Islamic Microfinance Research Papers - Academia.edu (original) (raw)

One of the solutions to alleviate poverty for supporting consumption but also productive activities is using the non interest based microfinance, namely Islamic microfinance. It also becomes the best alternative to overcome the problems... more

This research aims to determine the impact of the microfinance loan program on the lives of Gambian. Concentrating on RFS loan program called women finance WF. This study is qualitative research using an interview, the research extract... more

This research aims to determine the impact of the microfinance loan program on the lives of Gambian. Concentrating on RFS loan program called women finance WF. This study is qualitative research using an interview, the research extract information from the 45 women loan clients and 5 Reliance Financial services loan officers. And to identify the ways to improve the program for sustainability. The research used interviews with both women and RFS Credit officers from RFS to obtained information. The study intends to assist RFS and other microfinance institutions in the Gambia to know the impact of the loan program and make recommendations for its sustainability by extracting problems from the clients and suggesting how to mitigate those problems for the sustainability the program. The research makes the following findings. The women finance program has empowered women in The Gambia. Many could start or expand their businesses, which is now benefitting them and their families, but some have not felt its impact. The main contributions of this study extend the literature of
microfinance in the Gambia; besides, the study hopes to assist RFS in taking relevant steps that can help improve the women finance loan programs.

Commitment needed to maintain a balance between financial performance aspects of the operational aspects of social performance in microfinance institutions (MFI's). In this article the author conducted a literature study, by dividing the... more

Commitment needed to maintain a balance between financial performance aspects of the operational aspects of social performance in microfinance institutions (MFI's). In this article the author conducted a literature study, by dividing the discussion of three main parts, namely: the solutions to the phenomenon of ethics violations by MFI's; Shariah principles on Islamic MFI's in accordance with ethics violations solutions; challenges to the implementation of Reviews These solutions. Based on this, the authors found the similarities of the MFI's commitment to the principles of sharia platform to implement ethical MFI's operations. In this article the author suggests four main pillars of ethical commitment as an indicator that the MFI's / MFI's sharia, implementing operational aspects equally between financial performance and social performance.

LKMS is a financial institution that is oriented towards improving the welfare of members and society. Despite growing rapidly, LKMS is still experiencing many obstacles in its development. There are still many problems faced by this... more

LKMS is a financial institution that is oriented towards improving the welfare of members and society. Despite growing rapidly, LKMS is still experiencing many obstacles in its development. There are still many problems faced by this institution both from internal and external side. This study attempts to identify the causes and factors that are dominantly an obstacle in the development of LKMS in Indonesia, using IFAS EFAS Matrix and SWOT approaches, along with the solutions offered. Based on the IFE analysis that the highest rating of the power of small and medium enterprises (MSMEs) is followed by high local initiative. While the weakness rating is the cost of human resource training and enterpreneurship training followed by the cost of licensing. The results of EFE analysis that the highest ranking of the opportunities that are financed sector is very flexible followed by the public interest factor toward sharia transaction is getting bigger. While the highest ranking of threats is competition followed by weak regulation and legality LKMS. It is expected that there will be joint commitment from various parties either from policy makers or academics and practitioners in supporting and encouraging the development effort of sharia finance industry especially in this case LKMS.

The ship recycling industry in Bangladesh provides critical metal resources for construction and consumer products in the country, which has no native metal sources. This industry illustrates how industrial recycling can arise in a... more

The ship recycling industry in Bangladesh provides critical metal resources for construction and consumer products in the country, which has no native metal sources. This industry illustrates how industrial recycling can arise in a self-organized manner and be maintained through social embeddedness. Information provided through interviews with shipyard owners, traders, and blacksmiths illustrate the importance of historical, cognitive, structural, and cultural embeddedness to maintaining the flow of metals from the ships beached in the coastal city of Chittagong to the capitol city of Dhaka, more than 300 km away. The industry began through small scale metal scavenging; the early scavengers developed the major metal trading businesses operating today, maintained by family relationships. The metalwork-ing community maintains a balance between the strong family ties and weak social ties, ensuring an optimum flow of information among the businessmen in the community. The engagement with scrap handling produces a sense of pride and a pleasure of innovation that binds this community with waste recycling. Thus, the embeddedness of this community through self-recruitment and trade information via social ties directs the resource flows in the community.

تشكل المشروعات الصغيرة العصب الرئيسي لاقتصاد أي دولة، حيث تعتبر من أهم روافد عملية التنمية الاقتصادية والاجتماعية في جميع دول العالم عامةً وفي الدول النامية خاصة، فهي لا تعمل على توفير فرصٍ عمل وبالتالي مصدرٍ دخل لقطاع عريض من الأفراد... more

تشكل المشروعات الصغيرة العصب الرئيسي لاقتصاد أي دولة، حيث تعتبر من أهم روافد عملية التنمية الاقتصادية والاجتماعية في جميع دول العالم عامةً وفي الدول النامية خاصة، فهي لا تعمل على توفير فرصٍ عمل وبالتالي مصدرٍ دخل لقطاع عريض من الأفراد فحسب، بل تشكل أيضاً دافعاً رئيسياً للمزيد من الابتكارات والتكنولوجيا وتنوع الصادرات، لذلك أصبح الاهتمام بهذا النوع من المشروعات توجهاً استراتيجياً لدى العديد من الدول.
وقد اعتمدت العديد من الدول على المشروعات الصغيرة في عملية البناء الاقتصادي، واستطاعت من خلالها العبور من دائرة الدول الفقيرة لتدخل في مصاف الدول الغنية الكبرى.
والأمثلة على ذلك كثيرة ومتعددة على جميع المستويات؛ فتلك النوعية من المشروعات هي صاحبة الفضل الأساسي في نمو وتقدم وازدهار دول شرق أسيا، كما أن الهند والصين لكل منهما تجربة ناجحة مع تلك المشروعات، حيث استطاعت من خلالها تحقيق أكبر معدلات في التنمية الدولية.
إلا أن هناك مجموعة من المشاكل التي تقف عقبة أمام قيام ونمو هذه المشروعات، وعلى رأسها مشكلة التمويل، فأصحاب هذه المشروعات عادة ما يكونون من المهنيين ولا تتوافر لديهم مدخرات تمكنهم من إقامة مشروعاتهم ، كما لا يوجد لديهم من الضمانات التي يمكن تقديمها للمصارف للحصول بموجبها على قروض - فالمشروعات الصغيرة تعتبر من أوجه الاستثمار عالي المخاطر لذلك فالمصارف تطلب عادة ضمانات يعجز أصحاب هذه المشروعات من توفيرها- هذا بالإضافة إلى وجود عدد لا بأس به ممن يجتنبون مطلقاً الاقتراض من المصارف التقليدية لأسباب دينية.
وهنا يبرز دور المصارف والمؤسسات المالية الإسلامية في تنمية وتطوير المشروعات الصغيرة بما تمثله من أهداف وخصائص - وذلك من خلال تقديم التمويل اللازم لها و بما يتوافق مع أحكام الشريعة الإسلامية، باعتبار أن بعض صيغ التمويل التي يقوم بتقديمها تناسب طبيعة المشروعات الصغيرة.

Islamic micro finance is a growing industry in several Muslim countries such as Bangladesh, Nigeria, and Malaysia. Islamic microfinance is at the heart of Islamic finance as it addresses one of the fundamental roles of financial... more

Islamic micro finance is a growing industry in several Muslim countries such as Bangladesh, Nigeria, and Malaysia. Islamic microfinance is at the heart of Islamic finance as it addresses one of the fundamental roles of financial intermediaries demanded by Shariah. Over the past few decades, many initiatives have taken place to alleviate poverty in Muslim countries. This paper provides the Islamic thoughts and motives behind these initiatives and then, it discusses the mechanisms proposed by Islam to improve the life of poor, prevent them to become poor, and also to improve the general economic relations among members of society. Later on, mudarabah, Musharakah, murabahah, Ijarah, and qard al-hasan are discussed as different types of Shariah compliant contracts that can be used as the base of micro financing business model.

This thesis paper aims to study microfinance operations in Bangladesh. Besides, the study examines Islamic microfinance activities in general. Qualitative methods and secondary data have been used in this study. Since independence,... more

This thesis paper aims to study microfinance operations in Bangladesh. Besides, the study examines Islamic microfinance activities in general. Qualitative methods and secondary data have been used in this study. Since independence, Bangladesh has seen many ups and downs in its economy. In this context, it is notable that the country's per capita income has exceeded around two thousand US dollars in recent years. All the indicators of GDP growth are going upward. The overall economic growth is more than 7% consistently. This study has found that, with the development of microfinance services in Bangladesh since the 1980s, the poverty rate has been decreased, and significant results have been observed. The poverty rate declined gradually since 1991, which was 57% in 1991, decreased to 21% until 2018. Microfinance has an essential place in the economic growth of Bangladesh. By the end of 2018, microfinance institutions have $ 7.17 billion in outstanding annual loans and collected 10.46 billion in the form of paid loans within approximately 31.20 million members. Over the past two decades, Islamic microfinance (IMFs) has been a socio-economic development approach along with traditional microfinance in many countries. This thesis paper concludes that Islamic microfinance plays a vital role in poverty reduction with aid financing tools such as zakat and charity. Islamic microfinance institutions also offer micro-credit by means of various mechanisms based on the principles of sharia such as Karz-i-Hasan, Murabaha, Mudaraba, Takaful, Ijarah, and Salam. Moreover, Islamic microfinance is supporting the strengthening of the economy by financing entrepreneurs and sharing possible risks. Therefore, there is a significant potentiality for Islamic microfinance in achieving the 2030 SDGs.

Purpose - The failure of interest based programmes, such as micro-finance and anti-poverty programmes, in assisting the destitute, eradicating poverty and reducing income inequality encouraged the authors to study in depth the alternative... more

Purpose - The failure of interest based programmes, such as micro-finance and anti-poverty programmes, in assisting the destitute, eradicating poverty and reducing income inequality encouraged the authors to study in depth the alternative financial institutions to interest/riba that can solve such problems rather than harming individuals, communities, societies and countries. This raises the question of whether the different Islamic financial institutions can provide microfinance with zero-interest to eradicate poverty and reduce inequalities
This paper attempts to propose a hybrid model integrating four religious financial institutions to eradicate poverty within a very short period of time in a just manner and in a sustainable way for generations to come. We shall use both primary sources including text from the Quran and the Hadith, and data collected from secondary sources including books, articles, and journals besides World Bank reports from the web sites.
The paper intends to create awareness of the meaningful approach of religion in terms of eradicating poverty, reducing inequalities and creating a fair and just society for all, rather than following man-made system which hurt all societies. Moreover, this paper is also intended to open the door wider for more researchers and postgraduate students to explore their knowledge in depth on these religious institutions and to adjust them according to the current needs of the different societies. We hope to revitalize four neglected Islamic financial institutions and integrating them into a hybrid model for a promising way to eradicate poverty in a just and ethical manner.

This study tries to review the research around Islamic microfinance institution. It uses descriptive statistical analysis based on selected 100 journal publications or paper related to Islamic microfinance institution, both national and... more

This study tries to review the research around Islamic microfinance institution. It uses descriptive statistical analysis based on selected 100 journal publications or paper related to Islamic microfinance institution, both national and international journal. The entire sample journal publications have published for ten years from 2007 to 2016. The Results show that Islamic microfinance institute research is still dominated by the discussion about Islamic microfinance institution (54%), followed by eradication of poverty (25%), then financing the poor societies (11%) and the last is about management of Islamic microfinance institution (10%). In addition, Indonesia, Malaysia and Pakistan are being the highest of Islamic microfinance study area, while the majority of publications area are from Indonesia, United States and United Kingdom. Furthermore, the comparison of quantitative research and mixed methods are still less than the qualitative approach.

This paper shades light on the ‘loan repayment pressure’, which is allegedly exerted by the Micro-Finance Institutions (MFIs) on their borrowers in Bangladesh. A qualitative study was carried out to assess the experiences of the... more

This paper shades light on the ‘loan repayment pressure’, which is allegedly exerted by the Micro-Finance Institutions (MFIs) on their borrowers in Bangladesh. A qualitative study was carried out to assess the experiences of the borrowers, who are engaged with Building Resources Across Communities (BRAC), Grameen Bank (GB) and Association for Social Advancement (ASA). The observations and findings from the in-depth interviews highlight the effects of repayment pressure imposed on the borrowers. This pressure pushes the borrowers into a vulnerable economic condition while disharmonising their social and family lives. Thus, this study provides a deeper understanding of repayment issues. So far, very few studies have been carried out in Bangladesh on this particular topic. Findings of this study can add value to the current literature by providing insights on the forced loan recovery technique and its negative effects.

Purpose – The main purpose of this paper to review the conventional microfinance concept which based on riba and replace it with Islamic microfinance through Koperasi incorporated with Islamic bank in Indonesia.... more

Purpose – The main purpose of this paper to review the conventional microfinance concept which based on riba and replace it with Islamic microfinance through Koperasi incorporated with Islamic bank in Indonesia. Design/methodology/approach – The paper is based on comprehensive review of conventional microfinance with the objective to propose a new Islamic microfinance model that based on Shariah. Findings – This paper reviewed the concept of microfinance base on the traditional financial intermediary. Moreover, other than building human capacity through social intermediation and designing group-based lending programmes are proven to be among the effective tools to reduce transaction costs and lower exposure to numerous financial risks in relation to providing credit to the rural poor in many countries especially in India (Gramen Bank). This paper also suggests to trained the group regarding to management and business and the concept of 'Ashabiyyah and Ta'awun (cooperative among the members) also given to strengthen the model. Therefore, this paper suggests to Islamic bank to use Koperasi as a partner as one of the possible alternatives to finance the potential poor. Research limitations/implications – Islamic bank may benefit from different sources of fund, not only from the bank, but also from Infaq, Sadaqah, and Zakat to finance the potential poor. The use of Koperasi in this model is to revive the BRI concept of Koperasi who had ever advanced in the past by adding Shariah values in the model. Originality/value – The analysis is valuable in drawing the attention of Islamic banking practitioners to the fact that this model can be implemented without compromising the institutional viability, competitiveness and sustainability. This is evident from Koperasi intermediation model where they can always monitoring the group and each group members monitoring other members.

The purpose of this paper is to explore the possibilities of adapting Islamic microfinance into a complex situation such as international refugee crisis while reviewing the nature and practices of Islamic microfinance. The methodology of... more

The purpose of this paper is to explore the possibilities of adapting Islamic microfinance into a complex situation such as international refugee crisis while reviewing the nature and practices of Islamic microfinance. The methodology of this paper consists of critical review and examination of existing literature and experiences. The results indicate that Islamic microfinance has huge potential to address the refugee crisis but the practice is relatively very few. The study witnessed few experiences but mostly limited and short lived as well as focused only on one or two financial contract mainly Murabaha mode of financing. The experiments show that the practice in refugee camps is highly risky due to number of reasons including geographical, political, and legal and other unsolvable obstacles. Yet, the demand is increasing due to increased high volume of refugees around the world and their idleness inside the camps. On the other hand, United Nations, international humanitarian and charitable organisations including Zakah and Waqf funds spend huge amount to provide assistance to refugees. The main purpose of this thesis is to connect these two realities while providing long term and sustainable solutions.

In order to provide financial services effectively to almost 1.21 billion people, India has adopted a comprehensive financial system governed under a number of financial regulations. These regulations, through regular amendments, are kept... more

In order to provide financial services effectively to almost 1.21 billion people, India has adopted a comprehensive financial system governed under a number of financial regulations. These regulations, through regular amendments, are kept updated and inclusive of modern financial concepts that emerge in national and international markets. Islamic finance is one of such modern concepts emerged at global level. Growing with an annual growth rate of 15-20 percent the Islamic finance industry is holding total assets, value estimated to be more than USD 1.6 trillion. Hence, the authors, in this paper tried to study the feasibility of providing Islamic financial services in India, especially in the areas of Retail banking, Microfinance, Venture Capital financing. The objective of this paper is to identify the major regulatory challenges facing Islamic finance and to propose the possible solutions so as to make this emerging industry an internal part of the Indian financial system.

One of the most devastating economic challenges facing the Muslim world is the increasing rate of unemployment, which has devastated the youth and has become alarming. The phenomenon of unemployment has reached level that threatens the... more

One of the most devastating economic challenges facing the Muslim world
is the increasing rate of unemployment, which has devastated the youth and
has become alarming. The phenomenon of unemployment has reached level
that threatens the future of this generation which is seen as the pillar and key
factor for the growth of the entire Ummah. There are many ways to curb the
disease of unemployment; however, the discussion in this research focuses
on the role of small business due to its global merits and achievement in
reducing and eliminating unemployment. The paper would approach it in a
new dimension stressing more on the role of the Prophetic (Sunnah) tradition
in the administration and financing of small businesses. The paper initiates its
discussion with a theory which states that: there are some acts reported in the
Sunnah that can contribute to reduction of unemployment and can be harnessed
to finance and administer small businesses. This research aims at compiling
hadith related to administration of small business and ways to financing it. It also
derives fundamental basis which can be easily neglected in contemporary deals.
The paper also attempts to proffer practicable proposal to guide small business
in light of Sunnah. In order to actualise the very of objectives of the paper and to
address its challenges, it has been categorised into three, namely: small projects,
Sunnah guidance for employers, financing of small projects/businesses in line
with Prophetic requirements. The research finds multiple results among which
are: the Prophet (May Allah bless him) (Sunnah Amaliyyah) gives directions
in his tradition on strategies for financing small businesses as means to combat
unemployment.
.Keywords: Small businesses, Sunnah

Islamic financial intermediaries play a vital role in mobilising and circulating funds in the society, from the haves to have-nots. Since an Islamic financial intermediary is the focal point of equitable financial redistribution at the... more

Islamic financial intermediaries play a vital role in mobilising and circulating funds in the society, from the haves to have-nots. Since an Islamic financial intermediary is the focal point of equitable financial redistribution at the basic level, it is imperative to undertake the study of socioeconomic effects of such institutions in the given area of its operation. Therefore a comprehensive assessment of their socioeconomic impact on the beneficiaries with respect to the nature of the institution is necessary. This works aims to utilize social capital theory to assess both, the institution and its performance in terms of self-sufficiency, outreach and performance as well as the impact on beneficiaries in terms of social and economic indicators.

In this paper the authors attempt to present a list of theories from the developing discipline of Islamic Marketing. The list is neither exhaustive nor a detailed description of all the attempts toward a body of theory in Islamic... more

In this paper the authors attempt to present a list of theories from the developing discipline of Islamic Marketing. The list is neither exhaustive nor a detailed description of all the attempts toward a body of theory in Islamic marketing. Indeed, it is not the intention of this work to provide such detail. Rather, this commentary is designed to motivate researchers to begin to address the subject of Islamic marketing in a manner that will pave the way for a more comprehensive body of theory of Islamic marketing to be constructed, a subject that remains so clearly under researched.

Microfinance has a mission to alleviate poverty through two bottom line namely financial intermediation and social intermediation. Nevertheless, there has been mission drift from poverty reduction through the provision of microcredit... more

Microfinance has a mission to alleviate poverty through two bottom line namely financial intermediation and social intermediation. Nevertheless, there has been mission drift from poverty reduction through the provision of microcredit services to the poor to a commercial mission to pursue profitability, leaving the poor in their activities; in addition, there has been a trade-off between the outreach to the poor and financial sustainability. This paper is a literature review that aims to obtain an effective conceptual model of Islamic keuangan mikro institution in Indonesia by using an intermediation approach. The results of the literature review showed that the triple intermediation approach (i.e. social, financial and spiritual intermediation) conducted simultaneously by Islamic keuangan mikro institutions (Baitul Maal wattamwil) can be an effective model for keeping Islamic keuangan mikro institutions on the mission to alleviate poverty by providing micro-finance services to even the poorest customers, keep their business profitable, and also remain true to Islamic principles

Microfinance has been recognized by the World Bank as an approach to address poverty and income inequalities, where the social and economic problems of developing communities raised a global challenge to carry the mission of poverty... more

Microfinance has been recognized by the World Bank as an approach to address poverty and income inequalities, where the social and economic problems of developing communities raised a global challenge to carry the mission of poverty alleviation. Recent researches argues that many elements of microfinance are considered to coincide with the Islamic banking broader goals, and thus, Islamic banks can be a more effective and efficient provider of financial services to the poor. The paper investigate the Islamic finance nexus with microfinance program and initiates a consideration which triggers and motivates further research and debates exploring more potential for Zakah and Waqf integration in microfinancing schemes. An application of a not for profit based microfinance model is more convenient and more befitting the ultimate and conclusive goal of microfinance according to the paper, several arguments standing in support of this believe will be discussed. Statistics shows that in 2014, 15% of the Turkish population was below poverty threshold, leaving the participation banks in Turkey with a responsibility to comply with the social objective of Islamic Finance and positively contribute as an efficient and dynamic provider of microfinance services and serve the mission of poverty alleviation. A Joint venture between the participation banks in Turkey is proposed with a strategic partnership with reputable charity institutions, in which a collaboration to establish a separate not for profit based institution to provide microfinance services.

Microfinance has become one of the most sustainaeffective tools in the fight against global poverty. Islamic microfinance has the potential to not only respond to unmet demand but also to combine the Islamic social principle of caring for... more

Despite growing rapidly, but Islamic cooperatives are still experiencing many obstacles in its development, both from the internal, external and regulatory side. This study attempts to identify the factors of needs, activities, and... more

Despite growing rapidly, but Islamic cooperatives are still experiencing many obstacles in its development, both from the internal, external and regulatory side. This study attempts to identify the factors of needs, activities, and objectives in the development of sharia cooperatives in Indonesia, using the Interpretative Structural Modelling (ISM) approach. The results of this study provide some conclusions include: (1) Elements of the needs of the key key in sharia cooperative development strategy in Indonesia to improve SMEs is the need for strong support on the legal aspects of sharia cooperatives, (2) Elements of activities that are key to Shariah cooperative development are to conduct training and certification programs for shariah cooperative management and members, and (3) Elements of actors/institutions that are key in sharia cooperative development strategy in Indonesia to improve UMKM is sharia financial institution. Abstrak: Walaupun tumbuh dengan pesat, namun koperasi syariah masih mengalami banyak kendala dalam pengembangannya, baik dari sisi internal, eksternal maupun regulasi. Penelitian ini mencoba untuk mengidentifikasi faktor-faktor kebutuhan, aktifitas dan tujuan dalam pengembangan koperasi syariah di Indonesia, dengan pendekatan metode Interpretative Structural Modelling (ISM). Hasil penelitian memberikan beberapa kesimpulan, antara lain: (1) Elemen kebutuhan yang menjadi kunci utama dalam strategi pengembangan koperasi syariah di Indonesia untuk meningkatkan UMKM adalah perlu adanya dukungan yang kuat pada aspek hukum koperasi syariah, (2) Elemen aktifitas yang menjadi kunci utama dalam pengembangan koperasi syariah adalah mengadakan training dan program sertifikasi bagi manajemen koperasi syariah dan anggota, dan (3) Elemen pelaku/lembaga yang menjadi kunci utama dalam strategi pengembangan koperasi syariah di Indonesia untuk meningkatkan UMKM adalah lembaga keuangan syariah. Kata Kunci: Koperasi Syariah; Lembaga Keuangan Mikro Syariah (LKMS); Interpretative Structural Modelling (ISM).

Five important things can be concluded from this study. First, sukuk has been practiced by Gapoktan in Indonesia as a local wisdom to find an alternative financing for working capital of the farmers. In this context, sukuk has been a... more

Five important things can be concluded from this study. First, sukuk has been practiced by Gapoktan in Indonesia as a local wisdom to find an alternative financing for working capital of the farmers. In this context, sukuk has been a microfinancing instrument for their community. Second, the sukuk linkage program developed by Islamic banks and IMFIs through proposed models can reinforce the Islamic microfinance for the poor, low-income people or micro-enterprises. The important thing why sukuk should be presented is to convert the debt financing orientation to equity financing orientation. Third, sukuk has an ability to be a bridge linking financial sector and the real sector and encourages Islamic banking to be more grounded and can substantially assist the needs of the community. This proves that sukuk can position as tool for managing the lack and excess of liquidity. Forth, IMFIs need support from government, especially OJK, to assist a regulatory framework for Islamic microfinance, to support policy makers to ensure an enabling policy framework conducive to the development of Islamic microfinance, to build an effective alliance and forum of Islamic microfinance providers and other stakeholders. Fifth, reconciling Islamic banks to IMFIs is one answer to overcome the problem of liquidity in the respective institutions. This is also the answer to the challenge of how to convert the debt into equity financing orientation and encourage Islamic banking can meaningful assist the micro sector.

The paper takes on board lessons from ILO's projects on bonded labour, in India, Nepal and Pakistan; and projects that work with bonded labour and extreme pooor by other donors in these countries. The lessons show how microfinance... more

The paper takes on board lessons from ILO's projects on bonded labour, in India, Nepal and Pakistan; and projects that work with bonded labour and extreme pooor by other donors in these countries. The lessons show how microfinance products and services may be designed to be useful to extremely vulnerable and socially excluded groups. The limitations of microfinance are elaborated, too, with emphasis on asset transfers and other means of providing support till the bonded labour and extreme poor are able to avail of credit services.

Islamic microfinance has been widely recognized as an effective development tool for poverty reduction and wellbeing development, especially among those who are deprived of accessing to conventional credit services. The interested things... more

This paper attempts to elucidate the micro financing products and business models of micro finance in Baitul Maal Muamalat (subsidiary of Bank Muamalat Indonesia). During 2010 Bank Muamalat has been distributed the social fund through BMM... more

This paper attempts to elucidate the micro financing products and business models of micro finance in
Baitul Maal Muamalat (subsidiary of Bank Muamalat Indonesia). During 2010 Bank Muamalat has been
distributed the social fund through BMM as much as Rp 22.8 billion. The funds are distributed in the form
of the micro financing program for economic empowerment through LKMS and KUM3 program. LKMS
program is channeling fund to Islamic Micro Finance Institutions (IMFIs) through linkage program. While
KUM3 program is channeling micro financing to 24 cities that are consist of 183 mosques and 4647
Mustahik (poor recipients). This program encourages Mustahik to increase their business line with modern
business management. The program mission are to facilitate the micro business community through the
utilization of ZIS (Zakat, Infaq and Sadaqah) funding, to build organization quality of the mosque as a
basis of development and strengthening the quality of brotherhood as the basis for the establishment of
micro enterprises, encourage the habit of giving, and create awareness of modern business management and
ensure the business activity free from Maysir, Gharar, and Ribā. There are three kinds of financing
program of KUM3 which are Aqh Model, second, Qard model and the third is Musharakah model. The
KUM3 financing model is Sharīcah based model that use a variety of Islamic contract such as profit and
loss sharing system between participants. In addition, BMM arranged the curriculum model of financing
through the KUM3 program.
Keywords: Baitul Maal Muamalat, Micro financing, Business Model

Despite being heralded as an acclaimed method for poverty reduction worldwide, the key aspects of traditional microfinance have created a sociological as well as psychological barrier in the Muslim social and intellectual hegemony in... more

Despite being heralded as an acclaimed method for poverty reduction worldwide, the key aspects of traditional microfinance have created a sociological as well as psychological barrier in the Muslim social and intellectual hegemony in Bangladesh. The high interest-based loans, encouraging the poorest population for a shortcut but unstable route for development and the overwhelming focus on women as the beneficiaries of microfinance are few of the many aspects of the problem. The question regarding the effectiveness of microfinance as a tool for social justice is also under serious scrutiny worldwide. At the same time, the concept of Islamic microfinance is slowly taking shape in some Muslim countries including Bangladesh, aiming to solve the strategic problems with microfinance. By rectifying the ideas of microfinance with the general tools of Islamic financial mechanisms in the grass root level with a proper management of the Zakat can accelerate the process of poverty alleviation in Muslim countries. Finding Shariah accepted solutions for the shortcomings of mainstream microfinance and effective implementation of those approaches will be an effective tool for ensuring sustainable development as well as establishing social justice in Muslim world.

ABSTRAKSI Upaya pengentasan kemiskinan dapat dilakukan antara lain dengan memutus mata rantai kemiskinan itu sendiri, diantaranya adalah dengan pemberian akses yang luas terhadap sumber-sumber pembiayaan bagi Usaha Kecil dan Mikro (UKM)... more

ABSTRAKSI Upaya pengentasan kemiskinan dapat dilakukan antara lain dengan memutus mata rantai kemiskinan itu sendiri, diantaranya adalah dengan pemberian akses yang luas terhadap sumber-sumber pembiayaan bagi Usaha Kecil dan Mikro (UKM) yang dilakukan oleh lembaga-lembaga keuangan bank maupun lembaga mikro. Lembaga keuangan mikro yang saat ini sedang fenomenal adalah Grameen Bank (GB) yang diprakarsa Muhammad Yunus di Bangladesh. Setelah Yunus mendapat Nobel Perdamaian dari PBB, Grameen kemudian mendunia. Tulisan ini mencoba untuk menelisik lebih jauh tentang Model Pemberdayaan Masyarakat Grameen, dampak positif-negatif hingga pandangan Ekonomi Islam tentangnya. Hasil penelitian menunjukkan bahwa beberapa sisi positif GB nampak jelas terlihat, meski beberapa hal tidak sejalan dengan prinsip ekonomi Islam: bunga yang relatif tinggi dan womensentris.

Despite the impressive score card of the Millennium Development Goals (MDGs), it goes to suggest that the Sustainable Development Goals (SDGs) requires targeted efforts in reaching the most vulnerable people worldwide. In Muslim... more

Despite the impressive score card of the
Millennium Development Goals (MDGs), it goes to suggest
that the Sustainable Development Goals (SDGs) requires
targeted efforts in reaching the most vulnerable people
worldwide. In Muslim societies, Islamic Micro-finance has
been regarded as an important tool for the empowerment of
poor people especially women, towards developing micro
enterprises. The main objective of this study is to explore the
conceptual framework on the relevance of Islamic Microfinance
in achieving the SDGs. This study identifies different
products of Islamic Micro-finance used to address diverse
deprivations, leading to individual’s personal development,
increased productivity and income, and participation in
economic and social life. The methodology of this study is
based on analysis of relevant literatures. The finding of the
study indicates that Islamic Micro-finance is a growing
market niche with potentials to develop human capabilities
towards empowerment, knowledge and skills, self-reliance
and social cohesion. The empowerment enables the clients to
manage their economic life effectively and reduce stress.

Abstract This study aims to examine the effect of Service Quality on the satisfaction of the SMEs owners on the Islamic Microfinance Products. Due to the increasing importance of Islamic banking and financing system, the concern is to... more

Abstract
This study aims to examine the effect of Service Quality on the satisfaction of the SMEs owners on the Islamic Microfinance Products. Due to the increasing importance of Islamic banking and financing system, the concern
is to what extent this system can satisfy the consumers and contributes to the overall economic development. The
model of this study was developed to examine the effectiveness of Islamic banking and financing system. To test
the hypothesized model, the data were collected from the SMEs owners in Yemen through a self-administered
questionnaire. Out of 250 distributed questionnaires, 151 were returned and were used for data analysis. The
results of this study shown the significant effect of Service Quality on the SMEs owners’ satisfaction and the
perceived benefits obtained through their dealing with Islamic Microfinance system. In addition, the results of
this study confirmed that the perceived benefit partially mediates the relationship between Service Quality and
SMEs owners’ satisfaction. However, the moderating effect of perceived benefits on the relationship between
service quality and satisfaction was not confirmed.
Keywords: Islamic banking and finance system, Islamic micro-finance system, service quality, customer
satisfaction, partial least squares, SMEs/Yemen

This paper designs a conceptual model of Islamic microfinance and reha-bilitation by using the waqf funds for the slum and floating population. It analyzes both the primary and the secondary data on the current status of Islamic... more

This paper designs a conceptual model of Islamic microfinance and reha-bilitation by using the waqf funds for the slum and floating population. It analyzes both the primary and the secondary data on the current status of Islamic microfinance cover-age (in thirteen countries), waqf estates (in seven countries), and the slum and floating population in thirty five Muslim countries of the world. The primary data was accumu-lated on 150 microfinance borrowers and 100 non-borrowers of Bangladesh. This pa-per presents a multifunctional structure of an autonomous waqf management institution to execute the model of this paper. This institution will be formed by the joint venture of the government, the national, as well as international Islamic agencies. Furthermore, this model will be implemented through five stages, the revival and registration of the waqf estate, accumulation of funds, initiating the Islamic microfinance and rehabilita-tion for the slum population, and finally, forward linkage that may help the slum people to contribute to the society
Keywords: Waqf, Islamic Microfinance, Rehabilitation, Slum population, Muslim countries.
JEL Classification: G21, O21, Z12 KAUJIE Classification: E23, H15, S4

This research paper provides in-depth discourse on how justice can be operationalising in different Islamic financial institutions to achieve the objectives of the Islamic moral economy. The current financial institutions claiming to be... more

This research paper provides in-depth discourse on how justice can be operationalising in different Islamic financial institutions to achieve the objectives of the Islamic moral economy. The current financial institutions claiming to be Shari'ah compliant are more and more reflecting the behaviour of conventional financial institutions in terms of their impact on society. The paper proposes development of new Islamic financial institutions to endogenise the concept of justice based on the teaching of Qur'an and Sunnah. This will allow actualizing an ideal Islamic society based on equality, cooperation , and welfare with overall objective of the welfare of human beings through development of non-banking-financial institutions such as Islamic social banking, and zakah and awaqf based institutions and eventually promoting economic development. Furthermore, development of such institutions will also contribute to the financial inclusion of society.

After 2008 world economic crises, banks and other financial institutes move towards Islamic financing not only in Muslims countries but also in non-Muslim countries of the world. In view of this, some micro financial institutions also... more

After 2008 world economic crises, banks and other financial institutes move towards Islamic financing not only in Muslims countries but also in non-Muslim countries of the world. In view of this, some micro financial institutions also introduce Islamic micro financing products in Pakistan. The present study was conducted to analyze the role of Islamic microfinance to alleviate poverty in Pakistan its impacts, people satisfaction level and assess the future of it in Pakistan. An Empirical approach has been adopted due to lack of knowledge to clients about products, technical terms, lack of time, and we come to know the changing improvement in the eyes of those people who directly involve in this system. Questionnaire was used as a tool for data collection. The qualitative data was quantified and chi-square test was applied to test the association of attributes by 5% level of significance. Our analysis concluded that Islamic microfinance playing an important role to improve the living standard, per capita income, awareness level (Educational level), ethical values, profitability, sustainability, infrastructure position, employment level in the society, helpful to control the inflation and unequal distribution of wealth. People are more interested due to religious prospective and prohibition of riba in Islam as well as in Christianity but there should be proper regularity authority to control over it in order to get fruitful results through an implementable model.

Objective - Women entrepreneurs have positive contribution to the household economy in particular, and the sustainable economic development in general. Nevertheless, there are limitations in mobility for women entrepreneurs, especially in... more

Objective - Women entrepreneurs have positive contribution to the household economy in particular, and the sustainable economic development in general. Nevertheless, there are limitations in mobility for women entrepreneurs, especially in Muslim countries to conduct their business activities outside the home, which was due to concern, to take care of their children, and the values or customs, which is embraced by the local community, so that limited mobility of women entrepreneurs, not because of the Islamic religiosity. Therefore, is requires form of technology solutions for women entrepreneurs, which can reduce, the limitations.
Methods - literature review
Results - the role of mobile banking as well as branchless banking for women entrepreneurs has been shown to have a very important role to connect their access to financial services. The role of education for women, is also an important factor to improve the knowledge and ability to use technology, including mobile banking services. In addition to the phenomenon of the increasing number of women entrepreneurs and the growing literacy of women in developing countries such as Indonesia and Bangladesh, it will have an impact on increasing the professionalism of women entrepreneurs, and the demand for technology-based financial services such as mobile banking.
Conclusions - Implementation of this program must have the support of all stakeholders, including the cooperation between the banks with microfinance institutions to expand the reach of the benefits of this technology.