Speaker 2:Lifestyle what's the lifestyle like in Malaysia? What kind of culture you want what is the lifestyle in Malaysia? Malaysia is, for me it's balance. You, you have modernity, like modern stuff and so on, right, but in that modern state you also, you are um, the family values are still intact, um, your, the culture creep in the modernity. So even if, like, you have like super twin towers or whatever right Huge twin towers, you can hear Azhar and it's not like. So we are trying to find ways how to? How do we practice Islam in modernity?
Speaker 1:I understand what you're saying. I think you're saying that a lot of the criticism that's levied against Dubai is that there's a lot of not very halal activity.
Speaker 2:You find that in Malaysia too? You can, of course. Yeah, definitely you can find pubs in Malaysia. The thing is it's not.
Speaker 1:There's a lot of non-Muslims who live in Malaysia. Yes, about 40% yeah 40% Big Chinese population, big Indian population as well. So the question is right, explicit, I think Explicit.
Speaker 2:I think it's not explicit, and this is the thing Right Nation state is new, right Nation state only existed About 100 years ago. They used not to be Nation state right. So Nation state like Malaysia.
Speaker 1:These things are new. Malaysia was Just part of Indonesia, part of Singapore, or one thing before it used to be kingdoms.
Speaker 2:Right, yeah, it's not defined by ethnicity or something. The British like to split up nation based on ethnicity or religion, whatever. But somehow Malaysia is not. It's multicultural from the inception inception of Malaysia, not inception of the land or whatever it is.
Speaker 2:So how do you deal with that Inception of Malaysia, not inceptions of the land or whatever it is. So how do you deal with that? Right? How do you as a country Deal with that? How do you accommodate Different needs, different wants, different religion In a country? I can tell you how, yeah, how you give people like 65 or 70 public holidays, as happens in Malaysia, different ones, different religion in the country.
Speaker 1:I can tell you how, yeah, how you give people like 65 or 70 public holidays, it happens in Malaysia. It's our biggest thing is oh okay, are we going to have the meeting today?
Speaker 2:in Kestrel, or is it going to be another Malaysian public holiday? Come to Malaysia, there's a lot of public holidays.
Speaker 1:There are. They celebrate the Islamic ones, the Chinese ones, the Indian ones, the Buddhist ones, the.
Speaker 2:Christmas, easter, even from an Islamic perspective, right, I mean, it's another problem. You have like 99% Muslim population. It's easy to say, okay, sharia law.
Speaker 1:Yeah.
Speaker 2:Right, but when you have 60, how do you manage that? How does Sharia law likeact with the common law? For example, malaysia have a Dual law system, Basically the common law and the sharia law Right.
Speaker 1:But Under Sharia Caliphates.
Speaker 2:Of old Sharia caliphate, caliphate, caliphate yeah.
Speaker 1:Under caliphates of old. There were many non-Muslims who lived within that system.
Speaker 2:Yeah.
Speaker 1:And there were dual Rules for different people, like, yeah, muslims had to pay as a guard tax, yeah, but then non-muslims had a different tax that they paid but you don't.
Speaker 2:You don't do that in the nation state, right? Because everyone is a citizen to that country. So the concept of nation state you are. You are not bounded by your religion. You are like. You are not muslim per se, you're malaysian.
Speaker 1:I want to ask you about that I don't know if you're comfortable talking about it, but one thing in malaysia that's always struck me. It doesn't anymore, but in the early days it struck me as a little bit different. There are the different I guess different rights that the original ethnic population of malaysia, yep, the malays, have compared to the non-ethnic malaysians, the indians, chinese expats, what have you?
Speaker 1:yeah, and you guys, you refer to yourselves as bumi, bumi, putera people of the earth yes, um, and you guys have slightly different rights and that kind of protects protects you guys to the outside. Sometimes it can look a little a little funny or maybe a little bit like okay, it's segregated or there's special rights for that community. But you explained it to me very well so I'd like for you to do that too.
Speaker 2:Yeah, so I'm not defending or anything, I'm just putting in the context right so in the during the formation of Malay state, basically after the independence of British the, that's came out the question of citizenship. Right, who is, I mean, the citizen of Malaysia? Right, the Chinese and Indian were brought by the British to work in Malaysia. They were never like a they weren't already there yeah, they were brought over by colonial times yes, so?
Speaker 2:so do we accept them as citizen, or what right? So I think at that time, and economically, you have to remember, the majority, which is the Malays as a group, is a lot poorer than the Chinese.
Speaker 1:Why is?
Speaker 2:that Because the Chinese work on usually they, I mean, I think they work on the businesses a lot more, like in the cities, like they are Chinese. There's a thing about the Malay that British cannot get their head around race. They can't get the Malay to work Right. What do you mean? Meaning that they are not like I want more. I want more, I want more, something like that.
Speaker 1:They weren't motivated by money. Yeah, so career progression, so you have to see.
Speaker 2:They already have land right, they are land owners right, they fish, they farm, they farm. So they got all they want, right? Why do I need more right so to to develop the economy, what we call economy? Now, right, the British bring in the Chinese to work on this mines and so on, so they become like business they began to aggregate more and more wealth, more so inflowing to them.
Speaker 2:So if you look at the distribution of wealth at that time, so the Malay, as the majority group, is basically poorer. So when you have that situation for stability, that just is not going to work right. And that's also come up with the citizen questions and so on. So the Malays were like why are we giving them citizenship? And so on. So the rights were the compromise.
Speaker 2:And the rights include what the rights are actually the in the constitution. They have, I think, better right to scholarship. I think land it's not like the Chinese cannot own land. There's barriers, there's Chinese cannot own land, that's like there's barriers.
Speaker 1:Yeah, there's some barriers, there's more hurdles to jump, something like that.
Speaker 2:That's the original one, but of course, as as as things progress and so on, the interpretation Become something else, and so on right.
Speaker 1:Can people marry into it? Like if someone marries a Malay, do they get the same?
Speaker 2:I think the kids can get the kids too, yeah depends. I can't.
Speaker 1:You're not a lawyer there's a religious element to it as well. Yes, so they define.
Speaker 2:Yeah, they define the Malay in the in the constitution as I think Muslim practice, malay culture, so something like that, so technically, and also in Malaysia. There's also a question right in Malaysia a Malay cannot convert into Christian or so whatever can't leave Islam.
Speaker 1:Yep, that's not in Malaysia, that's anywhere in Islam but as a nation state right oh, it's enforced. Yeah, so you?
Speaker 2:can't go to the legally like because we have our religion in our it's enforced, yeah. So you can't go to the legally like because we have our religion in our identification card. Right, you can't change that.
Speaker 1:Really yeah On your.
Speaker 2:ID card. It says Muslim. It says Islam, islam. Yeah, wow so.
Speaker 1:I understand it. I understand it and I think we saw a lot of race-based riots in the uk. Whether people want to call them race-based or not, I think that's ultimately what it was about I do, to be honest, I kind of empathize with the local like english population and that a lot of them feel like yeah, they've lost their wealth, yeah they've lost their jobs.
Speaker 1:They've, you know, and they're, they see, an immigrant population. Even though I was born, born here, my father's been here, even people who've been here for two, three generations. They see people coming in amassing wealth for whatever reason. I really think it's been pushed from the top that immigration is the problem as opposed to tax and other things which are causing wealth to be held by certain classes At the top. But Malaysia, to prevent that, got ahead of it and they built in certain Protective rights For their local population.
Speaker 2:But then come the question these Chinese and Indians they are. They are like Three, four generation already. They are Malaysian, they're still there, they're still there. Already they are Malaysian, they're still there, they're still there. They are now Malaysian, like pure Malaysian. In the early days they are Chinese, they can go back to China, for example, the motherland or something like that. Right, but now they are like they can't go back. So now, so it's now. The conversation is do we still have it or is it time for us as a nation to move on?
Speaker 1:culturally they're pretty much embedded. The main difference is Islam. Yes, that's the big thing.
Speaker 2:I mean it comes with different cultures also, right yeah so here's the thing if you compare Malaysia and Indonesia, indonesia also have quite large population of Chinese or other things like other races and so on, right, but Indonesia take the approach of assimilation, so it's forced upon them. So that's why a lot of them cannot speak Chinese. They speak in Indonesian, right.
Speaker 1:It's forced yeah.
Speaker 2:And even the name they have to sort of change.
Speaker 1:And English isn't the language of business.
Speaker 2:Yeah, english isn't the language of business, but in Malaysia you are allowed to have Chinese schools, indian schools and so on. So the culture is present, so let me ask you this for thinking I want to do hijra and I want to move from the uk to malaysia.
Speaker 1:Is it easy? Easy in terms of what you can fly in.
Speaker 2:Lifestyle wise, lifestyle wise yeah, I think for british it's easier because we are a former colony of british I am colony whatever you want to call it right. So a lot of systems are british based. Yeah, we drive on the same um side right.
Speaker 1:English is the language of business.
Speaker 2:You have British schools.
Speaker 1:What's the life?
Speaker 2:like the life is. I think it's good. Of course, for me it's good, right. You've got everything you want, right. You've got your holidays inside the country. You've got your work, your opportunities. I think it's a great place for family. I think it's a great place for a family.
Speaker 1:I think it's a fantastic place for a young family. I've been to Malaysia so many times. Of course, most of our team are based there. The only thing that prevents me is how far away it is from the UK we can't cheese. That it's far. It's far, and I like the GCC because it's relatively central to my world. Different lifestyle, very different lifestyle.
Speaker 2:Very different lifestyle.
Speaker 1:I think if you're young, you're single, you're a young couple, uae has its appeals. Yeah, yeah, if you have the privilege of going there, if you have a young family, malaysia has a very different appeal yeah, yeah, okay, okay, cool. So I want to ask you this, because you're an economist by training, yeah, by training. We were having this debate in a coffee shop the other day.
Speaker 2:We always have debate. Five years of debate.
Speaker 1:Five years of debating what does the ideal Islamic economy truly look like? Because we've got places like Malaysia, pakistan, turkey now trying to make more and more moves, some of them moving away from fiat and going into crypto. Some of them are saying maybe we should look at a gold-backed system again, instead of how many people decoupled the fiat currency from gold. What is a truly Islamic economy? Can we take examples from history, from the caliphates of old, and I draw an example from he's often called the fifth true caliph of.
Speaker 1:Islam but Umar ibn Abdulaziz, where during his time he was seen as one of the great reformers of Islam and the reason he's called one of the fifth caliphs, even though he wasn't fifth he was like eighth in the Umayyad dynasty around 717 to 720.
Speaker 1:He only had three short years in rule, but he introduced so much change in his time, so much governmental change, that it got to a point where it almost seemed like poverty had been eradicated under the Islamic empire at this time, and it stretched from Persia to Andalusia to Egypt. But they could not find a single person who could accept Zakat payment and Zakat for people who don't know. I call it a welfare tax right. 2.5% of a Muslim's net wealth is taken and given to Muslims in need. But they could. They had a surplus of zakat where they were collecting and they couldn't actually find anyone to give that to, which is crazy. And it's a crazy start for this time where you have Muslims who, in this country, 50% of Muslims live below the poverty line. They struggle to pay at least one of their bills. They're using food banks, and that was research done by Islamic Relief and Muslim Census.
Speaker 2:How have we fallen so far, and what should we be doing? Can we emulate and learn lessons from them? Um, just a disclaimer, I'm not a scholar or anything like that, right, but one day he's gonna do a phd.
Speaker 2:He's gonna do a phd in this so your original question what is a True Islamic economics Right? So the term economic self Is New, I mean Relative new, right, it's not like During the Prophet there's a term Economics. So If you look at Like one of the Earliest Writing about Islamic economics, abu Abu Abu Al-Maududi, basically. So if you look at his writing, it's all about principles and you have to remember our situation is different from the days of the prophets. I'll give you one example we, the invention of I'll give you one example we, the invention of private limited company, actually changed the game in economy, right, because you are no longer an individual, it's a legal entity private limited company.
Speaker 1:You're no longer responsible as an individual. If something goes wrong, it's your company's responsibility.
Speaker 2:And it's basically creating another human right. So you can't do that during the time of a profit, basically right, if you're a business, you are an individual.
Speaker 1:Yeah.
Speaker 2:Yeah, it's no like. There's no like demarcation of that. So how is it? And your question come back to currency, right? Um, gold, fiat and so on? Um, I understand it's a. It's a huge factor in how the economy works, but, like anything in islam, right, it come back to um, individuals, right, tarbiyah is very important because we are individual actors. You can have, like, superb system or whatever it is, but the individual responsibility towards gods and towards humanity is still there, right? For example, like you talk about khalifa and so on, khalifa, umar abdul aziz is a good example of is still there, right? For example, like you talk about Khalifa and so on, khalifa, omar Abdulaziz, he's a good example of of a very good Khalifa, right, but you can find multiple examples of very bad Khalifa.
Speaker 1:We need the same system for sure, yeah, for sure, all of the Umayyad leaders before then.
Speaker 2:I don't want to say all or whatever.
Speaker 1:Before then, most of them they were not known to be the most pious of leaders let's put it at that let's leave it like that to the point where, when he came in, people were like this is a breath of fresh air so is it the system or the person? It seems like what you're getting at is that.
Speaker 2:So we can have.
Speaker 1:What I'm saying is, we can create a device Like the most perfect system, but someone the leader who comes in at the top Completely destabilise that.
Speaker 2:And that's why, in Islam, you have to know your God as individuals, it's not the system. Know your God, you yourself as individual have to be responsible. So for me, I mean my opinion system. Know your God, right, you yourself as individual have to be responsible, right. So for me, I mean my opinion for an Islamic economics, for a truly I won't say truly but for us to have a fair, justice economic system, the population itself have to have Tauhid, and so on and so on. Right, the population itself have to have tawhid, and so on and so on. Right, have to be responsible individuals, right. And I think another, I mean in even in our, our, our mauludi books, right. One of the key principle is just fairness. Fairness is it's not a system, right, it's just fairness. Yeah, right, it's not a system.
Speaker 2:Right, it's just fairness. Yeah, right, it's not a system. So what's fair? Fair?
Speaker 1:It's quite subjective, yeah, is it subjective.
Speaker 2:It is subjective.
Speaker 1:For something to be fair and equitable. You can put objective limits on that.
Speaker 2:Yeah, but it is subjective. I think it's subjective to be fair right, and you put in government controls and so on. Right, but to say what in an Islam economy?
Speaker 1:I don't know man you're not giving me the answer.
Speaker 2:I'm looking for I thought you were going to say we need to go back to a gold back system.
Speaker 1:Maybe crypto can be the real answer to it.
Speaker 2:Okay, if that's question right. So if we take the um, we dive, we dissect the question. Uh right, is gold? The answers right. Um, my question to you during the time of gold as a currency, is there poor people? For sure of course, so is that the answer?
Speaker 1:it's's not the answer, but I think people like gold and Muslims like gold. Yeah, the idea of the dinar and dirham were based on gold and silver and they themselves weren't. I don't think they were made out of gold. They were originally.
Speaker 2:Dinar and dirham. They were.
Speaker 1:But a gold-backed system is anti-inflationary. You can't invent more gold. Yeah, you can mine more gold, you can mine more gold.
Speaker 2:It's harder to do that. We keep finding more gold in this world, yeah, but there's a real physical and energy requirement in order to do that.
Speaker 1:You can't just print money. 30% of all US dollars in circulation were printed during COVID right. Which, like the cost of living crisis, never went away right. Everything's going to be more expensive forever now, because that happened and that's insane you know whereas when something is gold backed and finite it, it has like a check. There's like a checks and balance process in there that it prevents excessive governments from doing things like that, do you?
Speaker 2:know what I mean? Yeah, but it comes with its own problem, right? So so you think so, if you, let's say right, you, your thesis is because it's finite or it's only grows certain numbers a year or something, we can put that in a system of fiat currency.
Speaker 1:You can put in controls, you can say, a control that we're not going to go above this amount.
Speaker 2:True you could do that so. So if you look at gold, right gold, what derive the value of gold? What derive the value of gold?
Speaker 1:it's people's perception. Yeah, it's people's perception, it's purely people's perception.
Speaker 2:Yeah, true so it's not utility right. Why not utility right? Why not uranium or?
Speaker 1:whatever right, people like it, people like gold it has you know a lot of traditional.
Speaker 2:Yeah, yeah, because it's stable.
Speaker 1:It's stable, it looks nice jewellery, all that kind of thing. People have been in love with it since maybe the beginning of time.
Speaker 2:But you have to remember gold is basically a rebate item. Basically it's a currency, right? You can't buy. That's why you can't do FX. That's how you derive. You can't do like FX. You can't do deferred FX. You have to be spot right Because of gold. So gold is a currency. You can't buy gold in a deferred scheme. You have to buy in spot on, spot right.
Speaker 1:But you can buy cattle or sheep in deferred right. So what you mean is, I'll pay you now and receive the cow in a year's time. Yeah, you can, but you can't do that with gold because the price fluctuates so much.
Speaker 2:Yeah, because it's a currency. It's not goods time?
Speaker 1:yeah, you can, but you can't do that with gold because the price fluctuates so much.
Speaker 2:Yeah, because it's a currency, it's not goods, so you have to remember the concept of currency it's not a currency, ah, so what is the currency?
Speaker 1:a currency is something. What's the three definitions? It's easily transferable. It's a store of value. It's a measure of value, right?
Speaker 2:gold is not easily transferable. What is the currency during the profit time?
Speaker 1:the little coins that were created, the dirhams, which were gold and silver.
Speaker 2:They were gold and silver so why do you think gold is a ribawi item?
Speaker 1:what do you mean by?
Speaker 2:ribawi item. So ribawi item meaning that you can't. You have to trade gold on spot right. Why table is you? You can buy table on deferred. Why you can't buy gold on deferred?
Speaker 1:because the price could change massively.
Speaker 2:So you, can make a massive loss.
Speaker 1:This price can change. This price can change. Yeah, true, because of scarcity, because of inflation all of that.
Speaker 2:Yeah, any price can change.
Speaker 1:Then everything is a robo-y item, if that's the definition.
Speaker 2:Yeah, so that's why. Why it's specifically on gold? Because it's a currency. It has no utility. It's a representation.
Speaker 1:It has no utility of its own.
Speaker 2:Yeah, it's a representation of the economy.
Speaker 1:So what you're saying is we have this love affair with gold that we shouldn't have.
Speaker 2:I don't gold that we shouldn't have. I don't see that we shouldn't have. But is it the answer? I don't know. Man, we always go back to, I mean to our good time, for example. Right, we think gold, it's engrained in us the golden age of Islam yeah, something like that. Right and want to replicate that, but is it the?
Speaker 1:answer for the modern world? I think it can be an answer right now. It's an answer to massive inflationary tactics. It's an answer to people who are keeping their money in current accounts because they can't generate interest, because they're Muslim, and it's getting destroyed destroyed by inflation. Storing your money in finite assets like gold or bitcoin yeah, but that becomes your basically investment vehicle.
Speaker 2:Yeah, it becomes an asset, but not a currency. But what?
Speaker 1:about the, the idea of the gold linked card, the gold linked debit card, where suddenly you're pegging your currency yeah to a real asset, to gold to solve the systemic problem it doesn't solve the systemic problem, but if enough of us did it as Muslims, we could solve the problem of how many Muslims are living below the poverty line in the western world. Wow, more and more people are able to combat inflation, they can store wealth and they can grow their wealth yeah by taking advantage it's already available right.
Speaker 2:By taking advantage it's already available right. I mean you can store your money in gold. I mean now with digital gold. I mean you can buy like, like not even 1 gram 0.7 gram or something like that right and it's Sharia compliant and so on, but I do the thing.
Speaker 2:The thing that I find fascinating is finance is not the answer to everything. Right, you want to live poverty, you need real economy, you need real jobs. Finance supports role of finance, is always supporting and should be supporting and shouldn't be an economy of itself. He says, whilst we're sat in London, which and the UK, which is entirely propped up by financial services.
Speaker 1:yeah, that's right. So how? And it shouldn't be an economy of itself, he says, whilst we're sat in London and the UK, which is entirely propped up by financial services? Yeah, that's right.
Speaker 2:So how do you finance right what is finance?
Speaker 1:We need to be producing real goods. Yeah, it's about Finance. Is meant to be the lubrication of the wheels or actual creating goods and services.
Speaker 2:In the age of profit, profit itself, with some sources say that his venture with Khadijah is a mudarabah Right, technically a finance scheme.
Speaker 1:That's true. Khadijah Radhi La'ana was financing Rasulullah's trade missions.
Speaker 2:Which is a real economy. So finance has to support the real economy. I think that should be the immediate goal of Islamic finance right to support whatever you do support businesses, support businesses, support whatever. It is not just financialization for the sake of it, right? So if you try to find answers in finance, you'll hit a brick wall. Yeah, in your opinion. In my opinion, the answer is in economy. True, how you grow the economy.
Speaker 1:It's not only finance and that's why I'm a big advocate for the concepts of the Muslim pound or the Muslim dollar, or whatever you call it. Where the circular economy, people invest into Muslim-owned businesses, they buy from Muslim goods and Muslim-produced things and they support businesses.
Speaker 2:Yeah, my take on that is, for example, zakat right.
Speaker 1:Yes.
Speaker 2:You'd call it a welfare tax. I don't see it like that because, if for me, right the way I see it I mean everyone has different experience and different knowledge, so have different opinions on it For me it's a tax for not spending money, for accumulating assets.
Speaker 1:Zakat is a tax for not spending money.
Speaker 2:And accumulating assets. Why? Because, Because if you want the economy to grow, you have to keep spending money.
Speaker 1:Okay, so you pay tax on assets which are sat idle. You pay zakat on assets that are sat idle in cash or gold or whatever it may be.
Speaker 2:It's never on income right.
Speaker 1:But if you invested that money?
Speaker 2:If you spend it, you buy things from other businesses you don't have.
Speaker 1:You buy homes. You buy property, you put it into your own business.
Speaker 2:You buy other people food or have. You buy homes, you buy property. You put it into your own business, into your own business. You buy other people's food or whatever. You don't get tax or whatever.
Speaker 1:Very good point.
Speaker 2:So, and there's an ayat in Quran. Can't remember the exact translation or the exact ayat, but basically the message is Don't keep the wealth within yourself, within your group. Keep it circulating, right.
Speaker 1:So yeah that's what I was saying.
Speaker 2:I don't have an answer, but it's always principle economics, islamic economics, it's always principle it's not rules based. It's not the rules.
Speaker 1:Are fairness Sharia compliant and perhaps the wisdom in that is that we're all going to be experiencing different things. Yeah, and we, I think often we get hung up that, oh, everything's in an interest-based system anyway. So how is this really islamic? How is this mortgage really islamic? How's the savings account really islamic? Yeah, but this is the situation we're dealing with. This is this is the thing. Right is, how is the savings account already Islamic? Yeah, but this is the situation we're dealing with.
Speaker 2:This is the thing right. Islamic might not be the right word. It is Sharia compliant. So whether so Islamic is like a subjective thing that some people find it not fair some people find it fair and some people find it not Islamic. For example, like, let's say, you want to buy a house, right. Basically now it's a mortgage. Some people might say the bank should give at 0%, right. But for the bank it's not fair. They have a cost, they have people to pay, Of course. Yeah, it's a business and so on right.
Speaker 1:How's it going to work? And?
Speaker 2:it's over business and so on, right, how's it gonna work? And it's over 20-30 years. But I do agree that the system make like the price of assets always going up, right, because of the system and so on. True, yeah, but that's one problem right.
Speaker 1:Yeah, inflation is something we can deal with. Yeah, okay, we're running out of time. Yes, but very quickly. Yeah, what are your hopes For Kastrol? What do you want to achieve as an organisation, and Both in Malaysia?
Speaker 2:And in this country. Yeah, to be honest with you, when I started this, right, the, the key reason why I wanted Wanted to do this Is For it to be a deed that allows me to stand before God and say that I've done something. That's all. So, for my hope with Kestrel is that for us to do something to make a dent in the community. It could be something that become a start to something bigger. Right, it could be another company take this on and become something bigger, and I would be happy if I know that we inspire or we allow that for that to happen. We don't know what's going to happen. For example, let's say we, let's say you say about the debt based system and so on. Let's say we start this with the current account and so on, and we accumulate deposits that now allow for different models to be explored, and so on.
Speaker 2:I don't know what it is, but it's allow. It allows the Muslim community all over in in the west to accumulate assets, participating in the economy and so on.
Speaker 1:That's all I want so yeah, that's pretty much it okay making a dent, however, we can. Beautiful message for a beautiful episode dying. Thank you so much, thank you, thank you hearing me rambling? I think it will come out really well.
Speaker 2:Thank you for listening to the muslim money talk podcast.
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