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== Top 20 FREQUENT WORDS ==
islamic 136
imfis 134
funds 103
mfis 98
beneficiaries 84
percent 68
financing 66
development 63
members 58
conventional 54
rescue 50
institutions 49
fallah 44
noble 44
social 44
economic 42
income 42
microenterprises 41
credit 40
financial 40
microfinance 40



== DOCUMENT KEY POINTS ==
*i gratefully acknowledge the assistance and support of the following in conducting the field survey on islamic microfinance institutions in bangladesh shah abdul hannan and muzahidul islam of islamic economics research bureau field surveyors mohammad nurul huda sheikh muhsin ali md
*introduction with the failure of experimenting in top down trickle down development policies for a few decades to alleviate poverty in most developing countries financing microenterprises is considered a new paradigm for bringing about development and eradicating absolute poverty

*apart from identifying the differences between the conventional mfis and their islamic counterpart the paper addresses how the latter mfis deal with some of the inherent problems of the former
*given the important role of development that microenterprises play in poverty alleviation this section argues for social intermediation by specialized microfinance institutions

*these barriers can accentuate the asymmetric information proble miss physical barriers of poor infrastructure like lack of markets roads power communications can worsen both the adverse selection and moral hazard proble miss physical constraints inhibit the financial institutions to gather information on their prospective clients and once credit is advanced it is difficult to monitor the use of the funds

*while small scale business has been the focus of some development policies the smallest amongst them were left out from these progra miss the problems of financing pointed out above become more acute in case of microenterprises run by impoverished

*other than meeting the target group criterion and the description of the project for which funds are sought the prerequisites may include knowing how to sign names memorizing of certain rules regulations and slogans that form the basis of the social development program

*microfinance alleviates poverty as the credit given in successive years is used in productive economic activity ies increases the household income and saving and enables the household to build up its own capital
*this process of graduation is termed by muhammed yunus as the virtuous circle of a low income credit investment more income more credit more investment more income see hulme and mosley a p

*reports that in percent of the malawi mudzi fund s a mfi in malawi borrowers were in arrears because they diverted the funds for consumption purposes

*rahman further reports that targeting the women as beneficiaries of credit by mfis creates tensions within the household and increases frustration and violence in the family
*though there has been discussion on financing small scale enterprises by specialized institutions and islamic banks using islamic modes see mohsin and yousri the new innovative poverty focused format used by mfis has not been examined

*what is relevant for microfinancing is the price deferred sale baya mu ajjal in which the object of sale is delivered at the information on imfis in this section was gathered in a field survey and interviews with the officials of these institutions conducted by the author

*in trading the imfi and the client can jointly finance the purchase and selling of a certain good and distribute the profit
*one reason is that extreme poverty leads to the diversion of some hypothetical examples to illustrate some ways in which islamic financing principles can be applied can be found in ahmad

*social development program whereas the content of the social development program of conventional mfis is secular and sometimes anti islamic in nature the counterpart of imfis has islamic content
*one way to do this is to provide qard hasan interest free loans to the person facing problems in paying the installments

*work incentive of staff members given the islamic approach of imfis the attributes of staff members working in them are different from the conventional mfis
*dealing with default to deal with arrears and default conventional mfis use group and center pressure

*imfis and their beneficiaries nature and characteristics in this section we present the information gathered from three imfis operating in bangladesh and their beneficiaries

*often the initial activities of the imfi start with the contributions of the members of the board of directors
*after discussions with the officials of ierb and amwab al fallah aam unnayan sangstha noble educational literary society and rescue were chosen for the survey

*table basic data of the beneficiaries of imfis included in the sample al fallah noble rescue sample size female of total
*whereas total income includes income from all sources including donations grants operating income includes that generated from investments and returns on deposits with banks

*this ratio however may be misleading for mfis if the total income is used since a part of the income of these institutions is in the form of grants
*habib ahmed financing microenterprises we define total profit as total income less total expenditures and operating profit as the difference between operating income and costs

*a intended use of funds contrary to what applied for this problem arises when the beneficiary applies for funds indicating use of funds in certain productive enterprise but hides the intended use of funds which may be for other purposes including consumption

*the imfis also involve the male members in the financial transaction by making them responsible in the contract by making them sign the contract

*the concept of islamic brotherhood along with religious duty of debt repayment can further improve the relationship of the group members and help clear the installments
*table indicates that there are no arrears in payments for al fallah and noble and percent beneficiaries have fallen back on payments in case of rescue

*table reveals that the imfis funds have been successful in increasing the time spent on income generating activities by the beneficiaries and other members of the household
*habib ahmed financing microenterprises table group dynamics arrears in payments by beneficiaries arrears in payments al fallah noble rescue yes no the reasons of arrears were stated as business failure natural disaster and family and other mishaps

*table economic impact imfi s fund effects on economic activity and assets of beneficiaries effect of fund al fallah noble rescue increase in volume of goods services

*to make the transaction islamically acceptable the imfis should ideally buy the good asset from the market and sell it to the beneficiary at a mark up
*habib ahmed financing microenterprises table social educational impact on beneficiaries al fallah noble rescue knowledge of islam increased better relationship with group members better relationship with spouse have benefited other than financially

*table problems faced in monitoring by imfis al fallah noble rescue lack of personnel physical barriers difficult to assess financial flows other lack of vehicles the number of branches covered under the survey were and for al fallah noble and rescue respectively

*one implication of lack of funds is as the officials of imfis indicate that the benefits package given to employees in imfis is not as good as the one given by the established mfis operating in the neighborhood

*this occurs because on the one hand there is an increase in the productivity of employees ie reducing the costs and on the other hand it reduces the default rate ie increasing the revenue

*noting that financing microenterprises involves meager amounts of investment a relatively small amount provided to imfis can go a long way in affecting the lives of a large number of poor households in member countries

*appendix i organizational structure of imfis board of directors executive director manager accounts general manager manager administration branch manager branch manager branch manager supervisor supervisor supervisor field worker field worker field worker
*islamic economic studies vol


 ''Please note, This is an auto generated summary based on sentances position in the document and other factors''
== DOCUMENT WORD ANALYSIS ==
=== Main Category ===
: AlHuda Material\islamic micro


=== KeyWords ===
islam finance fund mfis institute developed agricultural financial bankable oper credit rate client econometric mfi loan program beneficiarie imfi sustain



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== DOCUMENT REFERENCES ==


=== Number of Pages ===
38


=== Published Date ===
2106-02-07 09:28:15


== Full Document ==


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[[Category:Islamic Finance]]

[[Category: Islamic Micro]]