Exploring Ethis: A Unique Property Crowdfunding Opportunity

Ethis is a property crowdfunding company based in Malaysia, with operations extending to Indonesia and Dubai. Over the past few years, Ethis has garnered attention for its impressive growth, raising over $12 million and attracting a community of more than 21,000 investors who have made over 1,400 investments. With annual returns typically ranging between 9-13%, Ethis presents an intriguing option for investors, particularly those interested in halal investment opportunities. In this article, we delve deeper into what Ethis does, its operations in Indonesia, the investment process, and the pros and cons of investing in this platform.

What Does Ethis Do?

Ethis operates under a multifaceted business model that encompasses four distinct yet interconnected ventures:

Ethis Indonesia: The flagship property crowdfunding platform focusing on social housing and residential development.
Ethis Malaysia: Recently launched, this platform offers equity crowdfunding opportunities.
Ethis Dubai: Set to launch a property crowdfunding platform in the near future.
Global Sadaqah: A charitable crowdfunding platform based in Malaysia.

For this article, we will primarily focus on Ethis Indonesia, as it currently offers the most investment opportunities.

Ethis Indonesia: A Focus on Social Housing

Ethis Indonesia primarily invests in a mix of social housing, residential, and commercial development projects. The emphasis on social housing is particularly noteworthy, driven by the Indonesian government’s "One Million Homes" initiative launched in April 2015. This program aims to address the critical housing shortage by building one million homes annually, supported by government subsidies for low-income families and reduced regulatory hurdles for developers.

Background on Indonesia

Indonesia, with a population of approximately 262 million, has been experiencing rapid economic growth, averaging 4.7% annually since 1998. This growth positions Indonesia to potentially become the world’s fourth-largest economy by 2030. The demand for housing, particularly affordable options, is significant, making it an attractive market for Ethis investors.

How Does Investment into Ethis Work?

Investing in Ethis projects is accessible to both local and foreign investors. Here’s a step-by-step breakdown of the investment process:

Registration: Investors must create an account on the Ethis platform, providing necessary identification documentation.
Project Selection: Once registered, investors can browse live and historical campaigns, selecting projects that align with their investment goals.
Investment: After choosing a project, investors can make their investment directly through the platform.
Monitoring: Investors can track their investments through an online dashboard, although some have noted that updates can be sporadic.
Payout: At the end of the project timeline, investors receive their initial investment back along with profits, minus Ethis’s fees.

Case Studies

To illustrate the types of investments available, here are two case studies:

The Essential Daru 2: This project raised SGD $141,000 (approximately £80,000) but ended up overfunding to SGD $180,000. It offered a two-year investment with a 27-29% return, aimed at funding social housing development. The investment was structured as a musharakah contract, pooling resources from multiple investors.

Hasanah City: Currently live, this project seeks SGD $560,000 (around £320,000) over a year, offering a 13-14% return. The funds will support the construction of 20 out of 156 units. This investment is structured as a wakalah contract, with Ethis acting as the agent for the investors.

Ethis Business Model

Ethis generates revenue from both investors and developers:

Investor Fees: Ethis takes 12.5% of gross profits at the end of a project.
Developer Fees: A platform fee of around 6.5% is charged to developers, which can increase for first-time or higher-risk projects.

These fees are considered reasonable given the strong returns Ethis has provided, with net returns of 9-13% annually.

Pros and Cons of Investing in Ethis

Pros

Attractive Returns: Ethis offers competitive returns compared to other property crowdfunding platforms.
Sharia-Compliant: Investments are structured to comply with Islamic finance principles.
High Demand: The focus on social housing aligns with a clear market need.
Regulation: Ethis operates under Indonesian regulations, providing a layer of security for investors.
Asset-Backed Projects: Investments are backed by tangible assets.
User-Friendly Platform: The website is designed for ease of use, making the investment process straightforward.

Cons

Development Risks: As with any development project, there is a risk of delays or issues that could impact returns.
Geographical Distance: Investing in a foreign market can pose challenges, particularly in legal recourse if issues arise.

Final Thoughts

Ethis presents a compelling option for investors seeking high-yield halal investment opportunities. After extensive discussions with Ethis representatives and reviewing their business model, we find them to be a credible and professional entity. Their positive ratings on platforms like Facebook further bolster their reputation.

While investing in Ethis carries inherent risks, particularly due to geographical factors, the potential returns and the alignment with social housing needs make it an attractive addition to an investment portfolio. As always, investors should consider their risk tolerance and investment strategy before diving in.