Looking for new ways to serve Muslim microfinance clients
“To alleviate poverty in Pakistan, we have to focus on the farmers,” says Farida Tariq, founder and chief executive officer of Wasil Foundation, a microfinance institution. “But many farmers will not opt for interest-based lending because of religious reasons.”
To address this gap, Wasil started offering a Sharia-compliant microfinance package aimed specifically at smallholder farmers.
To address this gap, Wasil started offering a Sharia-compliant microfinance package aimed specifically at smallholder farmers.
Wasil Foundation: Islamic Financing to Farmers
Wasil is an example of how microfinance and Islamic finance can be successfully combined.
An estimated 650 million Muslims live on less than $2 a day. Examples like Wasil show that Islamic microfinance can play a key role in bringing the poor into the financial mainstream in a way that doesn’t force them to choose between their religious practices and their wallets.
But despite an impressive increase in the number of financial service providers that offer Sharia-compliant microfinance products in Muslim countries, Islamic microfinance is still limited to a few countries. The range of offerings is narrow as well – most are largely focused on the cost-plus-markup product known as murabaha, which is geared toward asset purchases.
