The operational and functional differences between the Islamic microfinance institutions IMFIs. and the conventional microfinance institutions justify making a case for the consideration of the IMFIs as alternative microfinance institutional model.

Question

Quizplus · Accepted Answer

Islamic microfinance institutions (IMFIs) operate based on Islamic finance principles, which prohibit interest (Riba) and emphasize ethical and socially responsible investments. This contrasts with conventional microfinance institutions that use interest-based models. The unique approach of IMFIs, focusing on profit and loss sharing and asset-backed financing, caters to clients seeking financial services aligned with Islamic law, thus justifying their consideration as an alternative microfinance model.

The Operational and Functional Differences Between the Islamic Microfinance Institutions