Islamic Micro-finance in Crisis Situations: The Unofficial Development Discourse

While the authenticity, effectiveness and sustainability of specific Islamic microfinance products are often contested, the dynamics that create distinctive microfinance models are mostly ignored. This study uses a comparative study of two countries – Afghanistan and Indonesia- to consider how the interplay of particular political, legal and economic factors creates opportunities for Microfinance Institutions (MFI) to use their relative autonomy to negotiate the design and the delivery of microfinance products. The invisibility of Islamic microfinance in the 2006 mid-term review of microfinance in Afghanistan as well in the donor development discourse in Indonesia is in contrast to the increasing demand for Islamic microfinance in both the countries. This study explores the improvised roles of various stakeholders driving the Islamic microfinance movement and creating new microfinance models. However, the translation of Islamic principles into innovative, pro-poor, gendered and sustain