Hejaz Group secures €100m in Sharia-compliant financing for underserved Islamic SMEs

Australia's leading Islamic financial services provider Hejaz Group has secured a €100 million ($185 million) funding facility from a UAE-based private wealth group, allowing it to extend its offerings beyond its mainstays of pension funds, exchange traded funds (ETFs), real estate and personal asset management.

The funding milestone will enable Hejaz to expand its Sharia-compliant financing solutions, catering to the growing demand across property, auto, SME, commercial, and development finance in the Australian market.

Sharia-compliant lending refers to financial practices that follow Islamic law, prohibiting certain conventional elements of finance. This means no interest, contracts must be clear and certain, and there is to be no investment in forbidden industries such as alcohol, gambling, pork, or anything deemed unethical in Islam.

The last Australian Census in 2021 revealed a 0.6 percentage point rise over five years in the share of Australians identifying as Islamic, reaching 3.2 per cent or close to 814,000 people.

Hejaz describes the funding as a "significant leap forward" for Islamic finance in Australia, ensuring the country's expanding Muslim communities have greater access to financial solutions that align with their values..

"The demand for Sharia-compliant financial products in Australia has surged, driven by a growing population seeking alternatives to conventional finance," says Hejaz Group CEO Hakan Ozyon.

"This funding facility allows us to meet this demand at scale, supporting home buyers, business owners, and developers while ensuring access to responsible finance solutions."

Hejaz expects a ripple effect to be felt from this capital injection, particularly in real estate and SME lending where access to Sharia-compliant funding has historically been limited.

The group currently has around 30,000 customers and a portfolio size of more than $3 billion.

Hejaz has five listed assets - the Hejaz Sukuk Active ETF (ASX: SKUK), the Hejaz Property Fund (ASX: HJZP), the Hejaz Equities Fund (ASX: ISLM), the Hejaz High Income Active ETF (ASX:HJHI) and the Hejaz High Innovation Active ETF (ASX: HHIF).