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Islamic microfinance is rapidly gaining acceptance in Muslim and non-Muslim countries due to its remarkable success in poverty eradication, a leading industry official has said.
Muhammad Zubair Mughal, Chief Executive Officer of Pakistan’s AlHuda Centre of Islamic Banking and Economics (CIBE), said according to their estimates, the Islamic microfinance market has reached $1 billion.
Mughal was addressing the International Islamic Finance conference in Abu Dhabi recently.
He said currently more than 300 Islamic microfinance institutions are offering their services to 1.6 million clients in almost 32 countries.
“Due to Islamic microfinance’s significant role in reducing poverty, international donor institutions and multilateral organisations such as USAID, IDB, ADB, IFAD, UNDP, World Bank and IFC have clearly explained their policies in different countries...”, he said.
They have suggested further strengthening of Islamic microfinance, which will ensure the quick advancement of Islamic microfinance in near future, Mughal added.
He said if one takes an overview of the last 10 years of the Islamic finance industry, it can be observed that with the passage of time Islamic banking, Sukkuk, Takaful and Islamic fund, have progressed quickly.
In the next three years Islamic microfinance will progress more quickly relative to other Islamic financial products, Mughal added.
He said there is immense research needed in the Islamic microfinance industry so that new Islamic microfinance products can be introduced.
At present, Murabaha alone has 80 per cent share of the total Islamic microfinance market, he added.
The popularity of Islamic microfinance is evident from the fact that many international universities have urged AlHuda CEIMF to assist them in incorporating Islamic microfinance as a subject in their business and finance syllabus, he said.
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