Microfinance

Islamic #cooperatives can help alleviate poverty

According to the Central Statistics Agency, Indonesia’s poverty rate is at 10.70% as of the second half of 2016. The rapid growth of Islamic finance presents an opportunity to address the social and economic gap. However, behind the success of Islamic finance is the reality that this development is diverting from the fundamental goal of Islamic law. Mehmet Asutay, a professor in Islamic finance at Durham University, argues that the development of Islamic financial institutions have neglected Islamic social goals. The Baitul Maal wat Tamwil (BMT) can be one solution in empowering the poor. As a microfinance institution, the BMT may provide better outreach as it is more accessible to the poorest people. The small amount of credit may encourage them to engage in financing activity. BMT lacks formalization and supervision, the government is expected to strengthen Islamic microfinance by linking BMT to robust capital injectors.

IDP and JCSB partner to grow #SME businesses

The Islamic Corporation for the Development of the Private Sector (ICD) and JSCB Microkreditbank Uzbekistan have entered into a Joint Strategic Collaboration to finance SMEs in Uzbekistan. The Line of Financing facility agreement for the amount of USD 12 million was signed by the CEO of ICD, Khaled Al-Aboodi and the Acting Chairman of JSCB Microkreditbank, Shukhrat Rasulov. The collaboration will focus on developing the private sector especially SMEs, improving the living standard, generating tax revenues for the government and promoting Islamic Banking in the country. Khalid Al-Aboodi stated that ICD was pleased to extend a line of financing facility to Microkreditbank which will enhance the impact of socio-economic development. Shukhrat Rasulov welcomed the partnership with ICD and ensured that JSCB was committed to providing professional banking services while promoting private entrepreneurship in the Republic of Uzbekistan.

Egyptian central bank to launch a #microfinance initiative next Tuesday

Egypt’s central bank is launching its anticipated microfinance initiative to support the country’s small and medium-sized businesses. According to the new initiative, the banks will not be obliged to establish a special unit for microfinancing; as they can provide both direct and indirect lending to clients. The Central Bank of Egypt (CBE) plans to allocate 20 billion Egyptian pounds ($1.2 billion) for the microfinancing activities in the country. CBE deputy governor Gamal Negm announced earlier that the central bank is preparing the ground to launch an initiative dedicated for the microfinance sector before the end of this month.

$100m fund launched in #Bahrain to help #SMEs growth

A $100 million fund has been launched in Bahrain to invest in the country's small and medium-sized enterprises (SMEs). The initiative has been unveiled by the Islamic Corporation for the Development of the Private Sector (ICD) in partnership with Ibdar Bank and Labour Fund Tamkeen. The Bahrain SME Fund is a Shariah compliant mezzanine private equity fund which will target SMEs with high growth potential in consumer, industrial, ICT, education and healthcare sectors. Khalid Al Aboudi, CEO of the ICD, said that SME support is at the centre of ICD’s strategy as they seek to facilitate further prosperity in Islamic countries. Ahmed Al-Rayes, CIO of Ibdar Bank, added that the creation of this fund is aligned with the Bank’s mission to support Bahrain’s economic diversification through private sector growth.

RHB Islamic To Disburse RM50 Million For #Entrepreneurs

RHB Islamic Bank is expecting to disburse at least RM50 million this year to facilitate the development of entrepreneurs. The fund is part of the Teras Fund programme provided via the Bumiputera Agenda Steering Unit (Teraju). According to RHB Islamic Bank's CEO Datuk Adissadikin Ali, the collaboration with Teraju had so far disbursed RM200 million as of 2016 from the total fund raised of RM400 million. He said the original fund for the programme was RM80 million, but RHB Islamic managed to raise the fund by leveraging on resources to RM400 million.

Al Rayan Bank & Islamic Relief partner to support Sharia-compliant #microfinance

Al Rayan Bank has appointed Islamic Relief as its exclusive charity partner for 2017. The bank will work with Islamic Relief by supporting Sharia-compliant microfinance projects through fundraising activities. The projects will help people living in poverty to establish social enterprise businesses in their home countries and become financially independent. One of the projects is in Mali, West Africa. The project helps local women by making money available using the Islamic finance principle of Qard Hasan (loan without benefit). The women are then able to use the money to commercially harvest the nut of the African Shea tree and create Shea Butter, which they can then use to make various products. Seema Khan, head of major gifts at Islamic Relief UK, said the microfinance partnership with Al Rayan Bank is an intelligent solution to helping people around the world out of poverty.

#Zurich: #Responsible #Finance & Investment Summit 3-4 May 2017

Summit will explore intersection of #fintech, #ESG and #Islamicfinance. #RFISummit17

January 24, 2017, Zurich, Switzerland –

Bringing together a diversity of perspectives is critical for continuing the growth occurring within responsible finance. On this premise, the Responsible Finance & Investment Summit 2017 will convene in Zurich, Switzerland from 3-4 May 2017 around the theme “Building Bridges, Expanding Impact”.

Recent estimates from industry stakeholders show continued growth in responsible finance assets in many geographies and sectors. Responsible investment in Europe grew by 42% during the past 2 years, while in the U.S., assets grew by 33%. In Islamic finance, which has a global presence with a significant presence in Europe, the Middle East and Asia, growth in the last 2 years has been 21%. Identifying actionable areas for collaboration will support continued growth towards a more sustainable financial system.

#Microfinance islamique: une solution pour élargir l’inclusion financière?

Lors du 37e Midi de la microfinance Mohammed Kroessin, chef de l’Unité mondiale de microfinance islamique à l’ONG Islamic Relief Worldwide, et Fadoua Boudiba, chargée d’investissement senior de la région MENA et Afrique à la banque Triodos, ont expliqué les enjeux du développement de ce secteur dans le monde. Malgré le développement croissant, avec des nouveaux marchés qui s’ouvrent également à ce besoin, comme le Tadjikistan et les pays du Moyen-Orient, le secteur rencontre de nombreux défis, de par le manque de régulation. Paradoxalement, les pays comme l’Arabie Saoudite ne reconnaissent pas encore les produits de la finance islamique.

Islamic #microfinance fund may be created in #Azerbaijan

The Islamic fund on microfinance may be soon created in Azerbaijan. Recently, a mission of the Islamic Corporation for the Development of the Private Sector (ICD), which included the ICD Senior Regional Manager of for CIS and Europe countries Samir Taghiyev and the Microfinance Advisor at the ICD Bassem Khanfar, visited Baku. Azerbaijan has become one of the two countries, where the ICD starts negotiations with participants of the microfinance market. The second country is Kazakhstan. Earlier, during the 8th Micro-finance Conference in Baku, Executive Director of Azerbaijan Micro-finance Association (AMFA) Zhale Hajiyeva said that businessmen of post-Soviet countries also showed interest in the market. Currently, loan portfolio of Azerbaijan’s microfinance organizations amounted to $485.16 million, according to AMFA.

SBP aims to achieve 50pc financial inclusion by 2020: deputy governor

The State Bank of #Pakistan (SBP) is pursuing a three-pronged strategy to achieve the goal of 50% financial inclusion by the year 2020. According to Saeed Ahmed, deputy governor of the central bank, twenty million households need microfinance in Pakistan. The forum, organised by Shamrock Conferences International was held to strive for the expansion of financial services. Dr Mohammad Amjad Saqib, chairman of Akhuwat Foundation, delivered the keynote address and stressed the importance of microfinance. Speakers agreed that the microfinance specialists must create a sustainable model by offering competitive microfinance products, reducing costs and expanding their outreach.

IDB’s ICD to study potential of #Azerbaijan's #microfinance market

During the visit, the ICD delegation will meet with representatives of Azerbaijan's financial sector to study the potential of micro-finance market and works done in this sphere. The conference will also be attended by representatives of Germany's KfW Group.

MICROFINANCE EVENT: Islamic #Microfinance #Summit, September 26-27, 2016, Dubai, United Arab Emirates

The Islamic Microfinance Summit takes place on September 26-27, 2016 in Dubai and is organized by Uniglobal, a Prague-based provider of workshops and conferences. The theme of this conference is "raising awareness and ensuring compliant and targeted product development to aid poverty alleviation." Its goal is to promote Islamic microfinance, particularly to the international donor community.

Better Understanding the Demand for Islamic #Microfinance

To close the severe gaps in financial inclusion in the Middle East and North Africa, more and more governments are starting to develop national financial inclusion strategies driven by evidence-based studies. So far, demand studies on Islamic finance have produced mixed results. To examine the distinction between preference and actual choice, CGAP, Yale University and Tamweelcom took a novel approach to the study of demand for Islamic and conventional loans in Jordan. According to the experiment, more people opt for the Islamic microloan than the conventional one when offered both (17% versus 2%). Sharia certification appears to have no significant impact on loan take-up at all. The study found that in Jordan people who are more religious are willing to pay a higher price for an Islamic microloan.

The Role of Financial Services in Reducing Hunger

For the majority of the 1.4 billion of the world’s poor agriculture is the main source of income and employment. Many farmers live in areas lacking access to basic financial services, leaving them vulnerable to shocks and prone to low-risk, low-return investments. Improving access to financial services can help farmers make profitable investments that increase their yields. At a macro level, higher yields increase the total global supply of food. At a micro level, higher yields increase household income and food security for the world’s 1.5 billion living in smallholder households.

6th Global Islamic #Microfinance #Forum

The 6th Global Islamic Microfinance Forum (GIMF) will convene in Nairobi, Kenya on November 8-9, 2016. Muhammad Zubair Mughal, the CEO of Al-Huda, said the GIMF will explore how new and effective strategies can alleviate poverty. He said the most alarming situation is that major chunk of poverty exist in Muslim countries, as it is considered the number one agenda of "financial inclusion." In these countries a proper platform is needed, valuing their cultural and social values, which is possible only through Islamic Microfinance. Amjad Saqib, Executive Director of Akhuwat declared that Akhuwat has so far distributed almost Rs. 25 billion among 1,323,586 families. He presented the "Qarz-e-Hassan" model as a true model of Islamic Welfare oriented Microfinance system. The Forum will be followed by two days post event workshop, How to Develop, Operate and Sustain Islamic Microfinance Institutions planned for November 10-11, 2016.

Central Bank of Nigeria (CBN) Releases Categorization System for “Non-interest Islamic Microfinance Banks”

The Central Bank of Nigeria (CBN) recently released a new categorization system for "Non-Interest Islamic Microfinance Banks" (NIMFBs). CBN organized NIMFBs into three categories: "Unit", "state" and "national". Unit NIMFBs must have a minimum capital of NGN 20 million (USD 71,000) and may open one branch location within the same municipality as the organization’s headquarters. State NIMFBs may operate in one state if they maintain minimum capital of NGN 200 million (USD 350,000). Institutions in this category may open multiple branches in the state within which their headquarters are registered. A national NIMFB is permitted to operate in any state or territory of Nigeria so long as it holds NGN 2 billion (USD 7 million) in capital.

Islamic #Crowdfunding as a Solution for SMEs

The current use of Islamic Finance has mainly benefited large corporations. Despite the Shariah focus on community support and involvement, the sector’s contribution to SMEs and social projects is minimal. Combining Islamic Finance with crowdfunding has the potential to address financing issues faced by SMEs. One factor which may boost the growth of the sector is the increased introduction of Islamic finance structures. Most crowdfunding platforms currently use Murabaha and Mudharabah contracts. Other structures which may be considered includes Salam, Ijara and Diminishing Musharaka.

Interest-free loans steer people away from dangers of credit cards, #microfinance organisations say

In #Australia microfinance organisations are expecting a growing demand for financial help. Every year about 20.000 Australians obtain such loans and the figures are expected to double by the end of 2017. For example Good Shepherd Microfinance has partnered with state and federal governments and the National Australia Bank to provide the loans. Manager Adam Mooney said the increasing availability of no-interest loans of up to $1.200 would steer people away from credit cards and high-interest, short-term loans. He also said Good Shepherd was looking for more support to expand its programs.

Source: 

http://www.abc.net.au/news/2016-06-07/interest-free-loans-'giving-low-income-people-hope'/7485160

IRTI #Conference Discusses Poverty Alleviation through Islamic #Microfinance

The Islamic Research and Training Institute (IRTI) is organizing a seminar to discuss the role of Islamic microfinance in poverty alleviation on 14-15 May 2016 in Bogor, Indonesia. IRTI is organizing the event in conjunction with the 41st Annual Meeting of the IDB Group. The event features the launching of the Islamic Microfinance for Poverty Alleviation and Capacity Transfer (IMPACT) Program, which aims to disseminate the best practices in Islamic microfinance.

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