Islamic Microfinance: Theory, Policy and Practice

This document relies heavily on the accumulated experience of Islamic Relief’s microfinance programs in four countries: Bosnia & Herzegovina, Kosovo, Pakistan, and Sudan. The examples that are provided are drawn almost exclusively from these countries. This paper is divided into nine chapters. The first chapter is an introductory chapter, chapter 2 provides a brief introduction to Islamic financing principles and lending methodologies that need to be considered when designing and operating an Islamic microfinance program. Chapter 3 examines the importance of microfinance program objectives and mission statements. It is essential that each microfinance program has a clear organizational structure with clearly defined staff roles and responsibilities. Chapter 4 explores these issues with examples from Islamic Relief’s microfinance program in the aforementioned countries. Chapter 5 discusses which types of lending methodology are most suitable to extending microfinance to relatively poor