Exploring the frontier in microfinance: faith-based and interfaith microfinance collaboration in conflict-affected environments

• Main Authors: Le, Long, Md Saad, Norma
• Format: Article
• Language: English
• Published: IIUM Press 2023
• Subjects: BPH72 Economic development. Growth. Sustainable development. Sustainability
• Online Access: http://irep.iium.edu.my/107185/1/107185_Exploring%20the%20frontier%20in%20microfinance.pdf; http://irep.iium.edu.my/107185/; https://journals.iium.edu.my/iiibf-journal/index.php/jif/article/view/745
• Institution: Universiti Islam Antarabangsa Malaysia

The impact of microfinance has been heterogeneous where variant microfinance programs have a greater impact in some countries and for some borrowers, but not much in other. In reviewing the industry from this view, stakeholders will find that faith-based microfinance organizations have the potential to be the ideal model to manage the pressures of both strict economic-system microfinance and social-impact targeting microfinance. That is, faith-based microfinance can and have learned to be effective in learning from other variant programs. If there is a frontier, it might be the ability of faith-based microfinance organizations to be a catalyst in providing ethical and egalitarian loans, as well as creating a base of reconciliation in conflict-affected environments. Moreover, in fragile and extreme poverty settings characterized by religious conflicts in North Africa and the Middle East, Christian-based and Islamic microfinance organizations appear to fall short in affecting substantial change. That is, they have not effectively associate development issues with local religious beliefs in which the invited community norm setters would buy into. Overall, the article explores and finds that collaboration between Islamic and Christian-based microfinance organizations might be crucial for not only enlarging funding from public and private sectors, but also improving cross-religious mechanisms to scale impact for their clients of different faiths or no faith.