Value Through Diversity: Microfinance and Islamic Finance and Global Banking

This paper argues that many elements of microfinance could be considered consistent with the broader goals of Islamic banking. It states that:

• Global financial institutions are looking to diversify their financial markets;
• They are interested in microfinance and Islamic finance because of their high growth rates;
• Microfinance and Islamic finance can also add to the remittance businesses of international banks.

The paper discusses:

• The geopolitical situation that frames the interest of global banks in new modes of finance;
• The analogies between microfinance and Islamic banking:
• The gradual recognition by commercial banks of the potential of microfinance;
• The two-fold approach followed by commercial banks in their inclusion of microfinance;
• Microfinance programs run by various global banks;
• The convictions and features of Islamic banking;
• The operation of international banks in Islamic countries by opening subsidiaries devoted to Islamic banking;
• Microfinance and Islamic banking in Italy.

The paper concludes that:

• A pro-active approach towards diversity-related issues is becoming very important for the banking sector;
• The banking sector needs to adopt a policy tailored to include a diverse clientele;
• This trend has given rise to multi-cultural marketing;
• The banking sector has developed migrant banking facilities, offering products and services to migrants;
• A multi-cultural perspective requires an understanding of mental models within the organizational construct;
• This would lead to social cohesion and integration, with strong links between economics and culture.