FINANCING THE POOR: TOWARDS AN ISLAMIC MICRO-FINANCE
A one-day symposium, involving conventional micro-finance practitioners and Islamic finance industry professionals to discuss the issues and challenges surrounding the implementation of Shari.a-compliant micro-finance initiatives, to be held at the Harvard Law School on April 14th, 2007.
PURPOSE:
Islamic finance, though endowed with a core foundational goal of social justice and the eradication of interest, has become in the eyes of many an option primarily for the rich and not for the common man. Micro-finance, though often criticized for charging high interest rates to its rather poor clients, has demonstrated successes as a finance tool in helping to reduce poverty and to encourage economic growth in often neglected, rural areas. Indeed, these organizations have justified their fee structure through various models. For example, Grameen Bank treats its borrowers as shareholders while BRAC (Bangladesh Rural Advancement Committee) asserts that its fees are part of a service charge for providing services such as monitoring, supervision, advice and insurance. Both Islamic finance and micro-finance have the noble goal of economic justice. This symposium seeks to bring representatives from both industries to discuss the role of the Islamic Finance industry in expanding access to financial services to the poor, through existing micro-finance organizations or the development of new shari.a- compliant micro-finance organizations. Potential areas of exploration include the role of the Islamic Finance industry as a source of funds for microfinance initiatives as they approach capital markets for financing. This may also include the harnessing of traditional Islamic financial institutions such as zakat a ...