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Risk management process: Profiling of islamic microfinance providers


  • Rozzani, Nabilah
  • Mohamed, Intan Salwani
  • Syed Yusuf, Sharifah Norzehan


This study intends to compare and contrast the risks faced by two types of Islamic microfinance providers in Malaysia, which are non-governmental organization and commercial financial institution. Using comparative case study method, interview sessions were conducted on staffs of two Islamic microfinance providers. With respect to their disbursement and repayment system, it was found that both Institution A and Institution B are both exposed to Shariah risk, operational risk and credit risk. In addition to that, as Institution B is an established and reputable financial institution in Malaysia, it is also exposed to reputational risk.

Suggested Citation

  • Rozzani, Nabilah & Mohamed, Intan Salwani & Syed Yusuf, Sharifah Norzehan, 2017. "Risk management process: Profiling of islamic microfinance providers," Research in International Business and Finance, Elsevier, vol. 41(C), pages 20-27.
  • Handle: RePEc:eee:riibaf:v:41:y:2017:i:c:p:20-27
    DOI: 10.1016/j.ribaf.2017.04.009

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    References listed on IDEAS

    1. ZOUARI, Zeineb & NABI, Mahmoud Sami, 2013. "Enhancing the Enforceability of Islamic Microfinance Contracts in OIC countries," MPRA Paper 49816, University Library of Munich, Germany.
    2. Pelka, Niels & Weber, Ron & Musshoff, Oliver, 2015. "Does weather matter? How rainfall shocks affect credit risk in agricultural micro-finance," 2015 Conference, August 9-14, 2015, Milan, Italy 212617, International Association of Agricultural Economists.
    3. Yu Da & Eldon H. Bernstein, 2014. "A Modified Microfinance Model Proposed for the United States," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 4(7), pages 87-99, July.
    4. Lagoarde-Segot, Thomas, 2015. "Diversifying finance research: From financialization to sustainability," International Review of Financial Analysis, Elsevier, vol. 39(C), pages 1-6.
    5. Weber, Ron & Mußhoff, Oliver & Petrick, Martin, 2014. "How flexible repayment schedules affect credit risk in agricultural microfinance," Department of Agricultural and Rural Development (DARE) Discussion Papers 187434, Georg-August-Universitaet Goettingen, Department of Agricultural Economics and Rural Development (DARE).
    6. Annabel Vanroose & Bert D’Espallier, 2013. "Do microfinance institutions accomplish their mission? Evidence from the relationship between traditional financial sector development and microfinance institutions’ outreach and performance," Applied Economics, Taylor & Francis Journals, vol. 45(15), pages 1965-1982, May.
    7. Niels Pelka & Oliver Musshoff & Ron Weber, 2015. "Does weather matter? How rainfall affects credit risk in agricultural microfinance," Agricultural Finance Review, Emerald Group Publishing, vol. 75(2), pages 194-212, July.
    8. Müller, Kirsten & Musshoff, Oliver & Weber, Ron, 2014. "The more the better? How collateral levels affect credit risk in agricultural microfinance," DARE Discussion Papers 1402, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    9. S Chandrakumarmangalam & S C Vetrivel, 2012. "Impact of Group-Based Microfinance on Rural Households in India," The IUP Journal of Management Research, IUP Publications, vol. 0(2), pages 77-89, April.
    10. Gilbert O. Boateng & Akwasi A. Boateng & Harry S. Bampoe, 2015. "Microfinance And Poverty Reduction In Ghana: Evidence From Policy Beneficiaries," Review of Business and Finance Studies, The Institute for Business and Finance Research, vol. 6(1), pages 99-108.
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