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Islamic microfinance :

Islamic microfinance : . An Instrument for Poverty Alleviation. B. 1. The background. The background. B. The facts about the low income society. 1. The low income segment is significant, particularly in developing countries ;

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Islamic microfinance :

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  1. Islamic microfinance: An Instrument for Poverty Alleviation

  2. B 1 The background

  3. The background B The facts about the low income society • 1. The low income segment is significant, particularly in developing countries; • 2. There is a need to establish special vehicles to accommodate the low income society with appropriate financial facilities providing them fair chances to develop themselves, and • 3. In some countries, this becomes part of national initiatives in reducing unemployment rate and promoting broader production base.

  4. The background B Sourcesof financings • Capital market • Commercial banks • Other sources Big enterprises 4.3k (0.01%) Medium enterprises 39.6k (0.08%) • Commercial n rural banks with plafond of USD 15.000 • Government supported programs Small enterprises 520.2 k (1.01%) • Commercial n rural banks, and microfinance institutions • Government supported programs • Zakat institutions Micro enterprises 50.7 M (98.9%) Marginally poor • Poverty alleviation program • Zakat, infaq and sadaqah institutions Absolute poverty Sources: Ministry of cooperative and small and medium enterprises

  5. The background B Critical issues • Persisting demand-supply gap in terms of fund, particularly in remote areas. • Lack of coherent microfinance policy and comprehensive microfinance development strategy, enabling legal environment and regulatory framework, insufficient supervisory authority (esp. for BMTs & Zakah Fund Institution)  livelihood of MSMEs & MFIs – Macro Level • Diverse financial / non-financial infrastructure comprising of technical service & training providers, rating agencies & auditors, professional networks & associations, credit bureaus, transfer & payment system operators, and IT providers – Meso Level • Relatively weak human and institutional capacity – Micro Level

  6. The background B The rationale for development MFIs Working capital to support productions Broader Supply MSMEs Economic Growth ZFIs Broader Demand Fundamental support for consumptions

  7. B 2 Financing scheme

  8. Financing scheme B

  9. Financing scheme B

  10. B 3 The programs

  11. The programs B Problems Lack of fin support Lack of fin support No collateral Life problem Lack of integrity Basic needs Solution Commercial funds Technical assistance Spiritual treatment Social funds Development program

  12. The programs B Institutions Islamic banks or microfinance institutions Government Supported programs ZISW Consultant or university Programs Commercial funds Technical assistance Spiritual treatment Social funds Development program

  13. Thank you for your kind attention and support B

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