Microfinance-providing affordable financial services to the poor- has been identified as an important tool in increasing\nthe productivity of the poor and in enhancing economic development. Although conventional microfinance products have\nbeen very successful in Muslim countries the traditional microfinance contract which involves the payment of interest\n(riba) is strictly prohibited with the principles set forth in the Sharia of Islam. Sharia-compliant microfinance is one among\nmany interventions designed to bring poor people into the formal financial mainstream. Islamic microfinance leaders\nhave taken the initiatives to meet the increasing needs of the poor Muslim customers with the aim of alleviating poverty\namong poor Muslim people. While conventional microfinance institutions (MFIs) have expanded their operations in the\nlast two decades, Islamic microfinance products are still quite small relative to the conventional microfinance sector.\nSudan emerges as the most prominent market for Islamic banking in terms of number of Islamic banking providers. This\nis driven by the fact that the country requires full compliance with Sharia principles for the entire financial system. In this\nrespect, the aim of this paper is to shed light on Islamic microfinance in Sudan.
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