Islamic microfinance: An instrument for poverty alleviation

With the growth of Islamic finance industry, Islamic micro finance is becoming a populor tool in allviating the poverty in the developing countries, the artical is about Islamic mirco financing..

From The Financial Express Bangladesh

Islamic microfinance (IM) is becoming an increasingly popular mechanism for alleviating poverty, especially in developing countries around the world. The Islamic microfinance industry as a whole is expected to reach over $2.0 billion in 2012 and is a continually growing sector due to its ethical principles and prohibition of riba (interest). This amount of assets is, however, only 1.0 per cent of the total microfinance of the world.

The concept of IM adheres to the principles of Islam and is a form of socially responsible investment. Investors who use their wealth for IM projects only involve themselves in halal projects which benefit the community at large. Such projects include zakat, which is charity based, or trade and industry projects to develop a country’s economy.

Read more at : http://www.thefinancialexpress-bd.com/more.php?news_id=141342&date=2012-08-28

Islamic Microfinance Challenge 2010: Innovating Sustainable, Scalable, and Market-Driven Models.

Islamic Micro Finance Challenge for 2010 has been organized by CGAP, Deutsche Bank, Islamic Development Bank, and Grameen-Jameel with the theme of Innovating Sustainable, Scalable, and Market-Driven Models. This contest is to promote Islamic micro finance innovative models.  

For further information

CCGAP.org

http://www.cgap.org/p/site/c/template.rc/1.26.12645/

Can Islamic Finance go micro?

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With more than half-a-trillion dollars in assets and an annual growth rate that has outpaced conventional banks’ by nearly 50 percent, the Islamic finance industry is already making waves among investment fund managers. And this not only applies to the Muslim world: The Banker magazine recently named the United Kingdom to its list of the top 15 countries managing Sharia-compliant assets.

The new CGAP Publication Islamic Microfinance: An Emerging Market Niche argues that the Islamic finance industry, with its unprecedented popularity and growth, may be well-placed to address a critical need in microfinance: reaching the some 72 percent of people in Muslim-majority countries who do not use formal financial services.

 

Much of that gap owes to unmet demand for products that comply with Islamic law, or Sharia, according to Aamir A. Rehman, former Global Head of Strategy with HSBC Amanah

“Sharia compliance can help microfinance institutions reach a large number of Muslims who prefer Sharia-compliant forms of financial activity,” says Rehman. But he also adds that microfinance is “a fantastic opportunity for Islamic finance to reflect its core values and mission” of supporting the underprivileged.

This “win-win” situation is stimulating greater discussion between microfinance practitioners and practitioners of Islamic finance, who seek to draw upon the experience of a highly professionalized microfinance industry while acknowledging that there may be no turn-key solutions for Islamic financial services directed to poorer customers.

Soure : worldbank blog