Conference and Workshop Report on "Islamic Modes of Financing"
This document presents the details of a conference-cum-workshop that the 'Association for the Creation of Employment' held in Peshawar, Pakistan.
The workshop aimed to:
- Create awareness and develop a practical lending model in Pakistan that could be immediately implemented at the micro-level, and then modified, if necessary, according to Islamic principles;
- Diffuse tensions between the clergy and development workers.
The details of the workshop are as follows:
- Speakers explained economic concepts and shared their experiences;
- Participants applied these principles and concepts to real-life situations;
- The workshop developed models lending for livestock, agricultural inputs and trading, shop-keeping and machinery loans.
The results of the conference were as follows:
- Positive feedback from the clergy and Academia;
- Appreciation from the clergy of the work of the non-government-organization (NGO) sector.
The participants of the workshop recommended:
- Experimentation of these models and repetition of these exercises;
- Distribution of information among the public, enabling them to know what to demand and how to enter into contracts that Islam allows.
The conference made the following points:
- The objective of Islamic banking was the maximization of social benefits through the creation of healthier financial institutions;
- Islam allows two parties to negotiate profit/loss so that the higher productivity of one partner or the additional services that one partner provides could be adequately compensated;
- The Grameen Bank model would be suitable for Islamic microcredit because it is group-based and allows internal monitoring.