The confluence of two strongly expanding industries, microfinance and Islamic finance, has seen rapid growth in the past years on the grounds that, according to banking studies, an estimated 70% of people living in Muslim-majority countries do not use formal financial services. Adding to this is widespread poverty in many Muslim countries, with close to 650mn Muslims worldwide currently living on less than $2 per day.
Bank financing plays a key role in many businesses expansions that lead to rising employment needed to help create the millions of jobs to cash in on the demographic dividend in the MENA region. As the past decade has shown in countries with governments supportive of Islamic banks, the sharia-compliant financial sector can play a role alongside conventional banks.
To enable financial inclusion for small farmers, the entire value chain needs to be understood and supported, and financial products have to be designed keeping in mind their unique needs. We at Bank of Khartoum believe that Islamic microfinance products can effectively reach small farmers in Sudan when customized to their needs.
We are reaching small farmers through a series of capacity building projects and developing tools such as group financing, co-operative, production-risk guarantees, and crop-insurance products aimed at small-scale farmers.
Global Islamic Microfinance Forum concluded in UAE with a unanimous declaration to work together for the advancement of Islamic microfinance globally.
Three-day "Global Islamic Microfinance Forum" was organised on 8th-10th December 2012, in Dubai World Trade Centre, UAE. The delegates from UAE, Pakistan, India, UK, Bangladesh, USA, UK Bahrain, Yemen, Azerbaijan, Turkmenistan, Kirghizstan, Mauritius, Kenya, Canada, France, Egypt, Philippine, Uganda, Iraq, Nigeria, Sudan along with delegates from other countries participated in the Forum.
Islamic banks market themselves as the panacea to the world’s ailing economy; but are a set of prohibitions enough to make the financial world a better place?
Many Islamic banks saw the financial crisis as the ultimate marketing opportunity. While banks in the western world were steeped in scandal, Islamic banks could present themselves as the opposite and tempt weary consumers through their doors with promises of fairness, transparency and morality.
As he delivered his welcome address to delegates at the Global Donors Forum in Kuala Lumpur recently, Malaysian Prime Minister Datuk Seri Najib Tun Razak sought to make a few crucial points about the necessity, and viability, of Islamic finance and micro-finance in today’s world.
Islamic banking is expanding by an increasing number of segments of traditional banking. Microfinancing has become the next area of expansion of Islamic finance.
IDB Vice-President (Operations) Boubacar Sidibe stated that IDB will actively follow up the mandate to expand the Islamic microfinance industry and offered to support innovation and research in the field as a means to fighting poverty in IDB member countries. He urged to create a knowledge platform accessible to everyone.
Islamic microfinance can be an effective tool to eradicate poverty if it ensures distributive justice to the downtrodden people, analysts said yesterday.
Poverty has multi-dimensional aspects: it means not only a lack of money but other issues such as poor access to clean water and sanitation, inadequate physical security, lack of voice, insecurity, powerlessness and exclusion.
Islamic microfinance is becoming an increasingly popular mechanism for alleviating poverty, especially in developing countries around the world. 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).
While in traditional banking terms, half a million dollars is not a huge amount of money, divided into micro-loans, it has the power to change the lives of hundreds of Moroccan families.
Yesterday in Casablanca, Grameen-Jameel, the first social business in the Middle East, signed a loan agreement for $500,000 to help finance micro-credit association Al-Karama and support its growth.