Book section : Chapter
Islamic financing principles and their application to microfinance
- Abstract:
- The need to conform to certain religious principles affects the structure and operations of Islamic microfinance institutions. We outline the basic principles of Islamic finance and provide an introduction to the different financing instruments commonly used by Islamic microfinance providers. While Islam advocates profit-sharing techniques such as mudaraba and musharaka, most Islamic microfinance institutions consider these too risky and complex to implement and instead favour the simpler cost plus mark-up or murabaha technique. Islamic teachings propose that the poorest should be assisted through qard hasan or interest-free loans.
- Publication status:
- Published
- Peer review status:
- Peer reviewed
Actions
Access Document
- Publication website:
- https://practicalactionpublishing.com/book/1174/islamic-microfinance
- Publisher:
- Practical Action Publishing
- Host title:
- Islamic Microfinance Shari'ah Compliant and Sustainable?
- Pages:
- 1-13
- Chapter number:
- 1
- Publication date:
- 2017-04-15
- ISBN-10:
- 1853399558
- ISBN-13:
- 9781853399558
Terms of use
- Copyright holder:
- Khan et al.
- Copyright date:
- 2017
- Rights statement:
- © Malcolm Harper and Ajaz Ahmed Khan and the contributors, 2017.
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