Journal ArticleDOI
The link between Islamic banking and microfinancing
TLDR
In this article, the authors show the link between Islamic banking and micro-financing and show that the two practices are also practically linked and that it is possible to combine them and to convince Islamic religious leaders.Abstract:
Purpose – The purpose of this paper is to show the link between Islamic banking and microfinancing.Design/methodology/approach – The approach used in this paper is first to describe the basic principles of Islamic banking and microfinancing and then to show the link between the two financial practices. In general, it is believed that the two practices are not compatible since microfinance allows interest payments on loans and Islamic banking prohibits interest payment based on Islamic law, sharia. Both practices, however, promote equality and fairness for all members of the society and encourage entrepreneurship by giving collateral‐free loans to the poor. The two practices, therefore, are ideologically linked. This paper shows that they are also practically linked.Findings – Islamic religious leaders usually dismiss microfinancing because microfinancing requires high‐interest rate which is against Islamic law. This paper finds that it is possible to combine the two practices and to convince Islamic relig...read more
Citations
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Journal ArticleDOI
Equity financing and debt-based financing: Evidence from Islamic microfinance institutions in Indonesia
TL;DR: In this paper, the impact of Islamic micro-finance on rural households' welfare in Indonesia was investigated using a survey questionnaire and a double difference-in-difference approach.
Journal ArticleDOI
A theory and contractual framework of Islamic micro-financial institutions’ operations
Edib Smolo,Abdul Ghafar Ismail +1 more
TL;DR: In this article, the authors explored the contractual framework in modelling the Islamic micro-finance institutions and discussed the role of IMFIs via various modes of financing in providing capital to micro-enterprises.
Journal ArticleDOI
Taking stock of the waqf-based Islamic microfinance model
TL;DR: In this article, the authors explore two main aspects of waqf: the characteristics of the property and management of the management of a Waqf, and discuss the governance of the ownership of the WaqF as a source of funds for Islamic micro finance institutions.
Journal Article
How do we measure corporate social responsibility of Islamic banks through their business processes and oriented outcomes
TL;DR: In this article, the authors have suggested Musharakah and equity as new items to fill the important gap in measuring field of Islamic banks' CSR, which is coming from the deeper understanding of Shari'ah principles (Maqasid Shariah) in Islamic business world.
Journal ArticleDOI
The Islamic Banking, Asset Quality: “Does Financing Segmentation Matters” (Indonesia Evidence)
TL;DR: In this article, the effect of segmentation on the quality of Islamic banks proxied with NPF was investigated using a quantitative method with multiple regression test and statistical tool Stata version 13.
References
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Finance, entrepreneurship and growth
TL;DR: The authors construct an endogenous growth model in which financial systems evaluate prospective entrepreneurs, mobilize savings to finance the most promising productivity-enhancing activities, diversify the risks associated with these innovative activities and reveal the expected profits from engaging in innovation rather than the production of existing goods using existing methods.
Book
The Economics of Microfinance
TL;DR: A comprehensive survey of micro finance can be found in this paper, where the authors provide an overview of micro-finance by addressing a range of issues, including lessons from informal markets, savings and insurance, the role of women, the place of subsidies, impact measurement, and management incentives.
Posted Content
Microfinance and poverty - evidence using panel data from Bangladesh
TL;DR: In this paper, the authors used household level panel data from Bangladesh and found that micro-finance benefits the poorest and has sustained impact in reducing poverty among program participants, but the effect is more pronounced in reducing extreme rather than moderate poverty.
Journal ArticleDOI
Microfinance and poverty : evidence using panel data from Bangladesh
TL;DR: In this article, the authors used household level panel data from Bangladesh and found that micro-finance benefits the poorest and has sustained impact in reducing poverty among program participants, but the effect is more pronounced in reducing extreme rather than moderate poverty.
Book
Islamic Finance: Law, Economics, and Practice
TL;DR: In this paper, the authors present a review of the major prohibitions of shari'a arbitrage in Islamic finance, including Riba and Gharar, and Derivative-like sales: Salam, Istisma, and Urbun.