Islamic microfinance as an alternative to conventional financing practices : The need to address the poverty in Pakistan
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 m...
| Main Authors: | , |
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| Format: | Proceeding Paper |
| Language: | English English |
| Published: |
2012
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| Online Access: | http://irep.iium.edu.my/25895/ http://irep.iium.edu.my/25895/1/%28_C_-_8%29_INCIEB_2012_-_FULL_PAPER_195_%28R%29-4.pdf http://irep.iium.edu.my/25895/4/Dr_Dzuljastri_session.pdf |
| _version_ | 1848779545718554624 |
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| author | Abdul Razak, Dzuljastri Abbas, Kausar |
| author_facet | Abdul Razak, Dzuljastri Abbas, Kausar |
| author_sort | Abdul Razak, Dzuljastri |
| building | IIUM Repository |
| collection | Online Access |
| description | 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.
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| first_indexed | 2025-11-14T15:19:29Z |
| format | Proceeding Paper |
| id | iium-25895 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English English |
| last_indexed | 2025-11-14T15:19:29Z |
| publishDate | 2012 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-258952013-11-26T06:14:51Z http://irep.iium.edu.my/25895/ Islamic microfinance as an alternative to conventional financing practices : The need to address the poverty in Pakistan Abdul Razak, Dzuljastri Abbas, Kausar HG Finance 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. 2012-06-29 Proceeding Paper PeerReviewed application/pdf en http://irep.iium.edu.my/25895/1/%28_C_-_8%29_INCIEB_2012_-_FULL_PAPER_195_%28R%29-4.pdf application/pdf en http://irep.iium.edu.my/25895/4/Dr_Dzuljastri_session.pdf 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) |
| spellingShingle | HG Finance Abdul Razak, Dzuljastri Abbas, Kausar Islamic microfinance as an alternative to conventional financing practices : The need to address the poverty in Pakistan |
| title | Islamic microfinance as an alternative to conventional financing practices : The need to address the poverty in Pakistan |
| title_full | Islamic microfinance as an alternative to conventional financing practices : The need to address the poverty in Pakistan |
| title_fullStr | Islamic microfinance as an alternative to conventional financing practices : The need to address the poverty in Pakistan |
| title_full_unstemmed | Islamic microfinance as an alternative to conventional financing practices : The need to address the poverty in Pakistan |
| title_short | Islamic microfinance as an alternative to conventional financing practices : The need to address the poverty in Pakistan |
| title_sort | islamic microfinance as an alternative to conventional financing practices : the need to address the poverty in pakistan |
| topic | HG Finance |
| url | http://irep.iium.edu.my/25895/ http://irep.iium.edu.my/25895/1/%28_C_-_8%29_INCIEB_2012_-_FULL_PAPER_195_%28R%29-4.pdf http://irep.iium.edu.my/25895/4/Dr_Dzuljastri_session.pdf |