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see microcreditmicrocredit,
the extension to individuals of small loans to be used for income-generating activities that will improve the borrowers' living standards. The borrowers, most of whom usually are poor women, do not qualify for a conventional bank loan, and the loans, which may be as
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References in periodicals archive ?
The Islamic bank and financial institutions are, in this scenario, the financier/investor, or 'Rabul Mal,' and the IMFI acts as an investment manager, or 'Mudarib,' and IMFI does microfinancing as per Shari'ah principles and shares the profit with the investor, be that the Islamic bank or financial institution, as per the agreed ratio.
He said Islamic microfinance had the ability to be adopted with any microfinancing model of the world including village bank model, Garameen model, cooperatives and self-help model.
This results in high per-loan transaction costs and challenges in reaching sparsely populated areas where microfinancing is often needed the most.