Client Name

Bank Alfalah

Faculty Advisor

Dr. Nida Aslam Khan

SBS Thought Leadership Areas

Islamic Business and Finance

SBS Thought Leadership Area Justification

The thought leadership our ELP project relates to, is Islamic Business and Finance, as this Islamic BNPL was launched by Bank Alfalah Islamic, as operating initially under the model of Qard, which is derived from Islamic finance. Similarly, the suggested alternative modes of Muswamah and Murabaha are also Shariah-compliant mechanisms, thus relating to Islamic Finance. Moreover, the marketing plan was constructed, keeping in mind the fact that it would be subject to Shariah board’s approval in terms of avoiding the use of music in advertisements and not investing in non-Shariah compliant industries. Therefore, these considerations, along with our consultations with Islamic scholars of the industry for advice regarding our tasks, is the main reason this project falls under the category of Islamic Finance and Business.

Aligned SDGs

GOAL 9: Industry, Innovation and Infrastructure

Aligned SDGs Justification

The current project of Alfa BNPL, relates to the Sustainable Development Goal (SDG) of Goal 9, which is fostering industry, infrastructure, and innovation. This digital product is innovative because it is Pakistan’s first ever Islamic BNPL product. Even though conventional counterparts of BNPL exist, such as PriceOye and JazzCash, however, Alfa BNPL differentiates itself by offering the innovation of charging no additional amount from the customer as if charged under the current model of Qard, it would fall under Riba, which is strictly prohibited in Islam. Therefore, this newly launched, first ever, Islamic BNPL offers innovation in terms of providing betterment for both sides of merchant and customer. The merchants gain as their sales skyrocket, now that consumers don’t have to make full payment, so that their revenue increases. Similarly, customers get the benefit of not having to pay an upfront payment of the full amount, as well as getting the flexibility of paying the total amount in installments as per their comfort, while not having to worry about getting charged any hidden fee or processing fee.

NDA

No

Abstract

This report provides detailed insights into Bank Alfalah Islamic’s newly launched digital product, Buy Now Pay Later (BNPL). It covers various aspects of Shariah-compliance, mainly on the implementation of Islamic finance principles such as Muswamah acting as a replacement of the currently used structure. Moreover, the report stresses upon various factors that make Alfa BNPL unique, such as its Islamic nature gives it a competitive edge from its conventional counterparts. This project analyzes how Bank Alfalah incorporated latest technologies to launch this innovative product solution before its competitive Islamic Banks. However, as Alfa BNPL has failed to match its financial potential, this report highlights several reasons for its low profitability, and consequently provides recommendations in the form of an extensive marketing plan. Additionally, a holistic BNPL user journey is provided which is improved in terms of complexity and aesthetics. We hope the findings of this report makes positive contributions in the field of Islamic finance.

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

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