Islamic finance, “emerged in the early 1960s to provide alternative financial contracts that confirmed to Sharia principles of Islam” such as interest free loans. Islamic microfinance has difficulty in developing. However, this does not mean that capital is free of charge, that it should be made available without any … of global microfinance despite a global Muslim population of about 1.2 billion. Islamic microfinance attempts to capture the spirit of Sharia law by allowing financial tools that create and maintain a just economic system -- one that protects clients through built-in mechanisms like risk sharing. Islamic Aid has been working on Islamic microfinance for more than 10 years helping poor people to increase their incomes and make their futures more secure, without compromising their religious beliefs. The nexus between Islamic banking and microfinance has been previously discussed, addressing interest free lending while promoting fairness and ethical practices in accordance with Islamic law. There have been even fewer attempts at implementing Islamic-compliant microfinance products, however. More recently, from 28-30 of June, 2011, sixty-one participants from 25 countries participated in an online “Discussion Corner” organized by USAID on the subject of Islamic Banking and Microfinance Kiva believes in supporting products that are culturally compatible and … Islamic banking or Islamic MFI,s base on Shria’s can also apply on micro-scale in order to poverty reduction (Zahidzamir, 2011; Ehsan, Feroz, 2008; Ashraf, 2007). According to the 2008 Consultative Group to Assist the Poor (CGAP) survey, Islamic microfinance accounts for about 0.5 per cent. Despite the call for Islamic microfinance, there has been very little academic research on the topic. Islamic microfinance has also been growing remarkably, but only a few studies analysed the role of Islamic micro-financing in the socio-economic development in one country. By Tasnim Nazeer Islamic microfinance is becoming an increasingly popular mechanism for alleviating poverty, especially in developing countries around the world. #Mudarbha_and_Musharka #Murabha #Islamic_Trade #Islamic_Sale_and_Purchase. Can Islamic microfinance as it grows maintain its original spirit of fairness, transparency and sharing, principles that seem to have been almost forgotten in the world of conventional microfinance? PRESENTED BY – A free PowerPoint PPT presentation (displayed as a Flash slide show) on PowerShow.com - id: 3edba1-NTg5N It is estimated that 72% of the population living in predominantly Muslim countries do not use financial services, because they do not follow the precepts of Islam. Most of the Muslim majority countries today suffer large-scale human developmental crises. Together with a colleague, Professor Malcolm Harper, I have just spent the past few months researching and editing a book on Islamic microfinance – which is defined as Shari’ah compliant financial services for poor people. To the best of our knowledge, there were no previous studies that compared Islamic and conventional MFIs in this manner. This chapter seeks to study the issues and challenges faced by Islamic microfinance institutions in … #Difference_Between_Conventional Micro-finance_&_Islamic_Microfinance #Islamic_Microfinance_kia_hay? Islamic finance, whether “micro” or not, is organising its financial services to comply with Islamic law. Islamic Microfinance Finance & its Product Mechanism. Islamic microfinance (IMF) is becoming the most popular source for poverty alleviation in the world, especially in the developing countries. Thus, Islamic microfinance concept had been developed as alternative for Muslim borrowers; based on Islamic financial contracts . Perhaps the earliest Islamic microfinance attempt in modern times was that of Mit Ghamr banks in Egypt in the early 1960s. The “Islamic Microfinance Challenge” was one of the major revelations to kick off the plan. Islamic microfinance providers also require a better legal and regulatory framework, not only to monitor their activities, but also to encourage them to experiment, innovate and develop. Islamic microfinance is a specialized part in a growing and diverse body of microfinance literature. Islamic Microfinance is a type of financial service that is guided by the principles of Islamic (Shari’ah) law. Despite a real appeal in Moslem countries, Islamic microfinance represents less than 1% of global microfinance. While conventional microfinance has taken the lead, it is providing non-Sharia'ah compliant offerings that millions of low-income Muslims reject. Islamic law emphasizes moral and ethical values in all dealings, prohibiting the payment or receipt of interest (riba). Trade Based Modes of Islamic Microfinance ( Murabahah, Salam, Istisna etc.) Due It also prohibits investment in businesses dealing in pigs, alcohol and gambling, among others. Although Islamic finance was originally re-introduced to fight poverty, this objective fell down on the industry's agenda. Then Islamic microfinance products have been examinated and make possible now the creation of new products in line with the existing ones. Informative & Scope Services and challenges of Islamic microfinance by Samar Al-Montser. #Difference_Between_Conventional Micro-finance_&_Islamic_Microfinance #Mudarbha_and_Musharka #Murabha #Islamic_Trade #Islamic_Sale_and_Purchase. Islamic Microfinance is a type of banking services that focus to a target group of low income individuals or groups who does not have other access to financial services. The study's goal is that a maximum of people have access to microfinance facilities and services to reduce poverty. An important area for the Islamic finance industry, therefore, is the adaptation of Islamic financial products to join in the development of microfinance to bring the initial objective of poverty alleviation back into the industry's focus. and is among a handful of microfinance institutions in the Arab World providing Islamic financial services. Islamic microfinance, having a unique feature compare to the con-ventional counterpart, offers a potential solution to poverty al-leviation. Islamic microfinance is nothing more than the conventional microfinance less the interest. For the sake of readers we will cite some definitions of microfinance given by some authors, which Islamic Microfinance Muslim Aid Sri Lanka’s Islamic Microfinance programme is being running with the vision of alleviating both, poverty and dependency syndrome existing within the conflict affected poor. The Islamic finance industry as a whole is expected to reach over $2 billion dollars in 2012 and is a continually growing sector due to its ethical principles and prohibition of riba (interest). Islamic microfinance represents the ultimate opportunity for Islamic finance to live up to its potential. Currently Islamic microfinance is concentrated in a few countries, with Indonesia, Bangladesh, Pakistan and Afghanistan ranking in the top. Jul 8, 2012 - Introduction to Islamic Microfinance Islamic Microfinance is expected to reach over $2 billion dollars in 2012. This microfinance fund based on wakalah model will be managed by a separate company that will be paid management fees and it will not participate in the fund.19 Leveraging on Wilson’s wakalah model, Abdul Rahman suggested that this model could be used by Islamic banks for implementation of microfinance activities.20 9.3 What is Islamic Microfinance all about? Al Amal, Winner of the Islamic Microfinance Challenge 2010 Al Amal provides various financial services and products (Islamic financing, savings, solidarity insurance, etc.) Dr Ajaz Ahmed Khan Senior Microfinance Advisor, CARE International. Microfinance is a banking service that is provided to unemployed and low-income individuals who have no other means of gaining financial services. Nevertheless, the yardstick of microfinance success lies in its actual performance versus its raison d’être of poverty alleviation, i.e. Islamic Micro Finance as effective tool of poverty alleviation. Islamic Micro Financial Products Mechanisms & Compatibility with Conventional Microfinance Products. ‘the extent to which it alleviates poverty levels of its existing and potential customers’ [58] ; p. 173). First, Islamic microfinance has a two-part definition. In accordance with Islamic law, any element of usury must be avoided entirely in economic transactions, hence resulting in the imposition of management fees on the borrowers instead of interest. Suddenly, the whispers stated blow sounding, Why Islamic Microfinance is not scaling up? To date, there are quite a few papers on Islamic microfinance that are published in reputable journals, which fairly represent the size of Islamic microfinance industry compared to the overall microfinance sector. Microfinance conventionally provides services to underprivileged entrepreneurs and works toward poverty alleviation but what’s good to know is whether the Islamic microfinance institutions are really making a change. #Islamic_Microfinance_kia_hay? Islamic Microfinance Innovations & Opportunities in Underdeveloped CountriesApril 25, 2012Alhuda-CIBE TrainingsAvari Towers, Karachi. 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