KUALA LUMPUR (June 19): Technology empowerment company Sedania Innovator Bhd expects income to start coming from recently acquired Islamic FinTech platform provider Sedania As-Salam Capital (SASC) as early as the second half of financial year ending Dec 31, 2017 (FY17).

At the extraordinary general meeting today, shareholders approved the SASC acquisition for RM12 million, whereby RM4 million will be by cash, and RM8 million via issuance of 25.8 million new shares at 31 sen each.

Under the acquisition, SASC would provide a minimum profit guarantee of RM1.5 million per year for FY17 and FY18, it added.

The company said the acquisition is expected to be completed within 3QFY17, and to contribute positively to Sedania in 2HFY17 onwards.

Since 2010, SASC has provided the As-Sidq system, a Tawarruq commodity trading system that utilises prepaid telecommunication airtime credit as the traded commodity based on Syariah principles, said Sedania in a statement today.

“The electronic and fully-automated As-Sidq system is currently utilised by 21 financial services companies in Malaysia, including financial institutions and cooperatives, to facilitate Islamic financing to customers,” said Sedania.

To date, As-Sidq has processed more than 300,000 personal financing transactions with total worth of more than RM25 billion, it said.

“This acquisition is exciting for SEDANIA Innovator, because we are now able to bring this proven and emerging FinTech platform to revolutionize the Islamic banking sector, not just in Malaysia but also beyond our shores,” said its managing director Datuk Azrin Mohd Noor.

“Being a part of a listed entity would boost confidence in As-Sidq amongst current and potential clientele, and open the door to offer beyond personal financing, into hire purchase, mortgage, credit card as well as deposits,” he said

“We are actively engaging with various financial institutions, and target to increase our customer base from 21 to 25 by year-end to further strengthen our position as Malaysia’s premier FinTech player in the Islamic banking sector,” he added.

According to the independent market research report, the personal financing market under the Islamic banking system in Malaysia was valued at RM28.8 billion in 2016, amounting to 41.7% of the total personal financing market, it said.

It said industry reports have also indicated Islamic banking’s growing popularity across other sectors, where the deposits segment was expected to reach RM2.2 trillion by 2020, mortgage and hire purchase valued at RM327.3 billion, and credit card at RM3.7 billion by the same time.

Datuk Azrin said that Sedania’s entry into the FinTech space formed one of the Group’s pillars in empowering users with cutting-edge technologies.

“With FinTech now in place, our growth will be propelled by this emerging technology alongside other existing components of AirTime Share, Internet of Things, Green Technologies and Big Data Analysis. SEDANIA Innovator has now entered our high-growth phase to sustain our performance going forward,” said Azrin.

Shares in Sedania closed half a sen lower or 1.56% at 31.5 sen, giving it a market capitalisation of RM62 million.