Islamic Microfinance Market Size Touches $1 Billion

Apr 2013
Global, April, 17 2013 - The Islamic microfinance industry is rapidly progressing due to its superior performance for poverty alleviation, according to the CEO of AlHuda Centre of Islamic Banking and Economics (CIBE).

Islamic microfinance is rapidly gaining acceptance in Muslim and Non- Muslim countries due to its remarkable performance in poverty eradication; because of which, this industry is making quick progress: “According to our careful estimate Islamic microfinance market's worth has reached $1 billion,” said Muhammad Zubair Mughal, the Chief Executive Officer of AlHuda Centre of Islamic Banking and Economics (CIBE) while, addressing the International Islamic Finance conference as a Guest of Honour.

This conference was organised in Abu Dhabi, where experts and researchers of the Islamic microfinance industry participated from all over the world. The event was organised on 14th- 16th April by the international research and publication organization- Emerald in association with Abu Dhabi University.

Muhammad Zubair Mughal said that currently more than 300 Islamic microfinance institutions are offering their services to 1.6 million clients in almost 32 countries. Due to Islamic microfinance's significant role in reducing poverty, international donor institutions and multilateral organisations like USAID, IDB, ADB, IFAD, UNDP, World Bank and IFC etc. have clearly explained their policies in different countries to further strengthen Islamic microfinance, which will ensure the quick advancement of Islamic microfinance in near future.

He added that if we take an overview of last 10 years of Islamic finance industry, it can be observed that with the passage of time Islamic banking, Sukuk, Takaful and Islamic fund etc have progressed quickly. While, in next three years Islamic microfinance will progress more quickly relative to other Islamic financial products.

He said that to further strengthen Islamic microfinance, AlHuda CIBE has established an international division named Centre of Excellence in Islamic Microfinance (CEIMF). Its major objective is to provide the advisory and consultancy to microfinance institutions so that conventional microfinance institutions can be transformed into Islamic microfinance institution and along with this new Islamic microfinance institutes can be established.

In this regard, Centre of Excellence in Islamic Microfinance is offering its services in Azerbaijan, Yemen, Afghanistan, Pakistan, Mauritius, Indonesia, Kazakhstan and other countries. He stated that there is immense need of research in Islamic microfinance industry so that new Islamic microfinance products can be introduced. As at present, only Murabaha has 80 per cent share of total Islamic microfinance market. He mentioned that the popularity of Islamic microfinance is evident from this point that many international universities have requested AlHuda CEIMF to assist them in incorporating Islamic microfinance as a subject in their business and finance syllabus.

Muhammad Zubair Mughal said that almost half of the world's poverty is prevalent in Muslim countries. One of the reasons for the high poverty rate in Muslim countries is the refusal of Muslims to take interest based-loans. Islamic microfinance is an essential tool to eradicate poverty from Muslim world otherwise the attainment of the United Nation's Millennium Development Goals is impossible, he stated in a press release published after the event.

Source : CPI Financial

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