Author Organization:
The following is taken from a press release from the AlHuda Centre of Islamic Banking and Economics:
Istanbul, Turkey, February 2, 2012 – Today concluded the International Summit on Islamic Microfinance held in Istanbul. The basic purpose behind this summit was to promote Islamic Microfinance and to elucidate the strategy to remove obstacles from its way to progress. Microfinance experts from different continents like Africa, Asia, Europe, and America participated in the summit.
While speaking to the opening session of the summit, Muhammad Zubair Mughal, Chief Executive Officer, AlHuda Centre of Islamic Banking and Economics, said that Pakistan has been acknowledged as a leader in the Islamic Microfinance Industry and right now in Pakistan, more than 20 institutions are providing microfinance services. While highlighting the importance of Islamic Microfinance, he said that around the world, conventional microfinance has badly failed and its examples can be clearly seen in India and Latin America. He further added that due to the failure of conventional financial system, many countries in the world are adapting Islamic Microfinance systems for poverty alleviation through which not only poverty will be eradicated but also a sustained economy shall come into being in these countries.
While addressing to the summit, he further added that one reason behind expansion of poverty is interest base mechanism in Muslim countries; people do not use the financial and banking system due to interest as it is strictly prohibited in Islam. Hence they are forced to live in poverty, whereas through Islamic Microfinance by using the financial products based on Shari’ah principles, we can get the people out from poverty. He further highlighted the need assessment of Islamic Microfinance in Muslim countries by saying that 44 percent of conventional microfinance clients live in Muslim countries and United Nations has added half of the countries of Islamic Development Bank in the list of least developed countries which shows that Islamic Microfinance can be used to eradicate poverty from Muslim-majority counties.
Collectively, according to Zubair Mughal, of the 2.4 billion people in the East and South Asia, West Africa, Caucasus, and MENA regions, 48.3 percent are Muslim, which clearly shows the need of Islamic Microfinance for poverty alleviation in these regions. He further added that not only Muslims but Non-Muslims can also get benefits from Islamic Microfinance because Islamic Microfinance is not a religion but a system which is equally useful for Muslims and Non-Muslims.
He said that Islamic Microfinance is essential to achieve the Millennium Development Goals (MDGs) proposed by United Nations for alleviating poverty and social uplifting. He further added that if development of Islamic Microfinance starts today, these goals can easily be achieved by 2015. He said that the Islamic Microfinance sector is facing difficulties due to apathy of donors and to address this deficiency, sukuk (Islamic bonds) can be issued. He further said that more financial products can be introduced by enhancing research in the field of Islamic Microfinance and there are many opportunities for development in this field. AlHuda Centre of Islamic Banking and Economics has established a specific Microfinance Help Desk so that trainings, research, and technical consultation can be provided to microfinance institutions worldwide.
Throughout the summit, the role of Pakistan as global leader in the development of the Islamic Microfinance industry has been recognized.
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