AI-Driven Islamic Microfinance in West Africa
Founded: 2010
Headquarters: Nouakchott, Mauritania
Industry: Microfinance
A leading Mauritanian provider of ICT infrastructure and digital services identified a pivotal opportunity at the intersection of technology, ethics, and inclusion: to deliver Sharia-compliant finance to millions of under-served individuals across West Africa.
The vision was to establish a digital-only institution providing equitable, interest-free capital in full alignment with Islamic principles. To evolve from a technology enabler into a regulated FinTech leader, the organization partnered with Finpace. Leveraging its proven expertise in scalable banking infrastructure and regional market dynamics, Finpace helped lay the foundation for a new model of financial inclusion that is intelligent, compliant, and sustainable.
The challenge
The West African microfinance landscape is defined by limited credit visibility, fragmented regulatory structures, and a scarcity of reliable data. Addressing these conditions required more than digitization; it called for a fundamental shift toward ethical, scalable credit models that uphold both compliance and commercial viability.
Three structural challenges shaped the initiative:
1. Sharia compliance at scale. Traditional microcredit relies on interest, which is prohibited under Islamic finance. Expanding profit-sharing and asset-backed financing required a precise, data-driven approach to risk analysis and continuous ethical monitoring that could not be achieved through manual oversight.
2. Data poverty and credit transparency. Sparse financial records and paper-based systems limited lenders’ ability to evaluate creditworthiness objectively. An AI-powered framework was needed to identify viable borrowers based on behavioral and contextual data rather than traditional credit histories.
3. Regulatory and regional complexity. The solution had to comply with local Mauritanian regulations while supporting regional expansion across ECOWAS markets, necessitating a flexible, multi-currency, multi-jurisdictional banking core.
"Finpace leveraged AI to transform our lending operations, reducing decision times, improving portfolio performance, and enabling rapid scale. Their technology-driven approach set a new benchmark for efficiency and growth in digital finance." — Layla Hassan, CIO
Finpace solution: The AI-driven ethical banking engine
Finpace implemented a tailored, AI-driven digital banking platform that brought together compliance, automation, and intelligence within a unified architecture, effectively aligning Sharia principles with modern financial scalability.
Sharia-AI credit engine (SACE). This proprietary engine transformed the underwriting process by evaluating profit potential and business integrity rather than default probability. It integrated diverse data sources, including mobile money transactions, utility payment histories, and satellite-verified business activity, to generate dynamic, Riba-free profit-sharing models for Mudarabah and fair mark-up structures for Murabahah.
Continuous ethical compliance monitoring. Finpace embedded automated mechanisms to ensure ongoing Sharia compliance. The Asset-Backing Tracker verified that each Murabahah transaction followed the required sequence of asset transfers, while the Ethical Transaction Analyzer used machine learning to detect deviations or non-permissible activities in real time, enabling swift auditor review and intervention.
AI-enabled financial literacy and client engagement. To strengthen user understanding and repayment discipline, Finpace introduced Nour, an AI-powered assistant that delivers multilingual guidance on Islamic finance principles, repayment scheduling aligned with income cycles, and personalized financial education advancing both compliance and client empowerment.
The impact
Operational efficiency. Loan approval times were reduced from 72 hours to under 15 minutes, enabling the institution to deploy and manage a $5 million microloan portfolio within the first year of operation.
Inclusion at scale. More than 50,000 micro-entrepreneurs, 60 percent of them women, gained access to Sharia-compliant financial services, positioning the institution as a national leader in inclusive banking.
Risk weighted performance. The Sharia-AI Credit Engine (SACE) lowered non-performing assets within Mudarabah portfolios by 18 percent compared to regional benchmarks, confirming AI-based ethical scoring as a commercially viable alternative to interest-based lending.
Regional readiness. The modular Finpace platform provided a foundation for seamless expansion into Nigeria and Senegal, consolidating regulatory compliance and transaction settlement within a unified operational core.
A new model for ethical digital finance. By fusing advanced AI with the core tenets of Islamic finance, including risk sharing, transparency, and fairness, Finpace established a replicable framework for equitable digital banking across Africa. The initiative demonstrates how technology, when guided by ethical intent, can resolve systemic market inefficiencies and transform financial inclusion into a scalable, sustainable growth model.
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