Investments on Blossom's platform are structured as mudharabah (profit sharing) and meet various other requirements to ensure they are Sharia compliant.
Providing a capital guarantee in a mudharabah financing is not shariah compliant. For this reason, investments on the Blossom platform do not carry a capital guarantee and bear full risk of loss up to and including 100% of the original capital invested. However, investments on the Blossom platform do have several mechanisms in place to mitigate investor losses in the event of a borrower default. Most notably for our microfinance mudharabah sukuk, in the event of a default, the assets (portfolio asset-backed murabaha financing)will be assigned to a backup servicer and investors will be paid out from that pool of assets.
Any losses of principal capital are first replaced or covered by profit BEFORE the profit sharing is applied. Profit sharing only applies after profit from the portfolio first goes to cover any losses of principal capital.
Investments with Blossom are through intermediary sharia compliant microfinance institutions located within Indonesia called BMTs. These BMTs distribute loans to their members who encompass a wide range of industries. This built in diversification itself adds to risk mitigation by preventing the success of the sukuk being based upon the success of any individual sector.
The full list of categories in the portfolios are as follows:
Agriculture & Husbandry, Artistic & Creative Services, Automotive, Beauty & Cosmetology, Butchery, Childcare, Civil Servant, Construction & Contracting, Crafts & Handmade, Education, Emergency Services, Event Planners, Catering, & Services, Food & Beverage, Grocery & Convenience Store, Legal & Accounting, Medical Services, Metalworking, Durable Goods Micro-Industry, Food & Beverage Micro-Industry, Other Micro-Industry, Military & Police, Office Services Other, Retail (Durable & Non-Durable Goods), Sailor & Maritime, Security Services, Tailor, Tourism, Other Trading,Transportation, and Woodworking.
However; the majority of the investments are divided into the following industries:
Agriculture & Husbandry, Beauty & Cosmetology, Civil Servant, Construction & Contracting, Crafts & Handmade, Event Planners, Catering, & Services, Food & Beverage, Grocery & Convenience Store, Durable Goods Micro-Industry, Other Micro-Industry, Office Services Other, RetailDurable Durable Goods, Other Trading,Transportation, and Woodworking as demonstrated by the graph below:
Before investing in any investment opportunity on the Blossom platform, please review the prospectus carefully, especially the"certain risk factors" section for details.