Non - bank Financial Intermediation 215
in the same regions. Total Islamic microfi nance outreach is estimated at
380,000 customers worldwide (Karim et al. 2008).
There is a growing realization that Islamic microfi nance is essential for
those Muslim countries where increasing numbers of the community are
suffering from poverty and are in dire need of access to low - cost fi nanc-
ing. Much needs to be done and efforts are required to promote Shari’ah -
compliant microfi nance in both public and private sectors. Keeping this
in mind, the Islamic Development Bank (IDB) recommends several steps
at micro, meso , and macro levels to further promote Shari’ah - compliant
microfi nance (see box).
Banking the non - bankable was the idea behind the establishment of
microfi nance institutions. However, over the years, conventional microfi -
nance based on the Grameen model has witnessed a paradigm shift. For
years, the concept of microfi nance was considered a domain for NGOs but,
given its success rate, the private sector is now viewing this as purely a com-
mercial proposition and an opportunity to introduce a market - based solu-
tion. This should be encouraging for Islamic banks and fi nancial institutions
to consider this as an untapped market and to introduce fi nancial products
geared specifi cally for this segment.
RECOMMENDED ISDB INTERVENTION IN PROMOTING
ISLAMIC MICROFINANCEAt a micro level■ (^) Participate in equity of Islamic fi nancial institutions with a view to
creating specialized MF Divisions
■ (^) Create specifi c funds to support various qard - ul - hassan - based
microfi nance institutions across the globe
■ (^) Create a refi nance facility to act as a wholesaler of Islamic microfi -
nance products for a chain of Islamic and conventional microfi nance
retailers
■ (^) Participate in equity of commercial takaful companies with a
view to developing micro - takaful products and services; also of
re - takaful companies (discussed later)
■ (^) Design a credit - guarantee scheme for Islamic microfi nance pro-
viders
■ (^) Promote dialogue among Shari’ah scholars for collective resolu-
tion of fi qhi issues related to microfi nance
(Continued)