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Purpose: Microfinance institutions impose a very high interest rate only to enhance the wealth of owner of the institution and stockholders. However, Islamic microfinance is the opposite of traditional microfinance; it is a form of interest-free financing dedicated to societal well-being. The research's primary objectives are to identify public knowledge of Shariah-based microfinance and ascertain the factors that contribute to the acceptance of Islamic microfinance in Pakistan. Design/Methodology/Approach: This study investigated the significance of shariah-based microfinance in Pakistan, which is based on the Islamic financial system, and used a quantitative descriptive technique to estimate the factors. Findings: There are several factors that give to the acceptability of Islamic banking. The most important variables are: cost-benefit analysis, business support, product and service quality, religious obligation, awareness and knowledge, trust and reputation. After an examination of all the acceptability factors, it was found that each factor has an effect on the acceptability of Islamic microfinance in Pakistan. Implications: The study has various implications for policymakers wishing to promote Islamic microfinance at the national and international level.

Purpose: In the contemporary era, women are playing a vital role in changing the global economy as entrepreneurs, workers, and consumers, yet they encounter many problems and obstacles in the development of entrepreneurship. This study aim is to investigate the impact of Islamic microfinance on women entrepreneurship performance: mediating role of social capital and moderating role of opportunity for social interaction in South Punjab, Pakistan. Design/Methodology/Approach: Data were collected from 183 women entrepreneurs, who were using Islamic microfinance, through the convenience sampling technique. Convenient sampling technique was used to collect the information. PLS-SEM was employed to statistically test the data. Findings: This study results indicate that microfinance had a negative relationship with women's entrepreneurship performance. However, when Islamic microfinance led to the formation of social capital among women that eventually caused the women entrepreneurship performance. Moreover, the extent to which microfinance provisions affected the social capital of clients was dependent upon the microfinance providers facilitated social interaction among clients. . Implications/Originality/Value: This paper will give benefit to academics in preparing a plan for future research. Moreover, findings will also assist policymakers and IMFIs to set out microfinance initiatives that will improve the betterment of clients and will maximize their enterprising results.

This study aims to investigate how Covid-19 has affected the microfinance institutions in Somalia. This study employed a qualitative descriptive approach by conducting a case study in Mogadishu and Hargeisa. The data of the study was collected through a questionnaire distributed to microfinance institutions in Somalia in 2021. The paper found that the number of MFIs that have been negatively affected by the epidemic was higher than the number affected positively or naturally. It also found that most MFIs witnessed high credit risks, and more than half of them have reduced lending to less than half due to the Covid-19.

The fields of zakat-based microfinance and community development are not often placed under the same theoretical lens that both aim to empower disadvantaged people. This study investigates the experiences of borrowers in the implementation of zakat-based microfinance and analyses the different driving factors they applied in their choice of the zakat-based microfinance of Daarut Tauhid Peduli in Bandung, Indonesia. It applies a community development framework, based on the five characteristics, to explore this Islamic microfinance approach as an effective community development program, which has a religious dimension. Primary data were obtained from semi-structured interviews with the borrowers along with participant observation at a weekly majelis meeting, and these were triangulated with information cross-checked with the management staff of the institution. The findings demonstrate three out of five characteristics of the zakat-based microfinance approach as an effective community development program. They include characteristics in constantly maintaining power relations between borrowers and the institution, increasing capability and ability of borrowers to be more independent and empowered, and long-term duration of the program and sustainability. The findings showed that spiritual factors appear to have been an additional driving force on top of economic and non-economic factors for most borrowers choosing this particular program.

Résumé L’entrepreneuriat social est considéré comme étant une initiative privée visant l’intérêt collectif, adoptant une approche entrepreneuriale pour satisfaire des objectifs économiques et sociaux, sans chercher un profit maximal, et dans une logique de respect de l’éthique et des croyances. Cela coïncide avec les principaux objectifs de l’Islam. Ainsi, l’entrepreneuriat social et la microfinance islamique, en tant que composante de l’écosystème de la finance islamique, essayent de résoudre les mêmes problématiques et partagent les mêmes motivations. L’objectif de cet article est, d’une part, de démonter la contribution de la microfinance islamique, en tant que moyen de financement alternatif et innovant, dans la résolution des problèmes et des contraintes de financement de l’entrepreneuriat social, et d’autre part, d’identifier les facteurs qui peuvent influencer l’adoption des instruments de financement de la microfinance islamique par les entrepreneurs sociaux, et cela à travers un examen de 20 article publiés entre 2012 et 2021, dont 11 articles traitant le cas du Maroc. Les principaux facteurs d’adoption des instruments de financement islamique identifiés dans le contexte marocain sont le coût, le facteur religieux, la connaissance et la compréhension des principes et des instruments de financement islamique, l’influence sociale, l’attitude envers ces instruments, la complexité perçue et le risque perçu. Mots clés: Entrepreneuriat social, Adoption, Finance islamique, Microfinance islamique, Financement. Abstract Social entrepreneurship is considered as a private initiative aiming at the collective interest, adopting an entrepreneurial approach to satisfy economic and social objectives, without seeking maximum profit, and in logic of respect for ethics and beliefs. This coincides with the main objectives of Islam. Thus, social entrepreneurship and Islamic microfinance, as parts of the Islamic finance ecosystem, attempt to solve the same problems and share the same motivations. The objective of this paper is, on the one hand, to demonstrate the contribution of Islamic microfinance, as an alternative and innovative means of financing, in solving the problems and constraints of financing social entrepreneurship, and on the other hand, to identify the factors that can influence the adoption of Islamic microfinance financing instruments by social entrepreneurs, through a review of 20 articles published between 2012 and 2021, including 11 of which dealing with the case of Morocco. The main factors in the adoption of Islamic financing instruments identified in the Moroccan context are cost, religious factor, knowledge and understanding of Islamic financing principles and instruments, social influence, attitude towards these instruments, perceived complexity and perceived risk. Keywords: Social entrepreneurship, Adoption, Islamic finance, Islamic microfinance, Financing.

Purpose: This study aims to evaluate and compare the awareness and perceptions of Islamic microfinance institutions and higher education institutions in Indonesia related to implementing Sharia Governance. Theoretical framework: Academic and professional institutions can play an important role in promoting awareness and knowledge of Islamic banking and finance. Design/methodology/approach: This study involved two criteria for a sample of respondents: standards from Islamic microfinance institutions, which include Baitul Maal wat Tamwil (BMT) also known as Islamic Microfinance Institutions and Badan Pembiayaan Rakyat Syariah (BPRS) known as Sharia Smallholder Financing Banks in DKI Jakarta province, as well as university students. Descriptive analysis using Likert scale-based questions was used in reviewing evaluations related to this study. The dyad perspective, which includes the view of microfinance institutions and higher education institutions, is needed in research to find out and compare awareness and perceptions between the two research objects related to knowledge about Sharia Governance. Findings: Based on the studies that have been carried out, it can be concluded that there is still a lack of knowledge, information, and insight from students related to the implementation of Sharia governance compared to Microfinance Institutions. Research, Practical & Social implications: We suggest for students to increase the information gap between students. Universities can also review the curriculum related to special courses that explain sharia governance. Originality/value: The research focusing on the dyadic perspectives of the implementation of shariah governance according to Islamic Microfinance Institutions and Higher Education Institutions in Indonesia., Propósito: Este estudio tiene como objetivo evaluar y comparar la conciencia y las percepciones de las instituciones islámicas de microfinanzas y las instituciones de educación superior en Indonesia en relación con la implementación de la Gobernanza de la Sharia. Metodología: Este estudio involucró dos criterios para una muestra de encuestados: estándares de instituciones microfinancieras islámicas, que incluyen Baitul Maal wat Tamwil (BMT), también conocido como instituciones microfinancieras islámicas, y Badan Pembiayaan Rakyat Syariah (BPRS), conocido como Sharia Smallholder Financing Banks en la provincia de DKI Yakarta. , así como estudiantes universitarios. Se utilizó un análisis descriptivo utilizando preguntas basadas en una escala de Likert para revisar las evaluaciones relacionadas con este estudio. La perspectiva de la díada, que incluye la visión de las instituciones de microfinanzas y las instituciones de educación superior, es necesaria en la investigación para descubrir y comparar la conciencia y las percepciones entre los dos objetos de investigación relacionados con el conocimiento sobre la Gobernanza de la Sharia. Conclusiones: Sobre la base de los estudios que se han llevado a cabo, se puede concluir que todavía hay una falta de conocimiento, información y comprensión de los estudiantes relacionados con la implementación de la gobernabilidad de la Sharia en comparación con las instituciones de microfinanzas.. Implicaciones de la Investigación: Sugerimos que los estudiantes aumenten la brecha de información entre los estudiantes. Las universidades también pueden revisar el plan de estudios relacionado con cursos especiales que explican la gobernanza de la sharia., Objetivo: Este estudo tem como objetivo avaliar e comparar a conscientização e as percepções de instituições de microfinanças islâmicas e instituições de ensino superior na Indonésia relacionadas à implementação da Governança da Sharia. Referencial teórico: Instituições acadêmicas e profissionais podem desempenhar um papel importante na promoção da conscientização e do conhecimento dos bancos e das finanças islâmicas. Desenho/metodologia/abordagem: Este estudo envolveu dois critérios para uma amostra de entrevistados: padrões de instituições de microfinanças islâmicas, que incluem Baitul Maal wat Tamwil (BMT) também conhecido como Instituições de Microfinanças Islâmicas e Badan Pembiyaan Rakyat Syariah (BPRS) conhecido como Sharia Smallholder Financing Banks na província de DKI Jacarta , bem como estudantes universitários. A análise descritiva por meio de questões baseadas em escala Likert foi utilizada na revisão das avaliações relacionadas a este estudo. A perspectiva da díade, que inclui a visão de instituições de microfinanças e instituições de ensino superior, é necessária na pesquisa para descobrir e comparar a consciência e as percepções entre os dois objetos de pesquisa relacionados ao conhecimento sobre a Governança da Sharia. Resultados: Com base nos estudos que foram realizados, pode-se concluir que ainda há falta de conhecimento, informação e percepção dos alunos relacionados à implementação da governança da Sharia em comparação com as Instituições de Microfinanças. Pesquisa, implicações práticas e sociais: Sugerimos que os alunos aumentem a lacuna de informações entre os alunos. As universidades também podem revisar o currículo relacionado a cursos especiais que explicam a governança da sharia. Originalidade/valor: A pesquisa com foco nas perspectivas diádicas da implementação da governança da sharia de acordo com as Instituições Islâmicas de Microfinanças e Instituições de Ensino Superior na Indonésia.

This study reviews the literature related to Islamic microfinance institutions (IMFI) published in reputable international journals. The manuscripts that have been collected consist of 71 papers that are classified into several study topics. The most researched topic is Poverty alleviation with as many as 25 papers (35%). Next are the papers with the topic of Waqf-based microfinance as many as 12 papers (17%). This follows with 11 papers on the topic of Marketing & Fintech (15%), and 10 papers on the topic of Sustainability & Outreach (14%). Meanwhile, the paper with the theme Maqashid Shariah ranks fifth with a total of 7 papers (10%). Finally, there are 6 papers with the theme of Risk management & Governance (8%). At the end of each topic, the essence of research is presented for future research, which will be useful for academics and practitioners., Islamic microfinance, Literature review, Future directions, Poverty.

The purpose of this paper is to clarify the differing roles of zakat and waqf in poverty alleviation, hunger, and inequality. It aims to provide a blueprint for harnessing zakat and waqf as alternatives to remedy these social ills. The paper is a qualitative research project, performed through analysis of literature regarding current confusion points pertaining to the areas of infaq, sadaqah, zakat, cash waqf, corporate waqf, and traditional waqf. An ideal social safety net is attainable by focusing on poverty, giving special attention to economic empowerment programs. Zakat should play a supporting role in abating hunger for people in the transition while counterbalancing inequalities created by market imperfections. Since zakat funds cannot be used for social infrastructure development, traditional waqf should fulfil these needs among vulnerable people. Additionally, contemporary forms of cash waqf and corporate waqf are essential in mobilizing resources for social infrastructure development. In contrast to existing literature, this paper provides an alternative blueprint for Islamic social investment and transfer, clearly delineating the roles of infaq, sadaqah, zakat, and waqf. Different Islamic social investment and transfer tools should function like prongs, each acting in a separate sphere, working to serve the same ultimate purpose. Bu çalışmanın amacı, yoksullukla mücadele, açlık ve eşitsizlik konularında Zekat ve Vakıf kurumlarının üstlendiği farklı rolleri değerlendirmektir. Bu çalışma ile Zekat ve Vakfın söz konusu sosyal yaraları sarmak maksadı ile alternatif olarak kullanıldığı bir plan sunulması amaçlanmıştır. Makale; İnfak, Sadaka, Zekat, Para Vakfı, Kurumsal Vakıf ve Geleneksel Vakıf alanlarına ilişkin mevcut literatürde bulunan çelişkili noktaları da açıklığa kavuşturan nitel bir araştırma projesidir. İdeal bir sosyal güvenlik ağına; yoksulluğa odaklanılarak ve ekonomik olanak sağlama programlarına özel önem gösterilerek ulaşılabilir. Zekat, piyasa mükemmeliyetsizliklerinin yarattığı eşitsizlikleri dengelerken geçiş sürecindeki insanların açlık sorununu hafifletmede destekleyici bir rol oynamalıdır. Zekat fonları İslami açıdan sosyal altyapı projeleri için kullanılamadığından, geleneksel vakıf, ekonomik olarak savunmasız insanlar için sosyal altyapı ihtiyaçlarının karşılanmasında kullanılmalıdır. Buna ek olarak, çağdaş Para Vakfı ve Kurumsal Vakıf formları sosyal altyapı projeleri için kaynak mobilizasyonu için ehemmiyet arz etmektedir. Mevcut literatürden farklı olarak, bu makale İslami sosyal yatırım ve sosyal transfer için alternatif bir taslak sunmakta olup infak, sadaka, zekat ve vakf’ın bu bağlamdaki farklı rollerini açıkça ortaya koymaktadır. Farklı İslami sosyal yatırım ve sosyal transfer araçları, her biri ayrı bir alanda hareket eden ve aynı nihai amaca hizmet eden çatal dişleri gibi işlev görmelidir.

This paper reviews the evidence of the impact of Islamic microfinance on poverty alleviation and identifies the determinants that can influence microfinance borrowers to realize the SDGs 2030 through a literature review. This study also promotes Islamic microfinance and suggests it as one of the best poverty alleviation tools, especially among Muslim communities by reviewing some of the measures suggested by other researchers through systematic literature reviews. This paper is a literature survey of more than 40 articles related to microfinance that attempt to review and analyze the areas researched by researchers in microfinance. This survey consists not only of empirical analysis and comparative analysis but recommendations and suggestions with some theoretical work. So to achieve the SDGs 2030 goal, it would be very good if Islamic microfinance institutions were used as the main alternative tool to alleviate poverty. Because the program and implementation of Islamic microfinance are always based on maslahah for the community.

Muslims in Indonesia is the largest Muslim who are the target market in the Islamic finance industry. In the context of Islamic financial product marketing, Muslim consumers being potential consumers. Muslim consumers have a unique character because they believe religious rules. This research aims to examine the effect of Shariah Marketing Characteristics on customer satisfaction and trust. This research used a quantitative approach with 375 respondents as sample BMT in Malang. The data were analyzed using Generalized Structured Component Analysis (GSCA). The findings of this study is that the Theistic, Ethic, Realistic and Humanistic (Shariah Marketing Characteristics) significantly affects the satisfaction and trust. There is a hypothesis that is not significant, which between Humanistic on customer trust.

The purpose of this study to analyze the role of BMT on MSMEs quality of life by taking a case study of BMT Bina Umat Sejahtera in Yogyakarta city. A survey on 53 respondents was conducted on September-November 2015. Non-parametric tests were applied in this study to analyze correlation between variables and CIBEST, MSMPI and IPI MODEL were employed as poverty measurement tools. This study found that financing through the entrepreneurs was effective to increase their income. Age, duration of installment, financing amount, household income and expenditure before financing found as significant factors affecting to household income after financing. Overall, BMT’s Performance was proven to be able change the quality of life of respondents in three models of poverty measurement positively. The results of this study are expected to BMT strategies so that financing customers can improve their standard of living as well as increase their level of spirituality

Conventional microfinance institutions (MFIs) can promote financial inclusion, but they also prompt ethical concerns regarding the social consequences of commercialization and high interest rates. Islamic MFIs, which adhere to Sharia’s prohibition of riba (usually interpreted as a ban on interest), present an alternative. Differences between conventional and Islamic MFIs in terms of outreach and financial sustainability remain underexplored; no comprehensive data set details Islamic MFIs either. With new data, collected with a global survey, the authors construct a unique panel of 543 conventional and 101 Islamic MFIs, operating in Islamic and non-Islamic countries. These data suggest that the market for Islamic microfinance is more important than previously recognized, has grown in recent years, and is likely to continue growing in every region of the world. Statistical comparisons, using various estimation techniques, regarding the outreach and financial performance of Islamic and conventional MFIs also reveal that the breadth and depth of Islamic MFIs exceed those of conventional MFIs, though conventional MFIs achieve stronger financial performance. This latter result is not robust though.

This study aims to analyze poverty alleviation and financial inclusion in the mustahik em­powerment program in Pekanbaru. The samples involved in this study were 105 people drawn from four organizations of zakat in Pekanbaru. The analytical technique conducted using qualitative de­scriptive analysis. The results of this study show that the economic empowerment program conducted by zakat institutions in Pekanbaru has succeeded in alleviating the mustahik of the poverty line. Based on the World Bank's poverty line, there are 34.07% of successful out of poverty line. Meanwhile, if using the Government poverty line then there are 60.29% mustahik who managed to get out of the poverty line. However, this empowerment program has not been integrated with the sharia micro­finance institutions. Therefore, the empowerment program for mustahik should be integrated with Islamic microfinance to pursue successful financial inclusion for mustahik.

This paper aims, at the very minimum, to examine the role of women in achieving shared prosperity through Islamic microfinance in Malaysia. It will also examine and study the impact of Islamic microfinance, as a catalyst for women in achieving shared prosperity and hence boost the economy. Whilst there are many researches conducted by scholars on the impact of the Islamic microfinance in promoting inclusive growth, reducing inequality and accelerating poverty reduction, this paper attempts to explore the current impact of the Islamic microfinance particularly on women involvement in entrepreneurial activity in Malaysia to achieve shared prosperity.

The potential of Islamic microfinance is significant in contributing towards the alleviation of poverty and also promoting development of a nation. This is because Islamic microfinance has the ability to nurture its clients from being a recipient of zakat (obligatory contribution) to eventually becoming a zakat payer in the future. From the capital assistance provided to clients, Islamic microfinance institutions monitor its clients’ growth from start-up all the way to success. The emergence of technology had made life much simpler in the past few years. Also, with the interaction between members of the community, benefits of establishing this community via Islamic microfinance institutions would be expanded, rather than acting as capital provider alone. This can be made possible with the introduction of community currency, which is a medium to exchange goods and services within a community, where this community is defined to be a group with a common bond, such as members of a locality or an association, and it is not restricted geographically. The current study looks into the usage of community currency worldwide. The benefits of community currency usage are hence investigated. Finally with the findings gathered and discussions made throughout the research journey, the current study proposes a community currency framework which could serve as an alternative economy in a Malaysian context. The study examines secondary data, such as reports, documentaries and booklets to understand how community currency is being a success in other parts of the world. The study had also identified one type of community currency that can suit the environment of Islamic microfinance institutions, which is the Local Exchange Trading System (LETS) mechanism.

Maintaining microfinance institutions’ (MFIs) sustainability is extremely significant owing to the fact that it aims at alleviating poverty and improving the living standard of the poor at the same time. Hence, a sustainable Micro Finance Institution (MFI) is necessary in order to achieve the objective thereby realizing a just economic growth. Nevertheless, there are issues and challenges being faced by the institutions that could give impact towards their sustainability. Among others are moral hazards and adverse selection problems among participants that would ultimately give potential risks to the institutions. Hence, maintaining its sustainability by way of risk management is significant in ensuring financial inclusion of the poor and materializing the objective of poverty alleviation. This quantitative study was conducted to examine the practice of risk management in the specific context of Islamic microfinance (IMF) product offered by several Islamic financial institutions in Malaysia. Primary data were collected through the distribution of questionnaires to the selected officers of the bank. Findings of the study indicated that the institutions had taken the necessary steps in managing the risks.

Islamic microfinance programs have been used, for some time in Bangladesh, as an instrument to empower women and fight poverty. Women are specifically targeted by Islamic microfinance under the rural development scheme of Islami Bank Bangladesh Limited (IBBL), which provides interest-free-loans and many other benefits to the women groups involved. The main aim of this paper is twofold: firstly, to check for a positive relationship between Islamic microfinance and the socio-economic welfare of women and secondly, to explore the perspective in which Islamic microfinance packages function in Bangladesh and how the system of their performance can be enhanced. Based on a structured questionnaire survey, this study addresses two research questions: (1) What should be anticipated from the program of Islamic microfinance provided by IBBL on the well-being of the beneficiaries.(2) Under what circumstances would such a program be more useful?. The main result of this study shows that the growth in women’s revenues and resources plays an important role in improving women’s financial freedom and sense of self-possession. However, a significant policy lesson from this study is that, it is essential to redirect Islamic microfinance to more sectors and more beneficiaries, in order to spread its benefits in the developmental activities, which will drive the contribution towards the well-being of the recipients and toward the socio-economic development of the country, in the long-run., Islamic microfinance programs have been used, for some time in Bangladesh, as an instrument to empower women and fight poverty. Women are specifically targeted by Islamic microfinance under the rural development scheme of Islami Bank Bangladesh Limited (IBBL), which provides interest-free-loans and many other benefits to the women groups involved. The main aim of this paper is twofold: firstly, to check for a positive relationship between Islamic microfinance and the socio-economic welfare of women and secondly, to explore the perspective in which Islamic microfinance packages function in Bangladesh and how the system of their performance can be enhanced. Based on a structured questionnaire survey, this study addresses two research questions: (1) What should be anticipated from the program of Islamic microfinance provided by IBBL on the well-being of the beneficiaries.(2) Under what circumstances would such a program be more useful?. The main result of this study shows that the growth in women’s revenues and resources plays an important role in improving women’s financial freedom and sense of self-possession. However, a significant policy lesson from this study is that, it is essential to redirect Islamic microfinance to more sectors and more beneficiaries, in order to spread its benefits in the developmental activities, which will drive the contribution towards the wellbeing of the recipients and toward the socio-economic development of the country, in the long-run.

The purpose of this study is to examine the effectiveness of linkage program between IslamicBanking (IB) and Baitul Maal Wat Tamwil (BMT) on BMT financing growth and profitability. Thisstudy also aims to compare three linkage models and to explore the keys factors that affect the implementationof linkage program. To achieve these objectives, both quantitative and qualitative researchmethods are employed. The dataset consists of the financial statement of 26 BMT in Indonesia andinterviews with 12 managers of BMT and IB in Jakarta. The findings suggest that a synergy betweenIB and BMT through linkage program has significant impact on BMT financing growth and BMTROE. Among three linkage models, executing model appears to be the most preferable model, both byBMT and IB. The finding also suggests that internal and external factors at BMT level have impactson the effectiveness of linkage program.

The paper intends to contribute to the ongoing debate of whether group-lending policy are sustainable and able to achieve and maintain sound repayment performance, while serving poor borrowers without the support of third parties such as takaful operator. By aiding new features in better promoting group lending policy with hiwalah, it can further promote the development and sustainability of Islamic microfinance institutions.

The role of Microfinance in alleviating poverty and enhancing social development is increasing. However, Microfinance Institutions (MFIs) suffer from two important problems which undermine their growth. The first one is inherent to their exposure to information asymmetry (adverse selection and moral hazard). The second one is related to the higher cost of debt enforcement especially in the developing countries where they are generally operating. The problem of costly monitoring is also faced by Islamic Microfinance Institutions (IMFIs) and becomes more important in the case of Profit and Loss Sharing contracts. This paper provides a literature survey about the best practices of the MFIs in term of monitoring, discusses their relevance to the IMFIs, and explores the development of specific regulatory and institutional mechanisms to enhance the performance of different schemes of Islamic micro lending programs. It comes up with a number of policy recommendations (for policy makers and managers of the microfinance institutions) detailing the directions of enhancing the regulatory and institutional environment for the sustainable growth of the Islamic microfinance industry in the OIC countries.

Islamic microfinance is one of the essential inconventional branch of lending that uses by Islamic microfinance providers for financial and social inclusion to provide resources for low-income people as well as the extremely poor. Through the in-bodied social inclusion tools, Islamic microfinance can best used to mitigate the negative impact of the extreme poverty. Since financing micro-borrowers and extremely poor are highly risk, the need for efficient and effective regulatory and supervision of microfinance frame work is very important. This research investigated Sudanese Islamic microfinance regulatory and supervisory framework. Despite of the exerted efforts by Sudanese government through providing favorable climate and the establishment of Islamic financial intuitions and establishing structured microfinance framework, the results showed that Sudanese microfinance regulatory framework is not providing best outreach. Through more than ten years since the first initiative the results illegible clients have reached less than 3%. Despite the continuous increasing of the ceiling portfolio by the regulatory authority until reached 12% from 4% since the first issued rules in 2006, the actually utilization only 2% at the end of the year 2013. This might be due to several reasons such as bad basic infrastructures, ineffective follow up by the regulator of the microfinance providers, Islamic microfinance deliberately ignoring the rural areas clients’ because of the high risk, the framework lack of the building capacity tools for clients as well as for the microfinance providers staff. The results of this research gives strong policy implications for both to Islamic microfinance regulator and providers to carry on real revision and evaluation for the efficiency and effectiveness of the current operated microfinance frame work in Sudan. The results might be useful for Islamic microfinance regulators and providers in Muslims countries and interested providers in the West the benefit from the nullified factors that render the regulatory framework ineffective.

This Study seeks to adapt the framework practiced by various MDBs particularly international Development Association (IDA) to the potential establishment of Gobal Waqf fund as this framework is proven to be effective. The framework revolves around the IDA operations with replenishments, allocation of funds by implementing specific formulas and the determination approach which is mainly to monitor effectiveness of the earlier processes. Apart from this framework, it is suggested that a good governance system also plays a vital role in the raising and managing of the global waqf funds. This research is purely qualitative in nature by studying the mechanisms used in IDA and other MDBs and drawing their examples and experiences. The lessons learnt are meant to complement further the fundamentals of Waqf. This study finally proposes indicators that integrate with the targets of an Islamic vision of development, which could facilitate the allocation of funds. The steps to raise funds for global waqf fund are also proposed with the objective of creating more effective approach for raising of funds for a global Waqf fund.

The objective of this paper is to present theoretical proposals for institutional structure in the context of Islamic Microfinance by first comparing Conventional and Islamic microfinance institutions and then by highlighting some of the pioneering work of conventional microfinance models that paved the way for Islamic Microfinance. In this paper, we review the literature of microfinance models that simultaneously deals with several facets of poverty by combining Waqf and Zakah principles together or individually. There are three models examined in this paper i.e Waqf-Based Islamic Microfinance Institutions, a Model of Zakah and Awqaf-based MF Organizations and an Integrated Awqaf and Zakah Model of Microfinance. Both Zakah and Waqf mechanisms are considered for Islamic microfinance not only because of their frameworks that are in accordance to the Shariah but they are the original concepts provided in Islam that serve people in need i.e the poor. In tandem with the doctrine of microfinance, Zakah and Waqf are seen as tools best suited to assist the poor who require financing and ultimately could be effective for poverty reduction. The paper derives recommendation for integrating microfinance models into the overall economic policy.

The thesis primarily focuses on the investigation of repayment performance under conventional interest based (IB) contracts and non-interest based contracts (Profit Sharing-PS and Joint Venture-JV) using an experimental approach. Towards the end, we conducted three different experiments with three different types of subject pools. The first experiment was a classroom experiment conducted at the International Institute of Islamic Economics (IIIE), International Islamic University, Islamabad (IIUI), Pakistan, using student subjects. The second experiment was an artefactual field experiment using subjects from the general populace in a semi-rural town of District Sialkot, Pakistan. The third and the last experiment was a laboratory experiment conducted at the University of Sydney, Australia, using undergraduate as well as graduate students. Significantly, our subject pool was a mix of both male and female in all the three experiments. Repayment performances under these contracts were analysed under different situations such as contract enforcement with penalty conditions set by the lenders. We also attempted to identify the preferences of the subjects by allowing them to choose over such contracts. Further, we studied the effects of peer monitoring on the repayment behaviour of the subjects. We also explored how gender differences and the degree of religiosity of subjects affect their repayment behaviour. Importantly, in all our experiments, we studied the behavioural responses of the subjects under individual as well as group lending - mutual decision scenarios except for the laboratory experiment in the University of Sydney, Australia, which was based on group lending with joint liability. Chapter 3 of the thesis reports on the classroom experiments (conducted in Pakistan) and compares the repayment performance of subjects under three different contracts. Our results indicate that in terms of repayment frequencies, PS and JV contracts dominate the IB contract, in both individual and group lending - mutual decision situations. The effect of enforcement and penalty conditions resulted in a significant increase in the repayment frequencies. Prior knowledge of Islamic economics and the degree of religiosity of the subjects significantly and positively affected the repayment behaviour. However, no significant gender differences were observed in this study. Chapter 4 of the thesis reports on an artefactual field experiment (conducted in Pakistan) and studies the preference of subjects over the PS and the IB contracts as well as how these affect subject’s repayment behaviour under individual as well group lending - mutual decision setting. We found a strong preference of the subjects to opt for the PS contract over the IB contract. However, the repayment rates across the contracts did not differ significantly. Enforcement and penalty treatments along with the religiosity of the subjects had a significant and positive effect on the repayment behaviour of the subjects. Chapter 5 addresses the effects of peer monitoring and choice of contracts (among PS and IB) on the repayment behaviour of the subjects in a laboratory experiment conducted at the University of Sydney, Australia. We noted that monitoring had a statistically significant and positive effect on the repayment rates. While we found the subjects have a preference for the PS over the IB contract, the choice of contracts did not have an effect on the repayment rate of the subjects. Nevertheless, unlike in our earlier experiments, the degree of religiosity was not found to be an important variable affecting the repayment behaviour of the subjects. Overall, we feel that the Muslim communities would have a natural preference for the use of non-interest based contracts (like PS or JV) over conventional interest contracts (IB). This is possibly because of the religious sentiments against the use of “usury” contracts. This preference, however, can also be because of the “perceived fairness” of these contracts. Under these contracts, the borrowers are required to pay only when the project succeeds (but not when it fails) unlike in the conventional interest based contracts. Thus, we argue that non-interest based microfinance contracts could be effective alternatives for the Muslim communities. Our study also suggests that peer monitoring within the group members could be an effective way to increase the repayment rates of the borrowers. Finally, in a real world context, the Microfinance Institutions (MFIs) may be better off, leaving the choice of contracts to the borrowers as this may lead to an increase in the effort level, which will result in higher repayment rates.

Microfinance has emerged as an important instrument to alleviate poverty in many countries including in developing countries. Despite being able to demonstrate successes in the activity, conventional microfinance is not without controversy. The findings from the existing studies revealed that conventional microfinance is less effective, fail to reach the poorest people and generally have a limited effect on income. In addition, conventional microfinance also has highly criticized for charging excessive interest rates and fees to the poor entrepreneur. In some Muslim countries, conventional microfinance has always been rejected, due to its non-compliance with the Islamic principles, particularly on the issue related to interest or riba . Islamic microfinance evolved and reckoned as an alternative to its counterpart. However, the outreach of Islamic microfinance is very limited where only there is very few Islamic microfinance institutions and Islamic banks involved in microfinance activity. Also, Islamic microfinance is having an issue of convergence of activity with the conventional practices. Thus, this paper aims to propose to adopt Zero Interest Financing Model (ZIFM) for Islamic microfinance institutions. This study focuses on the case of Indonesian Islamic microfinance institution namely Shariah People Credit Bank (BPRS) by observing their experience and some emerging issues. The proposed model is expected to address an emerging issue in Islamic microfinance institutions.

This paper highlights the policies and institutional setting of Small and Medium Enterprises (SME) development in Indonesia, followed by a discussion on the players in Islamic microfinance. Emphasis has been given to the potential role of Baitul Mal wa Tamwil (BMT, Islamic cooperative) as a strategic community-based micro lending initiative. The importance of Islamic microfinance initiatives as part of national program for the development of SMEs in Indonesia is also discussed. This paper argues that Islamic microfinance initiatives in Indonesia could represent an alternative source of finance for SMEs. The role of SMEs, especially after the Asian monetary crisis, was considered a safety valve for the national economic recovery both in enhancing economic growth as well as in reducing the unemployment rate. Credit distributed to SMEs has minimum risk and has sounder and better performance compared to larger enterprises. However, although having a significant role, SMEs actually have serious problems particularly as related to their capability in accessing formal financial institutions. This paper concludes by identifying the potential linkages between players in Islamic microfinance and highlights some critical points in their activities.

This paper explores the features and consequences of heterogeneity among clients of the largest Islamic microfinance institution in Pakistan, identifying differences in business and household outcomes between sub-groups of borrowers. The research is based on a longitudinal survey conducted between 2015 and 2017 of 500 new clients of the institution, providing a unique dataset of low-income entrepreneurs applying for interest-free microcredit loans. The data was analysed using t-tests to establish baseline differences between borrowers, and regression analysis to explore variations in business and household outcomes over the period. Evidence of significant heterogeneity was found among entrepreneurs at the time of the baseline survey. The longitudinal analysis shows that management experience was positively associated with business growth, but no significant association was found for gender, poverty level and credit experience and these variables were not found to associate with significant variation in employment creation. Nevertheless, the analysis does demonstrate a greater reduction in household poverty levels among those entrepreneurs that were poorer at the time of the baseline survey. Additionally, there was a general decrease of savings frequency over the sample period, particularly among female entrepreneurs.