Islamic finance counts its money. It should also count its people.

I was reading about the collapse of Ueno Bank in Paraguay. Halfway through, my mind went somewhere else. I see Islamic fintech news here and there almost every week. A new app one week, a new financing platform the next. It feels like everyone is opening an Islamic fintech. Then I wondered who is watching these firms as closely as people are using them.

What happened in Paraguay

At the start of November, the central bank of Paraguay put Ueno Bank into resolution. Ueno said it had about three million customers, roughly 60 percent of the country's adults. Almost overnight they could not withdraw cash, make payments or use their cards. Retirees and workers were left without their savings and their unpaid wages.

Ueno was not new. It started in 1976 as a small finance company and stayed small for decades. It got a full banking licence in 2023 and then grew very fast. It gave cashback on groceries, and its name was on the national stadium. By June 2026 it reported US$4.2 billion in assets.

The problem the regulator found was an old one. Ueno had lent about US$146 million to companies linked to its owners. The loans went beyond legal limits and had too little collateral behind them. Once the books were corrected, the bank's capital was below half the legal minimum.

The timing troubles me most. The supervisor found the linked loans in early June. In mid-June, the bank moved a US$74.4 million loan portfolio to another company owned by the same shareholders, and the supervisor treated the problem as solved. The central bank now says the money for that purchase came, through loans, from the bank itself. The intervention came five months after the first warning.

Paraguay has seen this before. In 1995 its central bank closed Bancopar, a bank that had also lent to companies linked to its owners.

What Ueno does and does not tell us

Ueno did not fail because it was an app. It failed by lending to its own owners, which is one of the oldest failures in banking.

The lesson I take from it is about speed. A small finance company became a household name in a few years. Its customers grew faster than the supervision around it. The warnings came, and they did not stop it.

What Islamic finance looks like

Counted by assets, Islamic finance is mostly a banking story. The IFSB put the industry at about US$4.4 trillion in 2025, and Islamic banking was nearly 70 percent of it. The same report says the non-bank segments grew with particularly strong momentum. The wider world has already moved further. The Financial Stability Board found that non-bank financial institutions held 51 percent of global financial assets in 2024. Their assets grew 9.4 percent that year, against 4.7 percent for banks.

Why the tables miss them

An industry report this year counted 484 Islamic fintech firms in 41 countries, and it says the number of firms is settling. What keeps growing is the money that passes through them. The same report estimates US$198 billion in transactions and expects about US$341 billion by 2029.

Much of that money never shows up in asset tables. Take peer-to-peer financing. A platform matches people who have money to lend with people or businesses who need financing. The money belongs to the lenders, not to the platform. So the platform's own balance sheet stays small, however much money passes through it. In the statistics, such a platform is almost invisible. In people's lives, it is not.

When the label fails

An Islamic peer-to-peer platform in a large Muslim-majority market in South-East Asia shows what this means. Police say about 15,000 lenders lost money. The regulator's examination put the losses at around US$147 million. The country's financial intelligence unit called it a Shariah-based Ponzi scheme. Investigators allege fictitious projects and lender money sent to affiliated companies. Prosecutors say some lenders were paid with money from newer lenders.

Well-known faces promoted the platform. One of them told the court that he was told it used Islamic contracts. The trial began in July 2026, and no court has ruled yet.

That is many families for a firm that barely registers in our asset tables. It is not the only case. In August 2025, a central bank in the Gulf suspended the licence of a Takaful operator for failing to comply with insurance regulation.

I believe the word Islamic on an app does not belong to the app alone. It carries trust that Islamic banks, Takaful operators and scholars have built over decades. When one platform misuses it, families do not only blame that firm. If it fails, they will not ask which segment it belonged to. They will ask whether Islamic finance protected them.

Where attention should go

So I think our attention has to follow customers as well as assets. That starts with data. Supervisors and standard-setters should know how many people each fintech, Takaful operator and financing platform serves, not only how much it holds.

It also means looking early. A firm that doubles its customers in a year deserves a closer look that year, whatever its size. Ueno shows that a warning is not enough when nobody checks the fix.

It also means the industry asking itself whether each app that uses the word Shariah or Islamic has earned it.

I am glad that many people now meet Islamic finance first through their phones. I hope that the next time an app reaches millions of people, we already know how many people it serves.

Every one of them trusted the word Islamic, and every one of them deserves to be counted.

Disclaimer: The views expressed in this blog are not necessarily those of the blog writer and his affiliations and are for informational purposes only.

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