Islamic Microfinance in India: An Overview

Poverty eradication in Islam is a cherished goal and microfinance is the best way for Muslim organizations to practice it, considering the economic condition of the community in India. Islamic Microfinance Institutes (IMIs) should be established in every economically weak Muslim locality so that the poor Muslims could easily get financial services to meet their basic needs and develop a habit of saving which is quite absent from the culture of wage earners. The Islamic Microfinance for poverty alleviation is more inclusive than Conventional Microfinance because it minimizes the dependency on charity and facilitates the benefits to flow to the poorest of the poor and the destitute, which are not in a position to generate any income and wealth from the present day interest-ridden formal financial institutions. In this paper an attempt has been made to review the concept of Islamic Microfinance system and its present and future in India.