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Monday, 16 April 2012

Islamic Microfinance indispensable for poverty alleviation

Lahore—UNDP in collaboration with USAID and CGAP jointly organized Iraq Microfinance Policy Forum” on April 10 & 11, 2012 in Erbil-Iraq, for setting up Policy Goals for Microfinance in Iraq, which was participated by high Government functionaries from Iraq Government, including Advisors to Prime Minister, Central Bank in Iraq, USAID, ILO, UNOPS, CGAP, UNHABITAT representatives. Representatives from Yemen, Jordan, India, Italy, Poland, UAE, Syria and many other many Countries also participated in this Conference. Muhammad Zubair Mughal – Chief Executive Officer of AlHuda Centre of Islamic  Banking and Economics (AlHuda-CIBE) presented his paper on “Microfinance Policy in Asia and the increasing trend of Islamic Microfinance” which was appreciated by many experts present at the Forum.

Zubair Mughal presented a detailed analysis of poverty in 52 Asian countries with their techniques and strategiesPoverty alleviation, legal and regulatory reforms, Minimum Investable Funds limits, Interest rates and other improvements efforts in Microfinance sectors. While declaring thePoverty analysis of these countries, In-spite of having Oil and other minerals these countries are having 22.9% in Iraq, 18% in Iran, 34.8% in Yemen, 13.3% in Jordan, 12.5% in UAE, 28% in Lebanon and 11.9% people in Syria are living below the poverty line. Even more worrying point is that 96% of the population in these countries is Muslims and the cause being that they avoid the conventional system of Microfinance as it is based on ‘Riba’ (theInterest). So the only solution to alleviate poverty in these countries is to adopt for Islamic Microfinance system. These countries can only brought to development by adopting the Islamic Microfinance following the Islamic Shariah. Yemen Iraq and Syria have already undertaken a start and this will create room for more Islamic Microfinance Institutions to be setup in these countries.

He further emphasized the need for Islamic Microfinance through the research and surveys conducted by IFC, CGAP, USAID, Frankfurt School and FINCA wherein it is proved that the Muslim population in these countries prefer Shariah compliant ways instead of Conventional System of Microfinance.

(Pakistan Observer / 10 April 2012)
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