A theory and contractual framework of Islamic micro-financial institutions operations

Edib Smolo, Abd. Ghafar Ismail

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

Microfinance is seen as a new paradigm for bringing about development and eradicating poverty. Many studies prove that the provision of small amounts of credit to the poor is crucial in this new paradigm. However, these studies mainly focus on the conventional microfinance institutions (MFIs) which have already existed for a couple of decades. Their role in helping the poor to achieve higher income and higher standards of living has been well recognized. Currently, there are quite a few MFIs that are operating based on Islamic principles. Although a few studies have been conducted on this subject, the literature lacks a comprehensive theoretical framework to describe the Islamic microfinance institutions (IMFIs). This article explores the contractual framework in modelling the IMFIs, on the one hand, and discusses the role of IMFIs via various modes of financing in providing capital to micro-enterprises, on the other.

Original languageEnglish
Pages (from-to)287-295
Number of pages9
JournalJournal of Financial Services Marketing
Volume15
Issue number4
DOIs
Publication statusPublished - Mar 2011

Fingerprint

Microfinance institutions
Financial institutions
Paradigm
Poverty
Income
Standard of living
Financing
Microfinance
Theoretical framework
Credit
Micro-enterprises
Modeling

Keywords

  • interest-free banking
  • Islamic fi nance
  • Islamic microfinance
  • Islamic microfinance institutions
  • Shari'ah-compliant

ASJC Scopus subject areas

  • Marketing
  • Finance

Cite this

A theory and contractual framework of Islamic micro-financial institutions operations. / Smolo, Edib; Ismail, Abd. Ghafar.

In: Journal of Financial Services Marketing, Vol. 15, No. 4, 03.2011, p. 287-295.

Research output: Contribution to journalArticle

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