With more than 650 million Muslims living on less than US$2 a day, there is growing demand for a range of Sharia-compliant financial services, yet Islamic finance still represents less than 1% of total global microfinance outreach.
One of the key principles of Sharia-compliant finance is that money has no intrinsic value and cannot increase in worth on its own. There can be no element of interest in Sharia-compliant financial products, making the approach asset-based rather than debt-driven. Instead, risk and profit sharing is encouraged through equity participation in a business. As most traditional microfinance products are based on interest and fees, they are at odds with Sharia-compliant financial services and require that financial service providers develop a different set of products to be Sharia-compliant.
What can you find in this Topic Hub?
Curated by FinDev editors, this Topic Hub offers you access to key resources contributed by organizations around the world who work on the topic of Islamic finance. Our latest blogs and publications on this topic are featured here (in the Resources Tab above), and you can find a collection of papers, case studies and guides to explore further. When there are upcoming webinars, events and recent news on this topic, they will be featured in the Topic Hub as well, so make sure to come back regularly for the latest on this topic. Finally, we’ve selected some key additional resources, which are listed on the right here, where you can learn even more about this topic.
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