Supporting Shariah-compliant lenders: a human-centered collections approach

In Islamic finance, the principles of ethical conduct, fairness, and transparency aren’t just guidelines — they’re fundamental requirements.

These values shape every aspect of financial services, from product development through to customer interactions. But what happens when customers face financial difficulties? This critical touchpoint demands the same unwavering commitment to ethical treatment and human dignity.

Understanding Shariah compliance in finance

Islamic finance operates on the principle that financial services should promote social justice and ethical behavior. It emphasises transparency, partnership, and the sharing of risk and reward. While most financial institutions understand these principles during the lending phase, maintaining these standards throughout the entire customer journey — including collections — is equally important.

What matters in a collections partnership

For Shariah-compliant financial institutions, selecting a collections partner requires careful consideration. The partner’s approach must align with the lender’s commitment to ethical treatment and fair practices. This alignment is crucial because the collections process represents a sensitive touchpoint in the customer relationship — one that can either reinforce or undermine the trust built during the initial lending phase.

Key considerations include:

• A demonstrated commitment to treating customers with dignity and respect
• No interest charges on outstanding balances, maintaining Shariah compliance throughout the collections process
• Transparent communication and fair practices
• Technology that enables rather than replaces human interaction
• Robust compliance frameworks and governance
• A focus on positive customer outcomes rather than aggressive collection tactics

Why partner alignment matters

If a Shariah-compliant institution offers ethical financial solutions, only to partner with a collections agency that doesn’t share these values, it creates a disconnect in the customer experience. This misalignment can damage brand reputation and erode the trust carefully built with customers.

This partner alignment was key for Ayan Capital, an InDebted client. As a leader in Halal car financing, it was essential to find a collections partner who could maintain their strict ethical standards while delivering effective outcomes. Their commitment to Shariah principles extends beyond the initial financing agreement to every customer touchpoint, making the collections experience particularly critical to their brand integrity.

“At Ayan Capital, we believe that ethical finance means maintaining our values at every stage of the customer relationship. As a Shariah-compliant finance provider in the car finance and BNPL segments, we believe that ethical finance means maintaining our values at every stage of the customer relationship — including in the collections experience. When selecting a collections partner for our BNPL product, Ayan Pay, we looked for an organisation such as InDebted that demonstrated the same commitment to fair treatment and transparency that we promise our customers from day one, ensuring our Shariah-compliant principles extend throughout the entire customer journey.” — Shaham Shujja, Head of Business Development, Ayan Capital

How InDebted supports Shariah-compliant lenders

At InDebted, our values naturally align with the ethical principles valued by Shariah-compliant institutions working with Islamic consumers in multiple regions. Our approach is built on:

Customer experience excellence

• Consistently high customer satisfaction, demonstrated by our 4.9-star average rating from over 2,500 Google reviews
• A unique incentive structure that rewards our team based on customer satisfaction rather than the amount they collect, as historically, this has led to misaligned incentives and harmful practices in the industry
• Digital-first solutions that empower customers to manage their accounts with dignity and flexibility

Robust compliance and governance

• Technology-driven compliance controls built into our core systems
• Regular compliance reviews of all customer communications
• Comprehensive quality assurance and monitoring frameworks
• Industry-leading security certifications including ISO27001, ISO9001, and PCI compliance

Human-centered technology

Our platform combines technological innovation with human understanding to offer:

• Personalised communication strategies
• Self-service options that respect customer privacy and convenience
• Flexible and transparent payment plans
• Culturally sensitive communication schedules, including modified contact hours during religious periods like Ramadan
• Multi-layered support including proactive vulnerability identification and industry-leading hardship processes

Looking forward

As the Islamic finance sector continues to grow, the need for modern collections partners who understand and respect Shariah-compliant principles becomes increasingly important. The right partnership should enhance your brand’s commitment to ethical financial services while delivering effective results.

Get in touch to discuss how we can support your customers with a collections approach that reflects your values and strengthens your brand. Together, we can help customers resolve their debts through a process that’s both human-centered and highly effective.