IsDB’s IRTI partners with Samsung-backed Blocko’s E24P

By Edil Corneille

Islamic Research and Training Institute (IRTI), a research arm of the Islamic Development Bank Group (IsDB), has partnered with Blocko, Samsung-backed blockchain technology firm, for the development of a blockchain-based smart credit management system. The credit enhancement system is expected to minimise the risks associated with credit financing to businesses and consumers. The system will use new economic incentive models and advanced implementations of hybrid blockchain technology.

The collaboration is a part of the blockchain giant’s E24P initiative which focuses on delivering solutions across the Middle East, Africa and Southeast Asia. The objective of the partnership is in alignment with IsDB’s commitment to enable greater financial inclusion, alleviate poverty and accelerate the development of the Islamic finance industry.

Dr Sami Al Suwailem, Director General, IRTI elucidated, “The Islamic finance market is growing rapidly, with projections of a rise from around $2 trillion to an impressive $3.78 trillion by 2022, yet certain technical and economic challenges have prevented the industry from truly flourishing. Our new partnership with E24P aims to address this by providing the infrastructure needed for the Islamic financial industry to deliver critical financing to both the developed and developing world.”

The smart credit management system being developed by IRTI and jointly implemented by E24P, provides an incentive mechanism that encourages early repayment and contributes fees to an insurance pool that covers loan defaults.

Phil Zamani, CEO, E24P expounded, “…The implementation of blockchain systems in complex processes like credit and insurance has long been sought after by financial institutions around the world. Forward-thinking GCC countries, such as the UAE and Saudi Arabia, have been especially progressive, implementing blockchain projects to accelerate their digital transformation agendas and smart city innovation strategies.

“However, many blockchain projects fail to move past the initial proof of concept (POC) stage due to a lack of end-to-end systems design know-how, coupled with the practical implementation of blockchain technology in highly complex industrial environments. The E24P team has a proven track record, having already deployed over 38 large-scale private and government blockchain solutions, and this execution intelligence is needed to bypass costly, drawn-out POCs to fast-track to business value implementations.”

The patented smart credit management system will utilise Aergo hybrid blockchain technology developed by Blocko to execute smart contracts. This technology will enable both Islamic banks and other financial institutions to perform credit assessments in an autonomous and integrated way while maintaining transparency, security and privacy for all parties. It will ensure credit assessments are performed in a provably transparent manner while keeping the data and methodology used appropriately secure and confidential, using zero-knowledge proofs.