Establishment and Expansion of Islamic Microfinance Instituitions (MFIs) in Africa by Farz Foundation
This report examines the feasibility of expanding Farz Foundation's microfinance activities into select African countries, namely Egypt, Ghana, Mali, Morocco, and Sudan. It discusses key challenges facing the foundation in its efforts to expand into Africa, modalities of expansion, various sources of funding, and a model-based ten year strategic plan for entry into Egypt and Mali. The report states that the Farz methodology of Islamic microfinance has great potential to contribute to grassroots entrepreneurial revitalization in poor countries. Challenges to expansion into Africa include red tape related delays, lack of formal institutions, a weak governance framework, and significant law and order problems. To expand outside Pakistan, Farz Foundation needs to:
- Have consistent and stable access to financial and logistical resources;
- Streamline these resources with stable employment-generating business opportunities and an environment that is compatible with Islamic microfinance;
- Collaborate with existing NGOs and grassroots level organizations in the countries where it seeks to expand;
- Gain financial security by seeking funding from larger development focussed NGOs like the World Bank, African Development Bank, and Ford Foundation;
- Develop profit-generating, self-sustaining business models in the countries in which it wishes to operate.