The Influence of Faith on Islamic Microfinance Programmes
Since Islamic microfinance is a new area, and because the outreach of such programmes has so far been limited, relatively little research has been conducted on their impact. This paper examines one such programme that is being implemented in Kosovo under the auspices of Islamic Relief and explores a number of questions.
Does an association with faith make Islamic microfinance programmes more or less effective? Can faith-based microfinance providers reduce problems of moral hazard and adverse selection, and as a result encourage higher repayment? Are programme staff more motivated? This investigation explores these and other issues by interviewing both borrowers and programme staff. This paper also describes the Islamic financing principles that govern the structure and operations of Shari’ah-compliant microfinance programmes as well as the principal financing methodologies employed.
Khan, A & Philips, I (2010). The Influence of Faith on Islamic Microfinance Programmes. Islamic Relief Worldwide, Birmingham, [Online] Available at: http://policy.islamic-relief.com/downloads/127-The%20influence%20of%20fai.pdf