Islamic microfinance as an alternative to conventional financing practices : The need to address the poverty in Pakistan

Abdul Razak, Dzuljastri and Abbas, Kausar (2012) Islamic microfinance as an alternative to conventional financing practices : The need to address the poverty in Pakistan. In: International Conference On Islamic Economics and Business (ICIEB 2012), 29 June - 1 July 2012, A' Famosa Resort Hotel, Malacca. (Unpublished)

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Abstract

Microfinance has been identified as an important tool that can reduce poverty in developing countries. However, current practices are similar to conventional financing which are traditionally based on debt and price against interest rate. These practices do not effectively alleviate poverty as the micro entrepreneurs remain indebted throughout the period of financing. Hence, this paper explores the feasibility of Islamic microfinance as an alternative means to help the poor in line with the Shariah principles where the use of riba (usury) is prohibited due to unfairness and injustice. It begins with an overview of poverty, microfinance and its characteristics. This is followed by comparing the differences between conventional financing and Islamic microfinance and various models used. Then its application is discussed in the context of Pakistan. The study is an attempt to explore the emerging area of Islamic microfinance as a means to address the financial hardship facing micro entrepreneurs in order to improve their standard of living. Key words: Debt, Islamic microfinance, riba, poverty, Pakistan.

Item Type:	Conference or Workshop Item (Full Paper)
Additional Information:	4433/25895
Uncontrolled Keywords:	Debt, Islamic microfinance, riba, poverty, Pakistan
Subjects:	H Social Sciences > HG Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF) Kulliyyah of Economics and Management Sciences > Department of Finance
Depositing User:	Dr Dzuljastri Abdul Razak
Date Deposited:	17 Dec 2012 15:36
Last Modified:	26 Nov 2013 14:14
URI:	http://irep.iium.edu.my/id/eprint/25895

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