The current surge in residential real estate investment has skyrocketed the consumer demand for mortgages. The mortgage industry has been adopting new trends to provide better home financing opportunities but property prices are witnessing unprecedented jumps across cities in the UK. The hike in home loan rates is becoming a concern for many property buyers.

Pfida aims to provide an ethical alternative to the traditional mortgage to ease out the burden of home loan debt. As an ethical startup, Pfida enables a homebuyer to purchase their home by making monthly payments similar in cost to a traditional mortgage but without any burden of debt. Raza Ullah, Founder & CEO of Pfida, was with the CEOViews team to share details about their home finance products and how they are creating values to clients.

CEOViews: Pfida enables a homebuyer to purchase their home by making monthly payments similar in cost to a traditional mortgage, but without any burden of debt. Kindly take us through the inception of the firm.

Raza Ullah: It all began from a conversation with a co-worker when I was working as an actuary at the Bank of England. I had told him I wanted to save my money, buy property, and retire in my mid-thirties from the rental income. He wagged his finger and said: ‘Raza, with an actuary skill set, you have a responsibility to do something to improve the housing crisis we are in, whereas what you’re talking about is actually going to add to it and worsen it.’

This really struck me, it’s a very Islamic way of thinking that I have this responsibility with the skillset that I’ve got. It planted the seed in my mind, and later that year when I was on Hajj I decided I was going to make it my mission to do something beneficial to try and benefit Muslims and society as a whole. So, I quit my career and started setting up Primary Finance, now Pfida. There wasn’t a true ethical shariah-compliant product available for Muslims to purchase their own homes, so that’s how the Pfida Home Provision Scheme was founded.

Pfida aims to provide an ethical alternative to the traditional mortgage to ease out the burden of home loan debt.

It was something I felt so passionate about, and after seeking consultation from Salman Hasan, a shariah scholar specialising in Islamic banking and finance as well as a Solicitor of the Senior Courts of England and Wales, (now our Chief Legal Officer too!), on the product, he became our first customer after renting all his life. Since then, we have financed over 60 homes and launched three ethical savings products for those looking to earn a halal return on their investment.

CEOViews: What were the factors that led to the establishment of Pfida? What challenges did you want to address through the conception of the firm?

Raza Ullah: As Muslims, we do not believe in charging and dealing with interest, which means homeownership is an opportunity a large majority of us are not fortunate enough to have easy access to. This is due to the existing traditional homeownership route which involves a mortgage from the bank, based on a loan with interest.

I wanted to create a product that enabled Muslims to be able to purchase their own home in a shariah-compliant way, free of interest and without the burden of debt. I believed the existing Islamic products available didn’t quite hit the mark, so I created my own, a truly ethical product.

CEOViews: Pfida has been recognized as the, “Top 10 Innovative Brands of the Year 2023.” How was your journey so far? What milestones have you achieved along the journey?

Raza Ullah: We are so pleased to be recognised, especially as a small company that hasn’t had a large marketing push. It’s been an organic recognition through word of mouth, which is really humbling.

The journey has been great, hard work, but worth every long day. We didn’t have investors or an abundance of capital to get the business started but we were fortunate to have a lot of people reaching out to us wanting to offer their skills for free to help support the product, some of whom are full-time employees now.

Our first big milestone was financing our first Pfida home. Our first customer was Salman Hasan, who you may all know as our CLO and co-founder. 2021 was a special year for us, we had a very successful seed funding round which enabled us to expand our infrastructure and team, and later launch our Grow Your Savings (GYS) savers account, which directly funds homes for the community. To date we have been entrusted with over £20m of savers’ money. All of this is used to help people buy homes with us, debt-free.

We have hit a couple of big milestones recently, one being our rebrand from Primary Finance to Pfida. It’s been a challenging 12 months but we’re happy to reveal our new brand that represents our vision and growth for the company. Secondly, we’ve recently celebrated the first person to successfully purchase their home with us outright through our financing method. We’ve now grown our team to over 30, with plans to double that number by the end of the year, and we also expect to finance our 100th home this year. A lot is happening!

CEOViews: What home finance products and services does your company provide? Can you explicate them in brief?

Raza Ullah: We currently offer two finance products, home finance and buy-to-let finance. The demand for home financing is so high we currently have a waiting list of 5,000+ people.

To help customers boost their waiting list position to get financed quicker, we offer a ‘Grow Your Savings’ (GYS) account. The money saved in GYS savings accounts is used to finance customer’s homes and in return for helping the community become homeowners, we reward our GYS customers with a completely ethical return.

Due to popular demand from our customers, we have introduced two more savings investment accounts, GYS+ and GYS Pro, aimed at people looking to earn a higher return on their savings but not looking to purchase a home with us. The funds from these accounts are also used to fund the purchasing of homes for our customers and once utilised are also zakat-exempt.

CEOViews: Tell us a bit about your ethical home provision scheme.

Raza Ullah: Our ethical home provision scheme is a co-ownership between us and the customer. The customer is required to provide a minimum 15% equity amount (similar to a deposit) and we provide the remaining finance for the property. The customer pays rent on our share of the property, and can purchase equity each month according to their affordability. If customers stick to their monthly rent and target equity amount, we will reward them with a rental discount, and allocate the saving to their equity share. Much like this rental discount, we provide many incentives and features to make it easier for customers to purchase the property.

Customers are able to amend their monthly payments through their online dashboard they can opt to pay rent only, change their monthly equity payment every 3 months, as well as make any one-off payments as and when they wish. When the customer makes their final equity payment, the title of the property is transferred over to the customer.

CEOViews: You have been conferred with World Islamic Fintech award for the “most promising Islamic fintech start-up of the year.” How have these laurel and recognition changed the way you work?

Raza Ullah: Receiving great recognition such as this makes us strive to be a better fintech in the Islamic industry, but ultimately, it’s seeing our customers pick up their keys to their home on completion day, or the look on our customer’s face when he purchased the final equity in his property. That is what makes us all want to get up and come to work each day. These small wins have changed the way we work, they are a constant reminder of why I set up Pfida.

CEOViews: How does your firm test and measure innovation to ensure customer satisfaction?

Raza Ullah: We value customer feedback and implement suggestions where we can to improve our customer experience. Our two new investment savings products are great examples of this, our customers were asking us for an alternate to a traditional savings product that’s both ethical and generates higher returns, so we introduced GYS+ and GYS Pro.

We also introduced the ability for customers to set up standing order investments, based on customer feedback. We use analytical features across our website to capture customer’s behaviour throughout their online journey to understand how we can improve their experience. We also have features in our help and support platform to identify opportunities for new content, off the back of customer searches, and understand which areas aren’t quite hitting the mark.

CEOViews: What type of working culture do you maintain in your firm? What does it take to build a great team?

Raza Ullah: We are a diverse and inclusive team here at Pfida which has helped to strengthen our mission and achieve our goals. We started off small with just a team of 3 people and have grown to 35+, but it still feels like a family.

Our employees are who have made Pfida the success it is today, building a team that’s diverse has brought various perspectives and skills that help challenge and improve our products. Creating an environment that champions open and effective communication across all teams, including the senior leadership team, has helped to boost confidence in our employees and spark the sharing of ideas.

Ultimately all sharing the same goal and ethical values is the fundamental glue that holds the Pfida family together. Building a great team is both understanding your employees, their skills, their needs, how they work, and what you can do to achieve the organisation’s goals together. I’m proud to say we’ve built a great team here at Pfida.

CEOViews: What are the factors that differentiate Pfida from the others in the marketplace?

Raza Ullah: We pride ourselves on being a truly ethical company providing ethical debt-free products that really benefit the people. Our home provision scheme was built from the ground up to provide a completely shariah-compliant and debt-free way of buying a home. Many other shariah-compliant products don’t offer the same level of flexibility. Although our goal is to help people purchase their own homes, our model gives people the option to only pay rent if they choose to, for as long as they want. We also offer an equity buffer that enables customers to fall back on their equity if they’re facing financial difficulty, this ensures they can keep the roof over their head, even when times are tough.

Purchasing a home is a big financial commitment and taking on a large amount of debt can cause a great deal of stress. With Pfida, you get a partnership that is designed to benefit and support you every step of your home ownership journey.

CEOViews: What are your long-term goals and short-term plans?

Raza Ullah: We’re currently still cementing our foundations in the UK marketplace. We’ve recently rebranded and launched some really interesting ethical savings account alternatives. We’re also designing and trialing some new and exciting finance products as we speak. In the long term, we want to become the ultimate ethical banking alternative and a one-stop shop for serving all of our customer’s financial needs, serving customers across the globe.

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