Eradicating Poverty through Salam and Istisn’a’ Strategy for Poverty Reduction in Rural Pakistan

Authors

  • Atiq-ur-Rehman Dr., Assistant Professor, Pakistan Institute of Development Economics
  • Asghar Shahzad Lecturer Department of Training, Shari’ah Academy, International Islamic University, (Faisal Masjid Campus) Islamabad.

Keywords:

Islamic Micro Finance, Salam, Istisn’a, MFI, Microfinance Intermediary

Abstract

The share of microfinance in the Islamic financial industry is very low and, therefore the industry contributes very little to the poverty reduction. This study proposes a microfinance model based on Salam and Istisn’a’. The proposed model is based on cooperative structure in which the MFI places production order against finance, and arranges marketing by itself. In this way, the producer does not need to be engaged in marketing which is not his specialty. In this way, the producer devotes all his energy for production, the efficiency of producer increase. This paper also proposes mechanism for vulnerable financing on the same concepts.

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Published

2017-06-01

Issue

Section

Research Articles