Do Muslim Poor Self-Exclude Them from the Financial System for Reasons of Faith?

In a 2007 study “Islamic Microfinance Development: Challenges and Initiatives” undertaken by the Islamic Research and Training Institute, we observed that most of the member countries of the OIC with significant Muslim population had high and rising poverty levels. Just five of them – Indonesia, Bangladesh, Pakistan, Nigeria and Egypt accounted for over half a billion (528 million) of…

Making Sense of Onion Economics in India: Can Islamic Finance Help?

I was motivated to write this piece by the story of a poor farmer in India. The story of this 48-year old farmer Devidas Parvane from the Rasai village of Pune in Maharashtra state in India as reported in the mainstream media captures a classic unresolved problem of agricultural finance in India. The farmer brought…

Salam-Based Microfinance by BoK ? III

Salam has traditionally been understood as a mode of agricultural finance. Indeed, as scholars point out, one of the reasons why salam is admissible as an Islamic mode, even while violating the basic Shariah rule of “do not sell what you do not have”, is because of its economic significance.  It provides a mechanism to…

Islamic Participatory Microfinance by BoK ? II (Abu Halima)

The Abu-Halima Greenhouses Project of IRADA, designed in 2011, uses a composite model of intervention that combines several “smart” factors and is designed to address several critical social issues including lack of food security, unemployment and poverty. It aims to open new economic opportunities for young university graduates with formal education in agriculture. The project…

Islamic Participatory Microfinance by Bank of Khartoum

The name is now familiar among Sudan’s poor, unemployed and recent pass-outs from universities. The Irada program of Bank of Khartoum is experimenting with new and innvovative models of intervention to make a dent on chronic social problems, such as, poverty and unemployment. As part of the Sudanese economic system, it operates as a Shariah…

Empowering Communities through Zakat: The Dompet Dhuafa Experiment

An alternative approach to poverty alleviation that is of more recent origin than the mainstream microfinance models is the community-driven-development (CDD) approach. CDD is a grant-based intervention. It approaches the poor as partners in the development process, rather than mere recipients, and builds on their institutions & resources. Its key elements include: (i) focus on…

An Islamic Microfinance Program without an “Islamic” Label

It is a long-standing debate among contemporary Islamic banking and finance scholars and professionals. Should Islamic banking and finance should carry the “Islamic” label? A country with an avowedly Islamic identity resisted the “Islamic” label for the distinct model of banking and finance on the ground that this would amount to an indirect admission that…

Engineering a Waqf for Microfinance: The Fa’el Khair Program

S/he was a donor with a difference. A single donation of SAR500 million or USD130 million was large enough to be conspicuous. What was unique about this donation however, was that the donor did not wish to be named; in the tradition of a giver “whose left hand does not know what the right hand…