Islamic microfinance, A solution to expand financial inclusion?
The global Muslim population counts about 1.2 billion people but over 70% of them do not use formal financial services. Only 0.5% of global microfinance institutions propose the services and products responding to Islamic financing principles (CGAP survey, 2008). Islamic financing is unique and essentially different from conventional microfinance. The sector seeks to provide an economic empowerment tool for poor or disadvantaged people based on Islamic financing methods that avoid interest, but focus on profit and loss sharing.