2. Presented by :
MUHAMMAD MEHRAN
M.COM (Finance)
Supervisor :
SIR SOHAIL AHMAD
I.B.M.S
UNIVERSITY OF AGRICULTURE
FAISALABAD
3. Introduction to Islamic Microfinance
Principles of Islamic Microfinance
Riba ( Interest )
Modes of Islamic Microfinance
Difference between Islamic &
Conventional Micro Finance
Islamic Micro financing in Pakistan &
Worldwide
4. Means of providing financial services to poor
Average transaction size is very small
Services offered by profit and non-profit
organizations
Microcredit, micro savings, micro insurance,
and other transactional products
5. Islam
Aqidah
(Faith & Belief)
Shariah
(Practices & Activities)
Akhlaq
(Morality & Ethics)
IBADAT
(Man to God Worship)
Muamalat
(Man to Man Activities)
Political Activities Economic Activities Social Activities
Banking & Financial Activities
8. Prohibition of Interest
Risk sharing
Social Development Mission
Prohibition of speculative behaviour
Purity of contracts
Asset Based Financing
Shariah-approved activities.
9. And ALLAH has permitted trading and forbidden Riba
(Al Baqara 275)
Islam encourages the earning of profits but forbids the
charging of interest.
13. Functions and operations are
based on fully man made
principles
Functions and operations are
based on Sharia’h principles
assured of pre-determined rate
of interest
Promote risk-sharing between
provider of capital (investor) and
user of funds (entrepreneurs)
Aim at maximising profit without
any restrictions
Aim at maximising profit but
subject to Sharia'h restrictions
Creditor-Debtor relationship Partners, investor and traders,
buyer or seller relationship
Based on money trading. Money
is a medium of exchange and
not a commodity
Encourage asset-based
financing and based on
commodity trading & Services
Conventional Micro
Finance
Islamic Micro Finance
14. It is almost risk free banking and
depositor has no risk of losing its
money because interest is
guaranteed.
No right of profit if there is no risk
involved. The profit and loss
sharing depositor may lose
money in case of loss.
It can charge additional money in
case of defaulters
Islamic banks have no provision
to charge any extra money from
the defaulters
Conventional Micro
Finance
Islamic Micro Finance
15. Customer to Halal Restaurant Owner
Halal Restaurant Owner to Halal Meat
Supplier.
Halal Meat Supplier to Halal Butcher.
Customer to Islamic Banker
Islamic Banker to Shariah Scholars
16. Year 2001
•Meezan Bank
•Al Baraka
•Meezan Bank
•Al Baraka
•MCB
•Alfalah
•SCB
•Bank AlHabib
•Habib AG Zur.
•Metropolitan
•Bank of Khyber
•Soneri Bank
2002 2003
•Meezan Bank
•Al Baraka
•MCB
•Meezan Bank
•Al Baraka
•MCB
•Alfalah
2 10
2012- 14
•Meezan Bank (161)
•Al Baraka (30)
•MCB (8)
•Alfalah(40)
•SCB (11)
•Bank AlHabib(4 )
•HMB(4)
•Bank of Khyber(16)
•Soneri Bank ( 5)
•HBL(1)
•Bank Islami(102)
•DIB (25)
•EGIBL (40)
• Dawood(21)
•NBP(5)
•RBS (3)
•Askari(18)
•UBL (5)
2007 - 09
1843
17. The size of Islamic Financial Industry has reached US$ 950
Bln. and its growing annually @ 15% per anum.
70 countries have Islamic Banking Institutions
37 Muslim countries including Bahrain, UAE, Saudi Arabia,
Malaysia, Brunei and Pakistan
34 non-Muslim countries including USA, UK, Canada,
Switzerland, South Africa and Australia
18. .•United States: 4
•Kiva
•Helping Hands
•Muslim Aid
•Lariba
•Germany:
2
•- Muslim
Society
•Switzerla
nd: 6•UK:
•- HSBC Amanah
•- Muslim Aid
•- Islamic Relief
•- The Halal Mutual
Investment
Company
•Bahrain: 2
•Malaysia: 11
•2 - Pure Islamic
Banks (Bank Islam,
Bank Muamalat)
•Rest - conventional
banks
•UAE: 8
•- Dubai Islamic Bank
•- Abu Dhabi Islamic
Bank
•- HSBC Amanah
• Afghanistan: 4
•- FINCA , WOCCU
•- CHF
• Ariana
•Kuwait: 2
•- Kuwait
Finance House
•Iran: 8
•Egypt: 9
•- Alwatany Bank of
Egypt
•- Egyptian Saudi
Finance
•Indonesia: 4
•Sudan: 3
•Pakistan:
11
•India: 3
•Banglades
h:9
•Turkey: 7
•- Faisal Finance
Institution
•- Ihlas Finance
House
•Yemen: 1
Islamic Microfinance Institutions
Worldwide
