Fact Sheet 7: Microlending in an Islamic Environment

This fact sheet provides a brief introduction to the microfinance situation in Palestine, an area with a Muslim population of over 95%. It discusses the benefits of blending modern microfinance best practice techniques with the principles of Islamic finance to help expand program outreach. The fact sheet is beneficial to microlenders who could offer products designed specifically to accommodate the needs of the communities they serve.

This fact sheet also stresses that Islamic Finance and microlending are compatible. Other observations are:

• Goals of poverty alleviation and economic advancement for distressed communities are common goals for both modern microfinance programs and Islamic religious law;
• Credit and savings products can be offered to microentrepreneurs by incorporating mechanisms sanctioned by the Islamic financial system.

The fact sheet also provides definitions and a summary of the Islamic financing techniques that are being applied to microfinance operations in the Gaza Strip and West Bank area in Palestine.