The Islamic finance institutions (IFIs) operate within a special incentive structure, as briefly discussed below. While operating within the incentive structure, the IFIs cannot invest in microfinance initiatives beyond a certain limit, which is often criticized to be nominal or unsatisfactory. Therefore, in order for the IFIs to play the desired microfinance role, microfinance needs to be incentivized for the IFIs in a manner that is consistent with the existing structure. As for the existing incentive structure, the IFIs not only compete with their conventional counterparts but are also striving for integrating Islamic finance with the international financial markets. Both the competition and the pressure for integration force a special legal, regulatory and financial environment for the IFIs. On the legal and regulatory side, IFIs must conform to the conventional corporate form, which introduces a first tier of constrains on the IFIs activities. Financial competitiveness introduce a
Year
2008
Country
United States
Language
English
Abstract
English
Select type of work
Conference
CIS Program Old
CIS publications
No
CIS Thesis
No