MICRO FINANCE - Microfinance and Young Indonesia

Microfinance is a hot topic in a number of developing countries. Unfortunately, over the last year, it has been in the news for all the wrong reasons.

For a start, Muhammad Yunus—the Nobel Prize-winning founder of Grameen Bank—has been pushed out of his job in Bangladesh. In India, the nation with the biggest microloans market, several borrowers committed suicide last year in the state of Andhra Pradesh because they were unable to make loan repayments. As a result of this debacle, India is introducing a slew of regulations and an interest rate cap to control the explosive growth of microcredit.

Indonesia, another developing country, is now facing rapid growth in its microfinance sector. Yet, despite the hit that the microfinance industry’s reputation has taken internationally, such financing might be exactly what the country needs. (full story - the diplomat)

PUBLICATIONS - ISRA - ARTICLE - A theory and contractual framework of Islamic micro-financial institutions ’ operations

A theory and contractual framework of Islamic micro-financial institutions ’ operations

Edib Smolo and Abdul Ghafar Ismail

ABSTRACT Microfinance is seen as a ‘ new paradigm ’ for bringing about development and eradicating poverty. Many studies prove that the provision of small amounts of credit to the poor is crucial in this new paradigm. However, these studies mainly focus on the conventional microfi nance institutions (MFIs) which have already existed for a couple of decades. Their role in helping the poor to achieve higher income and higher standards of living has been well recognized. Currently, there are quite a few MFIs that are operating based on Islamic principles. Although a few studies have been conducted on this subject, the literature lacks a comprehensive theoretical framework to describe the Islamic microfinance institutions (IMFIs). This article explores the contractual framework in modelling the IMFIs, on the one hand, and discusses the role of IMFIs via various modes of financing in providing capital to micro-enterprises, on the other.

Journal of Financial Services Marketing (2011) 15, 287 – 295. doi: 10.1057/fsm.2010.24

Downloadlink

ISLAMIC MICROFINANCE - BMT Tamzis Wonosobo assets growth to 70 %

Wonosobo, (22/11). Baitulmaal Waa Tanwil (BMT) Tamzis Wonosobo – Central Java should be the role model for other BMT’s, as it has a very good performance since it was established on July 22 1992. It assets has growth 70 % Deposits is now IDR 135 billion and financing is IDR 133 billion.

The Director of BMT Tamzis, Saad Suharto said that it has channeled its financing to 85% in trading, 10% in housing and 5% in farming activities.

FINANCE - Unlocking the Potential: Islamic Finance in the Philippines

“We have Muslim brothers who avail (financial) services but the way they avail (these loans) is against our culture, against our beliefs.” ~Muslim leader, Davao, Mindanao

Islam first reached the southern shores of the Philippines during the 14^th century and played a critical role in unifying kinship groups in several Filipino communities. With stronger networks of brotherhood and newfound Islamic faith, these communities were able to resist colonization by Spain and America for over 400 years, preserving their culture and religion. Today, though the majority of Muslim communities are concentrated in the southern portion of the Philippines archipelago, some reside in pockets throughout the islands; Filipino Muslims comprise approximately 5% (4.7 million) of the Filipino population (Roces, 2009).
Muslim clients review and sign loan disbursal documents during the cluster meeting. Photo courtesy of the CEVI Davao Branch.

MICROFINANCE - KUR - Govt considering 100 pct insurance for smallholder`s credits

Jakarta (ANTARA News) - The government is considering providing 100 percent insurance for smallholder credits (KUR) in order to assure issuing banks of their funds, a cabinet minister said.

MICRO FINANCE - Ministry has high hopes for sharia microfinancing

The government forecasts a rapid growth in assets managed by Indonesian sharia-based microfinancing institutions, or baitul maal wat tamwil (BMTs), on the back of rising public trust, a minister said.

MICROFINANCE - Businessman gives QR100m to set up micro bank

Doha: Businessman and investor Ibrahim Al Asmakh has donated QR100m to Qatar Charity to set up a micro-lending bank based on Shariah law for supporting poor and low-income segments of the society in Qatar and other Arab and Islamic countries.

Al Asmakh and Qatar Charity have signed an agreement in this respect. The proposed bank will help unemployed youth set up income-generating projects and undergo training, Al Asmakh said.

EVENTS - Seminar "Islamic Micro Finance Management"

Seminar "Islamic Micro Finance Management"

Jumat, 15 Oktober 2010 
oleh Webmaster. Dibaca 10 kali
Rangkaian Dies FE Unpad : Seminar "Islamic Micro Finance Management"
Ruang/ tempat : R.B1 pk 09.00 - 11.30
Pembicara : Perwakilan dari BI dan pimpinan Bank Syariah

BANKING - MICROFINANCE - Govt improving provision of microcredit loans to SMEs

The government is improving the provision for KUR microcredit as part of efforts to accelerate the disbursement of the targeted Rp 13.1 trillion (US$1.45 billion) this year, a senior minister said Thursday.

Coordinating Economic Minister Hatta Rajasa said better microcredit provision, both in terms of credit ceilings and financing schemes, had been adopted by government to accelerate the disbursement of microcredit loans for micro businesses.

BANKING - BSM Refused to Provide Financing Without Collateral

Jakarta (26/8) the new regulation of Kredit Usaha Rakyat  (KUR)/micro financing for the amount of IDR 20 million without collateral is not unanimously agreed by Islamic bankers. Bank  Syariah Mandiri (BSM) refused to facilitate financing without collateral, as explained by Andri Vendredi Subardi, head of micro-financing program of BSM, he said that the bank will be at high risk to distribute financing without collateral.

BANKING - In promoting Islamic banking transaction, Bank Muamalat joins force with UNJ

Jakarta, (03/09). In order to improve the competency of shariah human capital for our Islamic banking system, Bank Muamalat Indonesia (BMI) through its subsidiary Muamalat Institute is collaborating with Universitas Negeri Jakarta (UNJ) in conducting Islamic banking training Program.

Director of Bank Muamalat, Andi Buchari, during the signing of the Memorandum of Understanding (MOU), last Thursday, said that the synergy between the Islamic financial service and higher learning education is necessary to support the public education and improve the Islamic banking system.

“This is one of the reasons that we have collaborated with some of the universities including UNJ,”said Andi.

BANKING - BSM eyes on agricultural financing

JAKARTA: PT Bank Syariah Mandiri set eyes on small and micro financing in agricultural sector with financing target of IDR50 billion during QIV/2010.

Director Small and Micro Financing PT Bank Syariah Mandiri Hanawijaya said that the project will be started in September 2010 by targeting a group of farmers in Java and Sumatera also several spots in Kalimantan.

PUBLICATION - REPORT - BASEL releases final report on Microfinance Activities and Effective Supervision

BIS - The Bank for International Settlements issued a new report -

Microfinance activities and the Core Principles - Basel Committee issues final paper

The report can be of interest for anyone involved in Islamic microfinance. 

The report can be downloaded here : http://www.bis.org/publ/bcbs175.pdf?noframes=1 - Aug 31, 2010

PUBLICATION - REPORT - BASEL releases final report on Microfinance Activities and Effective Supervision

Aug 31, 2010: The Basel Committee on Banking Supervision has issued the final version of its paper entitled Microfinance activities and the Core Principles for Effective Banking Supervision that contains supervisory guidance for the application of the Basel Core Principles for Effective Banking Supervision (BCP) to microfinance activities, and the range of practices on regulating and supervising microfinance activities.