A Proposed Regulatory Framework for Islamic Microfinance: Adopting the IFSA 2013 Approach

Abstract

For an accurate implementation of Islamic microfinance, there needs to be a true understanding of the terms ‘Islamic’ and ‘microfinance’. Unlike conventional microfinance, Islamic microfinance is based on the underlying tenets of Islam which define its functions and operations. While both conventional and Islamic microfinance are guided by the principles of microfinance, Islamic microfinance has the added dimension of compliance with the Sharīʿah (Islamic law) when defining its activities.