Financing Microenterprises: An Analytical Study of Islamic Microfinance

The paper gives a general outline and an implementation plan for the establishment of Islamic Microfinance Institutions (MFIs). An evaluation of conventional microfinance institutions is followed by the delineation of an Islamic alternative. The theoretical part of the paper shows that there is great potential in Islamic MFIs that can cater to the needs of the poor. Using case studies from Bangladesh, the paper says that although Islamic MFIs have not used the variety of apparatuses at their hands, nor tapped into all of their potential sources of funding, Islamic Microfinance Institutions have certain inherent characteristics that could lend themselves to helping the poor.