Islamic Microfinance for Sustainable Development

About 1.2 billion people around the globe live in extreme poverty and 870 million go to bed hungry every night. The ILO estimates that almost 202 million people were unemployed last year, an increase of five million over 2012.1 In this perspective a lot of thinking is going on to find practical solutions for the problem of widespread poverty. The idea of microfinance has received a lot of attention in the economic literature. Naturally, the Muslim economists also got interested in the idea as the Islamic laws of zakāh and waqf provided a lot of scope for adapting the concept in the Islamic framework. Despite its popularity in the literature, microfinance is available to merely 100 million people around the globe, out of which only a minority is Muslims. A vast majority of the Muslim poor do not avail of the conventional microfinance as it involves dealing in interest. That has diverted attention of the Muslim societies and Islamic financial institutions to find ways and means for providing microfinance on terms and conditions that are Islamic. The idea was to help the Muslim poor overcome their inhibitions and provide means for improving their lot through religiously acceptable means of finance. That gave birth to the idea of Islamic microfinance. The present book is a welcome addition to the scant literature on Islamic microfinance. An Introduction by Nasim Shah Shirazi provides the context and summarizes the outcomes of the individual papers providing an overview of the contents to the interested readers. The book brings together thirteen selected papers presented in a conference on “Inclusive Islamic financial sector development: Enhancing financial services for the microenterprises” organized jointly by Islamic Research and Training Institute (IRTI) and Sudan Academy for Banking and Financial Services in October 2011.