Cross-post from the Impatient Optimists Blog featuring a report that offers an introduction to the theological tenets of Islamic (micro)finance, a description of the most common products and services, and a global overview of the industry and its major institutions using an anthropological perspective by Bridget Kustin.
"The inherent social justice potential of Islamic economics is a rich and underutilized resource for poverty alleviation. Currently, Islamic microfinance is poised to grow the market of Islamic banking and finance (IBF) by steering poor populations into formal financial activity. Expanding the reach and profile of Islamic microfinance through partnerships and funding strategies can help meet the financial needs of the poor—and help the global IBF industry better embody motivations for Islamic economic activity in the teachings of the Qur’an and Sunnah. In this context, Islamic microfinance holds tremendous potential to tap into often-scattered Islamic donor streams – zakat, sadaqat, and waqf – and channel them toward strategic, impact-oriented goals.
To better understand Islamic microfinance and the role it can play, the report explains the importance of examining cultural contexts as well as accounting practices for indicators and metrics. The anthropological perspective of the report investigates how financial tools come to life in the hands of clients and allows for more nuanced, complex understandings of user experiences through a methodology of “participant-observation,” repeat minimally-structured interviews, and relationship-building. The report also offers historical and theological background, overviews of Islamic financial products, summaries of key countries and institutions, and in-depth examinations of Islamic (micro)finance landscapes in Bangladesh, Indonesia, and Pakistan. Close ethnographic attention has been given to the unique challenges faced by female clients and female-headed households, implications of client relationships with field officers, and the absence of tools for clients to address personal accounting and calculation challenges. The report also offers starting points for digital interventions to meet the needs of the poor while addressing longstanding inefficiencies in Islamic (micro) finance."
Click here to read the full blog post on Impatient Optimists.
For the full report, "Islamic (Micro)Finance: Culture, Context, Promise, Challenges"
Read about Bridget's IMTFI-funded research:
Blogpost #1: "Mobilizing Religion as Value Storage: Islamic Microfinance in Bangladesh as a Model for Poverty Alleviation (Part I). Research Questions and the ‘Islam’ of Islamic Microfinance"
Blogpost #2: "Mobilizing Religion as Value Storage: Islamic Microfinance in Bangladesh as a Model for Poverty Alleviation (Part II). Financial Vocabularies, Accounting and Calculation"
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| An Islamic microfinance collective gathers for its weekly repayment meeting (Chittagong Division, Bangladesh, 2010) |
To better understand Islamic microfinance and the role it can play, the report explains the importance of examining cultural contexts as well as accounting practices for indicators and metrics. The anthropological perspective of the report investigates how financial tools come to life in the hands of clients and allows for more nuanced, complex understandings of user experiences through a methodology of “participant-observation,” repeat minimally-structured interviews, and relationship-building. The report also offers historical and theological background, overviews of Islamic financial products, summaries of key countries and institutions, and in-depth examinations of Islamic (micro)finance landscapes in Bangladesh, Indonesia, and Pakistan. Close ethnographic attention has been given to the unique challenges faced by female clients and female-headed households, implications of client relationships with field officers, and the absence of tools for clients to address personal accounting and calculation challenges. The report also offers starting points for digital interventions to meet the needs of the poor while addressing longstanding inefficiencies in Islamic (micro) finance."
Click here to read the full blog post on Impatient Optimists.
For the full report, "Islamic (Micro)Finance: Culture, Context, Promise, Challenges"
Read about Bridget's IMTFI-funded research:
Blogpost #1: "Mobilizing Religion as Value Storage: Islamic Microfinance in Bangladesh as a Model for Poverty Alleviation (Part I). Research Questions and the ‘Islam’ of Islamic Microfinance"
Blogpost #2: "Mobilizing Religion as Value Storage: Islamic Microfinance in Bangladesh as a Model for Poverty Alleviation (Part II). Financial Vocabularies, Accounting and Calculation"
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