TOKYO -- SBI Holdings has set up an Islamic financing fund for Southeast Asian corporations, aiming to capture growing demand for funding aligned with the religion's principles in countries such as Indonesia and Malaysia.
The Tokyo-based financial services company's fund is expected to total a maximum of 10 billion yen ($97 million), with investments from the Brunei government and the Saudi Arabia-based Islamic Development Bank. SBI will call on additional investors to pitch in to eventually hit the 10 billion yen mark.
Contributions will range from a couple hundred million yen to 1 billion yen per company. The fund is currently considering three to four businesses in such industries as biotechnology and food processing.
Islamic financing follows the principles of Sharia law, under which charging interest is banned. In many cases, the financing involves purchasing company shares, which gives the funder access to a portion of the business' profit. With the new fund, SBI aims to attract previously untapped high-growth companies in the Islamic world.
SBI and Brunei began the first such fund back in 2010. The roughly 5 billion yen vehicle invested in such businesses as major Indonesian logistics company Pandu Siwi Sentosa. On the back of that fund's success, SBI has established another fund on a larger scale.