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Library » Introduction to Islamic Microfinance

Introduction to Islamic Microfinance
2008, Obaidullah, M.
Average Rating: (3 ratings)
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Reviewing microfinance in the context of Islamic societies

This paper explains the building blocks of a microfinance program targeted at Islamic societies, which are characterized by high and rising levels of poverty and financial exclusion.

Conventional microfinance programs often neglect Muslim religious sensitivities. For poverty alleviation efforts to succeed in Muslim societies, there is need for an appropriate model rooted in Islamic beliefs and cultures. Islamic finance includes:

Mandatory charity;
Prohibition of interest.

The paper states that there are no fundamental contradictions in global microfinance best practices and the Islamic approach to poverty alleviation. It presents the Islamic approach as a composite and compassionate one that is rooted in charity, but permits wealth creation and for-profit enterprise. The paper focuses on mechanisms, models, tools and instruments of the Islamic approach such as:

Shariah-compliant mechanisms of microcredit;
Partnership modes of equity financing such as trustee-financing, joint venture and share-cropping;
Not-for-profit insurance that takes the form of mutual guarantee by members in a cooperative venture.

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17 Aug 2009


Timely,what we need at a vary trying time

muktar nadama Nigeria

16 Aug 2009
A very informative document on Islamic microfinance

It is one of the few available sources on Islamic microfinance. I found it very informative. Anyone who is related to or interested in Islamic microfinance must read valuable work.

Azmat Rafique Qatar

29 Jun 2009
An Excellent Primer

An excellent primier for the uninitiated, but covers all the fundamental ideas of relevance. A must read for mF professionals who plan to get into this sunrise sector.

India

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Journal Volume/Pages:
75

Publisher(s):
The Islamic Business and Finance Network (IBF NET)