9th IFSB Summit: Speakers at Pre-Summit Special Session Deliberate on the Development and Challenges for Islamic Microfinance
Istanbul, 15 May 2012 – Islamic microfinance is a viable proportion for promoting financial inclusion by providing the Shari’ah compliant financial services to the low income segments of society, though formidable challenges are still there. This agreement was made by the speakers at the “Special Session on Promoting Financial Inclusion through Islamic Microfinance” that was organized by the Islamic Financial Services Board (IFSB) as a pre-event to the 9th IFSB Summit hosted by the Central Bank of the Republic of Turkey. The 2-day IFSB Summit will commence from tomorrow in Istanbul, Turkey. The Special Session was chaired by H.E. Yaseen Anwar, Governor, State Bank of Pakistan.
The distinguished speakers – which included representatives from Islamic development Bank- IRTI, the World Bank, central banks of Bangladesh, Sudan and Indonesia as well as GIZ, Germany – noted a significant progress in the availability of Islamic finance in various jurisdictions. The speakers were unanimous in their observation that Shari’āh compliant microfinance products and services have several intrinsic strengths which can provide the outreach to the faith-sensitive clientele, which were otherwise not having access to financial services. The resultant financial inclusion can help reduce poverty, enhance job-creation and increase domestic savings in the jurisdiction. It also leads to social, economic and political stability in the countries which is an essential pre-requirement for sustainable economic growth.
Despite being upbeat on the potential of the growth of Islamic microfinance, the speakers underlined various key challenges and initiatives required for the further development of this sector. One speaker highlighted that whereas one third of the poor globally are Muslims; Islamic microfinance represents less than 1% of global microfinance sector. The key challenges accentuated by the speakers and panelists included, among others, the need for product diversification, availability of micro-Takāful and effective regulatory and infrastructural support. The importance of reverse linkages programme was also emphasised by speakers whereby the best practices and successful experiments in this important area in one jurisdiction can be replication in other places. It was also stressed that effective use of technology through branchless banking and mobile phones can facilitate providing financial services to the underprivileged sections of society. The Islamic microfinance programmes are also need to be supported by adequate training and education to the entrepreneurs as well as policy makers, regulators and other stakeholders to enhance financial literacy and ensure sustainability of such initiatives.
The Special Session was preceded by the Country Showcases by Turkey and Malaysia. The speakers in these Showcases highlighted various key legal, regulatory and other key initiatives for the development of various sectors of Islamic financial services industry in their jurisdictions.
For more details on the 9th IFSB Summit and pre-Summit events, please visit www.ifsbistanbul2012.com or email [email protected]
