: Islamic microfinance, , interest free

December 2019

Microfinance is constituted by a range of financial services for people who are traditionally considered non bankable, mainly because they lack the guarantees that can protect a financial institution against a loss risk. Islamic Microfinance is based on social justice and fair play. It involves prohibition of interest (Riba) on the lent money (loan). It works on profit and loss sharing and Qarz-e-Hasana. It aims at improving socio economic condition of the poor in contrast to earning profits by conventional microfinance institutions in the world. There are families who cannot afford to take loans from microfinance as they are so poor i.e. poorest of the poor who do not have enough to feed themselves two times a day, most of them are illiterate and lack the confidence to do any business activity. The paper studies an Islamic Microfinance institution named Anjuman Anayat-E-Bewagan & Yatama based in Bhopal India which started in 1916 by some Muslims who were well versed with the Islamic teaching and law. This institution gives zakat to poorer people who cannot even afford interest free microfinance.

12-19

2581-5687 (Online) - -- (Print)

Vol.3 - No.2

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ajusem