Upload
alhudacibe
View
1.107
Download
2
Tags:
Embed Size (px)
DESCRIPTION
AlHuda CIBE,www.alhudacibe.com
Citation preview
2
Zubair MughalChief Executive Officer
AlHuda : Centre of Islamic Banking & Economics
Editor in Chief.Islamic Banking and Finance News , True Banking.
An Introduction to
Islamic Micro Finance
Presented to
Farz Foundation
Outline of Presentation
Introduction to Islamic Microfinance Riba ( Interest ) Difference between Islamic & Conventional Micro
Finance Product of Islamic Micro Finance. Progress of Islamic Banking in Pakistan & Worldwide
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
Islam and Shariah
Sources of Fiq’h in Islam (Islamic Finance)
Quran
Sunnah
Ijtehad / Qiyas
Ijama’e Ummah
Basic Difference between Islamic and Conventional Microfinance
ConventionalMFI Client
Money
Money + Money(interest)
IMFI ClientGoods & Services
money
Islamic Microfinance
Riba in Quran
“... God has permitted trade and forbidden interest...”
(Sura Al-Baqara 2:275)
Fulfillment of Financial Needs
Own Capital Others’ Capital
Equity Financing Debt Financing
• Murabahah• Ijarah•Salam & Istisna etc
• Musharakah• Modarabahah• Other Products
Human Financial Needs
PRODUCT TREE
Islamic Microfinance Modes
Trade Based Modes
Partnership Based Modes
Rental Based Modes
Musharaka(Joint Venture Profit Sharing )
Mudaraba( Trustee Profit Sharing)
Murabaha(Cost Plus Profit Sale)
Musawama(Bargain sale )
Salam(Commodity Sale)
Istisna(Sale on Order)
Ijarah ( Leasing )
Diminishing Musharaka( Transfer of Ownership)
Industry Progress in Pakistan
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
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
Very often it results in the banks own interest becoming prominent. it makes no effort to ensure growth with equity
It gives due importance to the public interest, its ultimate aim is to ensure growth with equity
Do Deal in Zakat Deal in Zakat ( Non Muslim Countries )
Conventional Micro Finance
Islamic Micro Finance
ONUS SHIFTS!!
Customer to Halal Restaurant Owner
Halal Restaurant Owner to Halal Meat Supplier
Halal Meat Supplier to Halal Abattoir / Butcher
Customer to Islamic Banker
Islamic Banker to Shariah Scholars
Thank You.