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Allah and Micro-Finance? Investigating Islamic Banking Principles in Indonesia’s Microfinance Sector, and its Potential for Economic Empowerment

Poverty is widely conceived to be the largest moral and economic challenge of this century, and thus it comes as no surprise that the first Millennium Development Goal attempts to tackle the issue of poverty eradication. One increasingly significant instrument of poverty alleviation and community development is that of microcredit and microsavings, popularized by Professor Muhammed Yunus and the Grameen Bank.

However in Indonesia alone over half of the national population live on -or under- a mere US 2% daily.The successful establishment of microfinance institutions in the Muslim world could prove to be a valuable asset in the fight against poverty. However, an additional obstacle is posed by Islamic shariah which challenges conventional banking principles, mandating and promoting its own Islamic banking principles instead.

In this paper, the main question that will be addressed is whether the application of Islamic banking principles to microfinance in Indonesia has been more beneficial in promoting economic growth among the Muslim poor than conventional microfinance practices. And further, what this application can imply for the rest of the Muslim world.

Author:Amina Samy


HD PDF NewAllah and Micro-Finance? Investigating Islamic Banking Principles in Indonesia's Microfinance Sector, and its Potential for Economic Empowerment (555)

Can Zardari uphold Pakistani Democracy?

On Tuesday 9th September 2008 Asif Ali Zardari the husband of the former two times Prime Minister the late Benazir Bhutto was sworn in as President of Pakistan. In a special article for Hii Dunia Faisal Hanif asseses Zardari’s past and asks if Pakistan’s first democractic leader this century is fit and able enough to guide this most fragile of democracies through possibly its most difficult of days.

Burnt Out Borneo

One of our nearest biological relatives, the Orang-utan, is facing extinction because of deforestation taking place to make way for palm oil plantations. Recent Greenpeace analysis and investigations confirm that expansion in these plantations is having a serious impact on the Orang-utans habitat.


Kate Leslie investigates how palm oil concessions are destroying the Orang-utans habitat and causing climate change.

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