scholarly journals Literature Survey on Islamic Microfinance

2020 ◽  
Vol 8 (1) ◽  
pp. 023
Author(s):  
Nik Nur Izzati Nik Muhammad Azmi ◽  
Mohamed Asmy Bin Mohd Thas Thaker
Keyword(s):  
Literature Survey ◽  
Poor People ◽  
Microfinance Institutions ◽  
Muslim Countries ◽  
The Poor ◽  
Social Standard ◽  
The Social ◽  
Management Problems ◽  
Islamic Microfinance

Islamic microfinance can be seen as an emerging industry in some Muslim countries like Indonesia, Malaysia, Pakistan, Bangladesh, and MENA regions. It acts as a movement to eradicate poverty in the society and to help improve the social standard of the poor people. The concept of Islamic microfinance is similar to those implemented in conventional microfinance except for it adheres to several points and concepts which in line with the Shariah rulings. As a growing industry, Islamic microfinance does facing several challenges such as limited outreach in the market, lack of expertise in the industry, governance and management problems, and many more. Hence, this paper will discuss further the issues and challenges faced by Islamic microfinance institutions in selected Muslim countries. Plus, some suggestions are given at the end of this paper to solve these issues.

scholarly journals Alleviating Poverty through Islamic Microfinance: Outreach and Efficiency (Study on BMT and Islamic Cooperatives in Indonesia)

2020 ◽  
Vol 16 ◽  
pp. 1362-1376
Author(s):  
Purwanto Purwanto ◽  
Ina Primiana ◽  
Dian Masyita ◽  
Erie Febrian
Keyword(s):  
Coefficient Of Determination ◽  
Data Envelopment ◽  
Strong Positive Correlation ◽  
Microfinance Institutions ◽  
Social Efficiency ◽  
Qualitative Approaches ◽  
The Social ◽  
Dependent Variables ◽  
Islamic Microfinance ◽  
The Impact

The involvement of Islamic Microfinance Institutions (IMFI) in building the national economy is paramount to help the poor. However, provision of access and services to lower-level households can potentially conflict with the sustainability of the institutions. This study analyses the social outreach factors that determine financial and social efficiencies. To reach the set goal and solve this issue, we used mixed methodology combining quantitative (statistical instruments, such as Data Envelopment Analysis (DEA) and multivariate analysis) and qualitative approaches (interviews to clarify or deepen the existing information). The assessment of the dependent variables is influenced by proxies of depth, breadth, length, scope, and cost. The results showed that the average loan instalments and the number of offices and branches significantly influence financial and social efficiency. The age of the institution only has an effect on financial efficiency. Simultaneously, profit orientation, the amount and type of financing and the amount and type of savings only have a high impact on social efficiency, whereas the impact of fund collection and cost per borrower is insignificant. There is a strong positive correlation between the two dependent variables. The influence of independent variables on financial and social efficiency is significant with the coefficient of determination 23.1274 % and 53.2941 %, respectively.

scholarly journals Unique aspects of the Islamic microfinance financing process

Humanomics ◽  
2016 ◽  
Vol 32 (3) ◽  
pp. 230-247 ◽  
Author(s):  
Permata Wulandari ◽  
Salina Kassim ◽  
Liyu Adhi Kasari Sulung ◽  
Niken Iwani Surya Putri
Keyword(s):  
Content Analysis ◽  
Cultural Influences ◽  
Poor People ◽  
Policy Makers ◽  
Content Type ◽  
The Poor ◽  
Proposed Model ◽  
Depth Interview ◽  
Islamic Principle ◽  
Islamic Microfinance

Purpose This paper aims to highlight on the unique aspects of Islamic microfinance based on the experience of Baitul Maal Wa Tamwil (BMT) in Indonesia. Design/methodology/approach It adopts the content analysis approach and focuses on three phases of financing, namely, pre-financing, financing and post-financing using coding and model buildings. Data are collected through in-depth interview with a sample of representatives of BMTs that offer product based on Islamic principle for the poor located in Jakarta, Bogor, Depok, Tanggerang and Bekasi (JABODETABEK), Sulawesi Selatan, Yogyakarta and Nusa Tenggara Barat (sample chosen based on the most concentrated areas of Islamic microfinance that offered product based on Islamic principles). Ultimately, a model based on the unique features of Islamic microfinance will be developed based on the findings of the content analysis. Findings The proposed model incorporates the peculiarities of the poor people in pre-financing, financing and post-financing activities of micro-financing products to serve as a reference for policy makers. The paper also found that each region has unique product preferences depending on the poor’s characteristics. Research limitations/implications This study is only conducted in four areas with BMT representation, namely, Jakarta, Bogor, Depok, Tangerang, Bekasi (often abbreviated as JABODETABEK), Sulawesi Selatan, Yogyakarta and Nusa Tenggara Barat) in Indonesia. Despite the limited scope, the findings have wide applications to the Islamic microfinancing in general. Originality/value The paper adds value to the literature on Islamic microfinance by enabling researchers and practitioners to understand the model of three step financing (pre-financing, financing and post-financing) in Islamic microfinance in Indonesia. Although not a new issue, the paper provides the practice of pre-financing, financing and post-financing processes which may differ from the practices of Islamic microfinance in other settings because of different cultural influences unique to every region.

Adopting Islamic microfinance as a mechanism of financing small and medium enterprises in Uganda

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ssemambo Hussein Kakembo ◽  
Muhamad Abduh ◽  
Pg Md Hasnol Alwee Pg Hj Md Salleh
Keyword(s):  
Financial Services ◽  
Small And Medium Enterprises ◽  
Skills Training ◽  
Microfinance Institutions ◽  
Alternative Scheme ◽  
Content Type ◽  
The Poor ◽  
Islamic Microfinance ◽  
Financial Challenges ◽  
Medium Enterprises

PurposeDespite the fact that small and medium enterprises (SMEs) play a crucial role in strengthening the financial sector within developing and emerging economies through providing employment opportunities to the rural and urban population, capacity building in the form of skills training and economic empowerment, they still face a plethora of challenges that continue to threaten their existence, performance and growth. Access to operational and administrative funds needed to execute their activities effectively is a significant challenge and detrimental to the growth of SMEs in Uganda. Conversely, Islamic microfinance has been noted as a panacea to the challenges of financial inaccessibility among SMEs, especially in developing countries. The purpose of this paper is therefore to investigate how the adoption of Islamic microfinance can play a fundamental role in enhancing the sustainability of microfinance institutions (MFIs) while meeting the financing challenges of SMEs in Uganda.Design/methodology/approachIn this study, a review of existing literature was carried out to critically examine relevant information (literature sources) and empirical studies on SMEs, their performance and challenges. The study being conceptual tries to understand how Islamic microfinance could be adopted as an alternative scheme of financing to bridge the gap and mitigate the financial challenges facing SMEs.FindingsThe study finds that the existing MFIs have failed to achieve their objectives of providing financial services to the poor and SMEs while remaining sustainable. This has left the majority of SMEs within Uganda's informal sector financially handicapped, thus leading to their failure in meeting their expectations and eventually collapsing even before celebrating their third or fourth birthdays. However, the enactment into law of the Financial Institutions Amendment Act 2016 that paved the way for the introduction of Islamic finance in Uganda, and the Tier 4 Microfinance Institutions and Money Lenders' Act, 2016 that incorporated the aspects of Islamic microfinance within the existing microfinance framework as seen and is perceived as a key factor in addressing the financial challenges faced by MFIs and the SMEs if fully adopted.Research limitations/implicationsThis study is conceptual with no empirical investigation and discussion of key theories. On the contrary, it will be imperative and useful when carrying out more extensive hypothetical studies by future researchers, specifically in the area of Islamic microfinance that is relatively new in Uganda.Practical implicationsPractically, this paper will serve as a guide to policymakers and practitioners in the field of microfinance by adding a flair that could enable in bridging the challenges associated with inadequate financing of SMEs in Uganda.Social implicationsSocially, the social aspects of charity (Zakah and Sadaqah) will help to improve the livelihood of the poorest of the poor who cannot engage in active business through meeting their basic needs of life without begging thereby preventing them from being social outcasts.Originality/valueThe study establishes Islamic microfinance (IMF) as a promising and unexplored viable option potentially needed in intensifying the financing needs of SMEs in Uganda. The paper provides an entirely new dimension in nature and way microfinance products should be structured with a view of ensuring that there is sustainable provision of financial services to SMEs. The paper adds real value to the existing conventional microfinance products and services in Uganda, given the ethical and moral attributes of Islamic microfinancing practices that are assumed to efficiently and effectively motivate SME owners and other small entrepreneurs to thrive.

Profitability vs Poverty alleviation: has banking logic influences Islamic microfinance institutions?

2019 ◽  
Vol 4 (2) ◽  
pp. 260-279
Author(s):  
Luqyan Tamanni ◽  
Mohd Hairul Azrin Haji Besar
Keyword(s):  
Mission Statements ◽  
Annual Reports ◽  
Microfinance Institutions ◽  
Local Data ◽  
Content Type ◽  
Related Information ◽  
The Poor ◽  
Islamic Microfinance ◽  
The Impact ◽  
Primary Mission

Purpose The purpose of this paper is to shed some lights on the process of mission drifting or abandoning poverty objective by Islamic microfinance institutions (IMFs). The paper investigates whether the extensive use of banking logic changes IMFs, from focusing on both development and financial objectives to only considering sustainability as their primary mission. Design/methodology/approach This paper adopts mixed methods by analyzing 7,200 microfinance data from Microfinance Exchange Market and reviewing annual reports and websites of 25 IMFs to examine their vision and mission statements and other related information. Findings The finding shows Islamic microfinance has not changed, despite increasing adoption of financial or banking performance measures. However, size and age of the institutions may affect the outcome in the future. The authors find that smaller microfinance institutions maintain genuine objective to serve the poor, as the grow larger they would be more inclined toward sustainability objectives. Research limitations/implications The research is limited on the sample size as data on Islamic microfinance globally is limited. However, the paper looked at the global data rather than local data to compensate for this limitation. Future study would be further taking the study through qualitative methods to support the study. Originality/value This paper aims to shed some lights on the process of mission drifting or abandoning poverty objective by IMFIs. The paper investigates how has the extensive use of financing logic has changed IMFIs from focusing on both development and financial objectives to only considering sustainability as their primary mission. Arun and Hulme (2009) argued that the interaction of multiple logic within microfinance institutions, i.e. financial vs social, could pose some serious management dilemmas within microfinance institutions. Further, commercialization puts pressure on the field staffs to achieve financial targets and often neglect their poverty outreach mission to the poor. The well-known crisis in Andhra Pradesh, India where clients of microfinance institutions committed suicide after being shamed by field officers who tried to collect payments of loans (Mader, 2013; Taylor, 2011), provides a powerful case of the impact of financialization to microfinance clients.

scholarly journals Microfinance Institutions in Yemen “Hurdles and Remedies”

2017 ◽  
Vol 4 (1) ◽  
pp. 10 ◽  
Author(s):  
Ali Saleh Alshebami ◽  
V. Rengarajan
Keyword(s):  
Rural Areas ◽  
Primary Data ◽  
Poor People ◽  
Remedial Measures ◽  
Microfinance Institutions ◽  
Secondary Sources ◽  
The Poor ◽  
Physical Infrastructure ◽  
Banking Institutions

The objective of this paper is to investigate the different types of hurdles limiting the growth and development of microfinance institutions operating in Yemen, and to suggest relevant recommendations that be used as a backup in the process of taking remedial measures. The study is both descriptive and analytical in nature. The data collected is based on both primary and secondary sources. The primary data was collected during the field study of ongoing PhD research study on the role of microfinance in mitigating poverty and unemployment in Yemen conducted in October 2015 by Mr. Ali Alshebami. Only a sample of nine MFIs was selected from The MFIs operating in the market, as the remaining MFIs could not be easily reached due to the prevailing persistent internal war situation. A few of these hurdles include but not limited the existence of insufficient funds necessary for financial business and the availability of poor physical infrastructure in the rural areas. In addition, the shortage of qualified human resources, the poor diversification of products and services, the political instability of the country, the wrong perception about lending to the poor and many others. Among other remedial measures, investible funds and designing of integrated financial products with the inclusion of micro insurance are essential, these two vital ones along with including the financial linkages between MFIs and formal banking institutions should be adopted for more enhancement. The study confirms that there are several difficulties and challenges, which hinder the MFIs from progressing and achieving their mission in terms of outreach to the poor people.

scholarly journals Perlindungan Hukum dari Negara Terhadap Masyarakat Fakir Miskin Menurut Konsep Welfare State (Studi Pengentasan Kemiskinan Masyarakat di Kota Palembang)

2020 ◽  
Vol 5 (2) ◽  
pp. 269
Author(s):  
Muhammad Zainul Arifin ◽  
Muhammad Syahri Ramadhan ◽  
Happy Warsito ◽  
Ardian Nugraha
Keyword(s):  
Welfare State ◽  
Social Service ◽  
Poverty Reduction ◽  
Poor People ◽  
The South ◽  
Indonesian Government ◽  
The Poor ◽  
The Social ◽  
The Right ◽  
The City

The process of implementing the concept of a welfare state by the Indonesian government towards its people is a problem of poverty. The number of needy people in Indonesia is enormous. This is what underlies poverty to be considered a serious problem so that the Indonesian government provides specific regulations related to poverty handling through the issuance of Law no. 13 of 2001 concerning Management of the Poor. In the South Sumatra region, particularly the city of Palembang itself, the problem of poverty is a big task that must be faced by regional officials and other related agencies. The Social Service of South Sumatra Province stated that Palembang City was the city with the highest number of poor people compared to other districts / cities in South Sumatra. This of course requires the right policies in handling it, one of which is through the issuance of the Regional Regulation of South Sumatra Province Number 7 of 2017 concerning poverty reduction in South Sumatra

scholarly journals LA OPCIÓN TEOLÓGICO-PASTORAL DEL PAPA FRANCISCO

2016 ◽  
Vol 48 (1) ◽  
pp. 81
Author(s):  
Rafael Luciani
Keyword(s):  
Latin American ◽  
Poor People ◽  
Christian Community ◽  
Pope Francis ◽  
The Poor ◽  
The People ◽  
The Social ◽  
Cultura Popular ◽  
Preferential Option ◽  
The Relationship

Resumen: La Evangelii Gaudium y los discursos ofrecidos durante los viajes apostólicos a Latinoamérica han dejado clara la opción teológico-pastoral del Papa Francisco, cuyo eje se encuentra en torno a la opción preferencial por «una Iglesia pobre que asuma al pueblo-pobre» y, desde ahí, se deje evangelizar reconociendo el lugar teológico que tiene la cultura popular como mediación socioanalítica y de encuentro con el Dios de Jesús. Para comprender esto hay que adentrarse en el debate sociohistórico de la teología latinoamericana de la liberación y en el modo como esta fue recibida en Argentina por medio de la teología del pueblo. Así también, es necesario seguir los debates sobre la relación que ha de existir entre el anuncio del Evangelio, la vida de la Iglesia y la realidad de los pobres, según han sido expuestos desde Medellín hasta Aparecida. En el presente artículo iremos desarrollando estos ejes fundamentales en los que se inspira la opción teológico-pastoral del Papa Francisco y las consecuencias para la credibilidad de la comunidad cristiana en la era globalizada.Abstract: The Evangelii Gaudium and the speeches offered during the Papal Apostolic Journeys to Latin America made more clear the theological and pastoral option of Pope Francis, whose axis is around a preferential option for «a poor Church that assumes the poor-people». A Church that recognizes the theological locus of the popular culture, as a socio-analytic mediation to encounter the God of Jesus. To understand this, it is mandatory to examine the social and historical debates occasioned by Latin American Liberation Theology and the way it was received in Argentina through the so called «Theology of the People». It will also be necessary to follow the discussions on the relationship between the proclamation of the Gospel, the life of the Church and the reality of the poor, as they have been stated from Medellin and San Miguel to Aparecida. In this article we will study those key areas and topics in which Pope Francis has developed his theological-pastoral option and its consequences for the credibility of the Christian community in a globalized era.

scholarly journals The Islamic Microfinance System And Its Ultimate Impact On The Poor In Bauchi Metropolis In The Context Of Socio-Economic Challenges

2021 ◽  
Vol 5 (1) ◽  
pp. 95-101
Author(s):  
Hashim Sabo Bello ◽  
Shamsuddeen Abubakar ◽  
Sunusi Abdulkadir Fateh
Keyword(s):  
Social Services ◽  
Low Income ◽  
Financial Services ◽  
Poor People ◽  
Microfinance Institutions ◽  
Islamic Microfinance ◽  
And Gender ◽  
High Level ◽  
Financial Transactions ◽  
The Impact

One of the conditions for providing social services to the population, reducing the differentiation of their incomes, as well as reducing poverty is to provide equal access to financial services for all segments of the population. Despite high unemployment and a significant number of poor people, only about a few thousand Nigerians today use Islamic microfinance services. The main purpose of this study is to study the impact of the Islamic microfinance system on the financial situation of the population. The study is based on the principles of the theory of positivism. Methods of deduction, statistical analysis, and survey served as methodological tools. The authors of the article developed a structured questionnaire, the analysis of which allowed to analyze the attitude of citizens to Islamic microfinance services. A representative sample of citizens of the metropolis Bauchi with different levels of wealth, age and gender was selected for the study. According to the results of the survey, the development of special microcredit programs for low-income people allowed to finance the start of their own business, thus providing their own and household members’ employment. The main factors hindering the development of microfinance in Muslim countries are the high level of non-repayment of borrowed funds, imperfect infrastructure, the presence of Sharia bans on certain types of financial transactions. The results of the study showed the need for an active information campaign aimed at explaining the benefits of using macro-financial services and their accessibility for low-income citizens, as well as expanding the network of microfinance institutions throughout the metropolis. These measures will create conditions for the development of small business in the country, and as a consequence reduce poverty and reduce the number of unemployed in the country.

scholarly journals Accountability in Public Administration: A Case Study of Public Administration to the Poor People in Social Department of Makassar, Indonesia

2020 ◽  
Vol 11 (1) ◽  
pp. 108
Author(s):  
Sahruddin Malik ◽  
Fakhri Kahar ◽  
Darman Manda
Keyword(s):  
Public Administration ◽  
Qualitative Case Study ◽  
Poor People ◽  
Case Study Approach ◽  
Study Approach ◽  
The Poor ◽  
The Social ◽  
The Subject ◽  
The Government

Accountability in providing public administration to the poor people in the Social Department of Makassar. This study was qualitative case study approach, while the instruments were the researchers themselves. This study showed that the accountability in providing public administration to the poor people had not run optimally. There were various approaches and alleviation programs for poverty that had not been able to change significantly. There was no continuous program during the official turnover. If the official was changed, then the policy would be changed, thus the programs were ineffective to minimize the poverty in Makassar. The policies and the supports were necessary from all the elements of construction and the involvement of entrepreneurs like stakeholders and community leaders. The government is necessary to take a role in uniting and bridging these issues. In addition, the strategic planning was necessary to involve society, not only as objects of development but also to be involved as the subject of development to alleviate the poverty in Makassar.

scholarly journals Alleviating Poverty Through Islamic Microfinance: Factors and Measures of Financial Performance, and Roles of Islamic Values and Financial Policies

2019 ◽  
pp. 1266-1273
Author(s):  
Adhitya Ginanjar ◽  
Salina Kassim
Keyword(s):  
Financial Services ◽  
Poverty Alleviation ◽  
Financial Education ◽  
Financial Inclusion ◽  
Microfinance Institutions ◽  
Financial Policies ◽  
The Poor ◽  
Depth Interview ◽  
Rich Information ◽  
Islamic Microfinance

Indonesia has a strong presence of microfinance sector with the number of Islamic Microfinance Institutions (IMFIs) estimated to be around 5,000 currently. Microfinance is an effective tool in alleviating poverty in Indonesia due to the limited access to financial services by the poor who accounted for approximately 96 million Indonesians (or 37% of the total population), living on less than USD 1.90 a day. In the absence of collateral and steady income, the poor are considered too risky to be given credit facilities by the formal financial services providers and living in remote areas has also limited their access to formal financial services. This study aims to examine the poverty alleviation efforts from the perspective of the IMFIs in view of their direct involvement in the process and having rich information about financial issues facing the borrowers. The managers also understand about financial inclusion agenda as well as financial guidelines and regulations issued by the relevant authorities. A total of 34 managers of Baitulmaal Wa Tamwil (BMTs), which registered under the Sharia Cooperative Centre (INKOPSYAH) are taken as respondents from the Jakarta, Bogor, Depok, Tangerang and Bekasi (JABODETABEK) areas. The first instrument was a survey questionnaire, and the second one was an in-depth interview to outline data related to the model design. The findings of this research are expected to contribute to better decision-making for the BMTs to further enhance its role in alleviating poverty. The findings also elaborate several dimensions to improving financial inclusion among the poor including providing financial services, implementing Islamic principles, significant policies, community-based framework concept and training financial education. This research highlights the need for a variety of strategies to warrant success of poverty alleviation efforts by BMT.

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