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Islamic Banking Business Model for Micro Finance
Micro finance means "program that extend small loans to very poor people for self employment projects that generate income in allowing them to take care of themselves and their families" . The World Bank has recognized micro finance program as an approach to address income inequalities and poverty. The micro finance scheme has been proven to be successful in many countries in addressing the problems of poverty. The World Bank has also declared 2005 as the year of micro finance with the aim to expand their poverty eradication campaign.
Microfinance has become one of the most sustainaeffective tools in the fight against global poverty. Islamic microfinance has the potential to not only respond to unmet demand but also to combine the Islamic social principle of caring for the less fortunate with microfinance’s power to provide financial access to the poor. • Islamic banking in the microfinance system is holding a center role in developing the relationship and networking between finance institutions and intrepreneurs. • Microfinance is globally acknowledged as an effective instrument in alleviating poverty refers to finance services such as financing, savings, insurance provided for low-income people or widely called economically active poor. • Indonesia microfinance development role is hold by government. Unfortunately, that it is not sustainable. The people consider it as grant so that sometimes it is not repaid. • Microfinance system and micro enterprise system are connected and promoted by networking among each others, through a group of micro entrepreneurs established by each member. • The Islamic banks in the microfinancing very much relly to the role of the social network, consists of religious groups, social leaders, and local leaders, to get information, support and entrust before the banks lend the loan to the borrowers. It is known as the Network Triangle.
International Seminar on Islamic Financial …
Journal of Islamic Finance IIiBF IIUM
Dr. Muhammad Iman Sastra Mihajat
This paper attempts to elucidate the micro financing products and business models of micro finance in Baitul Maal Muamalat (subsidiary of Bank Muamalat Indonesia). During 2010 Bank Muamalat has been distributed the social fund through BMM as much as Rp 22.8 billion. The funds are distributed in the form of the micro financing program for economic empowerment through LKMS and KUM3 program. LKMS program is channeling fund to Islamic Micro Finance Institutions (IMFIs) through linkage program. While KUM3 program is channeling micro financing to 24 cities that are consist of 183 mosques and 4647 Mustahik (poor recipients). This program encourages Mustahik to increase their business line with modern business management. The program mission are to facilitate the micro business community through the utilization of ZIS (Zakat, Infaq and Sadaqah) funding, to build organization quality of the mosque as a basis of development and strengthening the quality of brotherhood as the basis for the establishment of micro enterprises, encourage the habit of giving, and create awareness of modern business management and ensure the business activity free from Maysir, Gharar, and Ribā. There are three kinds of financing program of KUM3 which are Aqh Model, second, Qard model and the third is Musharakah model. The KUM3 financing model is Sharīcah based model that use a variety of Islamic contract such as profit and loss sharing system between participants. In addition, BMM arranged the curriculum model of financing through the KUM3 program. Keywords: Baitul Maal Muamalat, Micro financing, Business Model
Giacomo Aghina , Idir Boundaoui
This paper is a research on the development of the Islamic microfinance sector in three countries: Yemen, Egypt and Indonesia. The main purpose of this study is to find out which factors are essential for the expansion of the mentioned sector, and if they are comparable to other countries. The research shows that the government's input is a crucial factor for the expansion of the Islamic microfinance sector. In the studied case of Yemen, the government's input has been led by a previous demand research addressed to the population. However, due to the lack of surveys, statistics and, in general, of scientific researches, the confirmation of the last premise – if this demand of first importance is essential for the expansion of the Islamic microfinance- needs to be confirmed by a future specific research within the population/countries selected.
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KABIR TAHIR HAMID
International Journal of Research in Engineering, Science and Management
Jahfar Puthan Peediyekkal
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