Integrating Zakah, Awqaf and Islamic Microfinance for Poverty Alleviation: Three Models Of Islamic Micro Finance

Khalifa Mohamed Ali
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Khalifa Mohamed Ali: The Islamic Research and Teaching Institute (IRTI)
Authors registered in the RePEc Author Service: Khalifa Hassanain ()

No 1435-19, Working Papers from The Islamic Research and Teaching Institute (IRTI)

Abstract: The objective of this paper is to present theoretical proposals for institutional structure in the context of Islamic Microfinance by first comparing Conventional and Islamic microfinance institutions and then by highlighting some of the pioneering work of conventional microfinance models that paved the way for Islamic Microfinance. In this paper, we review the literature of microfinance models that simultaneously deals with several facets of poverty by combining Waqf and Zakah principles together or individually. There are three models examined in this paper i.e Waqf-Based Islamic Microfinance Institutions, a Model of Zakah and Awqaf-based MF Organizations and an Integrated Awqaf and Zakah Model of Microfinance. Both Zakah and Waqf mechanisms are considered for Islamic microfinance not only because of their frameworks that are in accordance to the Shariah but they are the original concepts provided in Islam that serve people in need i.e the poor. In tandem with the doctrine of microfinance, Zakah and Waqf are seen as tools best suited to assist the poor who require financing and ultimately could be effective for poverty reduction. The paper derives recommendation for integrating microfinance models into the overall economic policy.

Keywords: Waqf and Zakah; Islamic Microfinance; Regulatory systems (search for similar items in EconPapers)
Pages: 20 pages
Date: 2014-01-19
New Economics Papers: this item is included in nep-hme and nep-mfd
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