'Islamic microfinance an effective tool of financial inclusion'

Islamic finance is the best suited system for poverty alleviation that can be utilised both by Muslims and non-Muslims as an system to cut down poverty dilemma from all over the world, it can also be utilised as an effective tool of financial inclusion as millions of Muslims are financially excluded due to religious reasons, this was stated by Muhammad Zubair Mughal, Chief Executive Officer, AlHuda Centre of Islamic Banking and Economics (CIBE) Tuesday at a Sofitel Hotel in New York in logo inauguration ceremony of "4th Global Islamic Microfinance Forum" (GIMF).
The forum will be held on November 01-04 2014 in Dubai - UAE, jointly organized by AlHuda CIBE and Akhuwat. Delegates from Islamic banking, financial industry, Islamic microfinance, and multilateral organisations and from more than 30 countries will be participation in this mega event.
He further said that Islamic microfinance has more characteristics than conventional microfinance and for this important factor it has gained popularity internationally. In recent studies, it is evident that the impact of Islamic microfinance in poverty alleviation is far more than general microfinance. There are two prominent reasons of gaining the success. One is its focus on investing on the assets to boost up the income level and business opportunities that can be very impact in elevating the living standards of the poor, to improve the business capacity, jobs availability, education and health opportunities.
The other important element is the availability of Islamic microfinance to all the levels of the poor. However, for the poorest of the poor, the options of Zakat, Ushr, and donation and for the chronic poor, the options of Qard e Hassna is available. Otherwise, for the ordinary level of poverty, Murabaha, Musharaka, Mudarba, Ijara are available with the option of 'Salam' for the poor villagers that is connected with Islamic agriculture.
On the other hand, when the poor people are elevated from the basic level of poverty, Micro Takaful is available to sustain them from going back to the down level. On the other hand, in general or conventional microfinance, there are unsuccessful efforts made for poverty alleviation from all levels of the poor through interest based microfinance.
He added that the process of poverty alleviation is a scientific and complicated process. Unless the level of the poverty is measured, we cannot pick the right products to alleviate it. Due to this factor in conventional microfinance, it is hard to uphill the poor from his own level of poverty.