Islamic Microfinance in Luxembourg
This paper demonstrates how microfinance vehicles can be used to foster Islamic microfinance schemes in Luxembourg.
The paper states that structuring vehicles with Oriental philanthropic and religious principles and combining it with western governance framework could meet the needs of the poorest, who have been excluded from conventional interest-based microfinance solutions. It states that Luxembourg has:
- Implemented legal and tax reforms that permit greater flexibility and meet the needs of international investors;
- Become Europe's number one investment fund center and the world's leading hub for global fund distribution;
- Been involved in Islamic finance for many years;
- Provided domicile to the first shariah compliant insurance company in Europe in 1983;
- Gained experience in fund administration, management and distribution, and can, therefore, offer expertise and a wide range of investment products to promoters;
- Witnessed rapid MFI development.
Finally, Luxembourg investment law and the presence of MFIs facilitate the emergence of Islamic microfinance in Luxembourg.