Shariah Stock Screening and Dividend Purification Calculator with Transparent Methodology
Muslim investors in Pakistan, the Gulf, Malaysia and the UK want to know whether a listed company meets Shariah screening rules and how much of a dividend to give away as purification, but most tools hide their method. Build a screening web app that reads company financial statements, applies a chosen published screening methodology step by step, shows every ratio and its source line, and calculates purification amounts. Let users compare how different methodologies change the result.
Beginner
Achievable by one student in a semester with familiar tools.1 semester · 1 to 2 students
7 to ship
4 optional extrasSuggested stack
What you should ship
- A written summary of two published screening methodologies, with their thresholds taken from the official documents and cited
- A data model for the financial statement lines each method needs
- Manual and CSV entry of statement figures for 20 to 50 listed companies, with sources
- A screening engine that shows each ratio, threshold and pass or fail, with the calculation visible
- A dividend purification calculator for a user's holdings
- A comparison view showing companies that pass under one methodology and fail under another
- Unit tests for every ratio with hand-checked examples
If you have time left
- Zakat estimation on a share portfolio with clear assumptions
- Alerts when new quarterly results change a company's status
- Urdu and Arabic interface
- Import of figures from published financial statements with human checking
The problem: a yes or no with no explanation
Shariah-compliant investing is growing in Pakistan, Saudi Arabia, the UAE, Malaysia and among Muslims in the UK and US. Screening usually has two parts: the company's business must be permissible, and its financial ratios (such as interest-bearing debt, interest income and cash compared with assets or market value) must stay below set thresholds. Investors are also asked to purify the part of their dividends linked to non-compliant income.
Different scholars and index providers use different ratios and thresholds, and most apps only show a green or red label. Investors cannot see why a company passes, and students of Islamic finance cannot check the working.
What already exists and the gap
- Zoya and Musaffa are apps that screen stocks for Shariah compliance, mostly for US and global markets.
- The KMI-30 index on the Pakistan Stock Exchange tracks Shariah-compliant companies selected by a published methodology.
- AAOIFI, the Accounting and Auditing Organization for Islamic Financial Institutions, publishes Shariah standards that include screening of shares.
The gap is a transparent, educational tool: show the method, the inputs and every calculation, let users compare methodologies, and cover markets such as the Pakistan Stock Exchange where app coverage is thin.
Inspiration
AAOIFI's Shariah standard on financial papers and the published methodology behind the KMI index are clear examples of rules that can be written as code. Your project turns them into tested functions and makes the reasoning visible.
What you build
- Retail investors see whether a company passes each rule and why, and how much of their dividend to purify.
- Islamic finance students and teachers use it to explain screening with real numbers.
- Analysts compare methodologies across a set of companies.
The technically interesting part
- Getting the rules exactly right. Thresholds, denominators (total assets or market capitalisation) and averaging periods differ by methodology. Take them from official documents and cite them in the app.
- Data provenance. Every figure should link to the statement and line it came from.
- Testing. Write tests with hand-calculated examples for each ratio and each edge case, such as negative equity.
- Explaining results. Show the calculation in plain language, not just a label.
How to evaluate it
- Correctness: all tests pass and results for a sample of companies match a published compliant list where one exists, with differences explained.
- Methodology comparison: how many companies change status between methods.
- Clarity: a test with a few users who explain back why a company passed or failed.
Suggested plan
- Weeks 1 to 3: study two methodologies and write them up with citations.
- Weeks 4 to 6: data model and data entry for a first set of companies.
- Weeks 7 to 10: screening engine, tests and purification calculator.
- Weeks 11 to 13: comparison view and interface polish.
- Weeks 14 to 15: report and demo.
Path to a product
Islamic banks, brokerages and investment apps in Pakistan and the Gulf could use a transparent screening engine, and educational institutions teaching Islamic finance need teaching tools. A team that adds reliable data feeds could offer screening as an API. The project shows careful, test-driven business logic, which employers value.
Scope warning
The app is for education and information, not a fatwa or investment advice; say so on every result. Do not invent thresholds; use only published methodologies and name them. Get a teacher of Islamic finance to review your summary of each method.
Learn what you need on Sefism
- Full-stack roadmap: the app, data model and calculations.
- Software design roadmap: keeping rules separate and testable.
- SQL and databases roadmap: storing statements and sources.
- Next.js documentation: building the app.
- PostgreSQL tutorial: the database.
Get help with this idea
The risk is getting a rule subtly wrong and presenting it with confidence. Tauseef can help you structure the rules and tests so mistakes are caught early. If you are new here, create a free account first.
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