The Rise of Microfinance in the Middle East

Abstract

The present study explores the rise of microfinance in the Middle East. The study investigates more regarding microfinance institutions, economic development, and direct and indirect benefits linked with microfinance institutions. The research examines how states use microfinances are to reduce poverty and support solutions that improve reconciliations. Banking institutions often treat low-income individuals and SMEs harshly. They restrict financial help, as they fear losing money loaned due to lack reliable source of income to repay the loan debt or collateral. Consequently, microfinancing institutions exploits this by offering these individuals and SMES microcredit and microloans solutions. The present study employed secondary sources for data collection aligned with the research topic and specific objectives. . The selection criteria for the secondary sources include qualitative research papers investigating if Microfinancing exists and the potential opportunities for Middle Eastern countries where access to finance and capital markets are limited. The findings suggest that Microfinancing is present in the Middle East, but significant barriers exist restricting the industry's growth. Thus, the findings underline the need to remove these barriers for the microfinancing sector to reach the same levels as other global parts, particularly developed economies. Microfinancing institutions across the Middle East are predominantly not-for-profit due to their lack of incentives to transform into for-profit organisations.