Conference presentation (irsd)
Upcoming SlideShare
Loading in...5
×
 

Like this? Share it with your network

Share

Conference presentation (irsd)

on

  • 509 views

 

Statistics

Views

Total Views
509
Views on SlideShare
509
Embed Views
0

Actions

Likes
0
Downloads
3
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Conference presentation (irsd) Presentation Transcript

  • 1. International Conference onIslamic Microfinance
    Organized By :
    CENTER OF ISLAMIC BANKING & ECNOMICS
    Held At:
    Faisal Auditorium Islamabad
  • 2. ISLAMIC MICROFINANCECHALEENGES AND OPPORTUNITIES
  • 3. ISLAMIC FINANCE & MICRO FINANCE
    Islamic economic goals of;
    equality, fairness, social solidarity through risk sharing, property rights, and the sanctity of contracts; entrepreneurship, partnership, income generation through productive activity for poverty alleviation are consistent with elements of Micro Finance.
    A successful marriage of both in Islamic Microfinance should reinforce each other.
  • 4. DISCONTENTS OF IF & MF IN PRACTICE
    Islamic financial services industry has shown little interest in MF and poverty alleviation aiming for Shariah compliance in form not in spirit.
    Conventional MF industry has shown inadequate interest in religious and cultural sensitivities; also largely excludes the poorest of the poor.
    Islamic MF for enhancing financial inclusion
  • 5. ISLAMIC MICRO FINANCE EXPERIMENTS
    MENA: Sanadiq at Jabal al-Hoss, SYRIA
    Mu’assasatBayt Al-Mal in LEBANON
    HodeidahProgram in YEMEN
    IBBL, SIBL in BANGLADESH
    Akhuwatin PAKISTAN
    Manarain INDIA
    FINCA in AFGHANISTAN
    Amana Ikhtiarin MALAYSIA
    BPRS, BMTs in INDONESIA
    AzaouadFinance in NORTHERN MALI
  • 6. Issues of Islamic Microfinance
    Sustainability
    Most of the programs are not sustainable in Pakistan
    Overall Operational and Financial Sustainability records at 89% and 74%, respectively.
    High interest rates eats up sustainability of clients
    Transparency
    Flat interest rates, un-explained fees, hidden charges
    High Cost Debt Economy than Real Economy
    Separates finance from real economy
    Absence of cooperation when client loses
    Exclusion
    Self-exclusion due to prohibition of interest
    Poorest of the poor and Women in gender segregated societies
  • 7. Role of Islamic Microfinance
    Developing social capital among clients and MFI, instead of clients only
    Meeting Demand For Islamic Microfinance
    Promoting Entrepreneurship
    Debt not allowed in Islam as usual practice
    Asset creation and entrepreneurship is promoted
    Transparency and Sanctity of Contracts
    Islamic values prevent violation of contract and require disclosure of full knowledge relating to financial transaction
  • 8. Issues for Islamic Microfinance
    Regarding MFIs
    Limited number of IMFIs (i.e. 4 – 6)
    Limited resource base of IMFI
    Ineligibility of collecting savings
    Product concentration in Murabaha
    Capacity building of MFI
    Sharia advisory
    Regarding Islamic banks
    Perception about microfinance as high risk area
    Informal sector environment
    Absence in rural areas
    Absence of credit guarantee scheme
  • 9. Recommendations
    Corporate Social Responsibility: Fard al Kafaya
    Business case:Profits and high rate of recovery
    Limitations: Informal sector/regulatory implications, absence in rural areas
    Possible Course of Action:
    Phase – I:
    Linkage with MFIs [Mudaraba or Musharaka]
    Urban Operation through Islamic MF Division or Cell
    Phase – II
    Linkage continues
    Extension of branches in rural areas
  • 10. Thank You
    CENTER OF ISLAMIC BANKING & ECNOMICS
    Head Office: 192- Ahmad Block, New Garden Town , Lahore, Pakistan Ph: +92-42-35913096-8, 35858990, 38407850 Fax: +92 -42-35913056E-mail : info@alhudacibe.com
    Web: http://www.alhudacibe.com