Interest is one kind of fee charged by a lender to a borrower for the use of borrowed money, usually expressed as an annual percentage of the principal.
In order to free the people from the negative consequences of an interest based system we need an alternative world viewpoint and this is provided by the ethical principles of Islam within the Quran and Hadith.
Village banking model are based on village banks which are normally communitymanaged. The geographical expanse of the study area, inadequate financial resources and time constraints may also reduce the chances of contacting more respondents.
According to Otero Access to finance and collaterals: The major problem of rural development scheme include a instability of rural development institution b inefficient and corrupt leadership c abuse of local govt.
For the transportation problem, supervision of loanees that is whether the loanees use the loan amount properly or not very difficult for the field officer.
An MFI can operate in the form of a commercial bank, rural bank, credit union, cooperative, other non-bank financial institution NBFIdevelopment organization, or non-government organization NGO. In addition, the transformation of many non-governmental organisations NGOs into microfinance banks has led to a strong increase in client deposits and refinancing lines extended under market conditions.
It puts credit, savings, insurance and other basic financial services within the reach of poor people.
Section four present the results of this study and its main findings. The decision of the governing body and management team on any matters is final.
The ultimate objective is to ensure human welfare within the principles, goals and vision of an interest-free Islamic economic system in Muslim heritage communities. Women constitute a vast majority of users of micro-credit and savings services. Microfinance help sustained impact by educating recipients on how to create their own businesses and how to properly manage and grow their money.
Moreover, Islamic jurists have unanimously held the view that it is the collective obligation fardu kifayah of a Muslim society to take care of the basic needs of the poor.
There has been other current deposit taking microfinance institutions in Kenya such as Rafiki and Jammii Bora who are also in the same path.
Negligence of Urban Poor: If available at critical moments, effective tools for savings, payment, credit, and insurance can help households capture an opportunity to climb out of poverty or weather a crisis or emergency without falling deeper into poverty.
Microfinance in this study is the concept by which financial institutions avail savings and credit opportunities to the poor or those who cannot access bank services.Micro Finance in India- for Poverty Reduction Priyanka Ramath & Preethi palmolive2day.com Research Scholars As a developmental and economic tool it has caught the imagination of banks, financial institutions equation between microfinance and poverty alleviation.
microfinance offers an alternative solution to poverty alleviation through more human oriented financing. This is due to the underlying principle of Islamic microfinance is the application of Islamic values to promote social justice for all and to achieve economic development with building human capability as centre of attention.
Fundamentals of behavioral economics and their application to policy and program design. When and how to use experimental methods to evaluate ideas and programs. Interventions and policies that apply to households, small firms, and communities, with particular attention to microfinance, health, and.
4 Hassan & Alamgir () “Microfinance Services and Poverty Alleviation in Bangladesh: A Comparative Analysis of Secular and Islamic NGOs”, in Iqbal, M., editor: “Islamic Economic Institutions and the Elimination of Poverty”. Leicester, UK: The Islamic Foundation.
(), “ Banking for the poor: the role of Islamic banking in microfinance initiatives ”, Proceedings of the 2nd Islamic Conference, Faculty of Economics and Muamalat, Islamic Science University of Malaysia. Microfinance is an effective development tool for poverty reduction for the simple reason that financial services enable poor to take advantage of economic opportunities, to build assets, and to reduce their vulnerability to external shocks that adversely affect their living standards.Download