Islamic Finance, Rural Cooperative Financial Institutions (Credit Unions) and Micro Financing Strategies

The paper analyzes Islamic finance within several countries, focusing on rural cooperative financial institutions and microfinancing strategies. Main organizations and high-stake operators are identified, along with the roots and causes of the ‘underground economy.’ The ‘underground economy’ of an Islamic country depends on its tax system, its penal code, and the enforceability of its financial regulations. The paper addresses the traditional Islamic injunction against interest, the rise in total liquidity within these nations, and how microfinancing strategies can easily comply with Islamic law.