The following is taken from a press release from the AlHuda Centre of Islamic Banking and Economics:
Erbil, Iraq, April 13, 2012 - The UNDP in collaboration with USAID and CGAP jointly organized the Iraq Microfinance Policy Forum on April 10-11, 2012 in Erbil, Iraq to develop policy goals for microfinance in Iraq. Senior government officials from the Government of Iraq—including advisors to the Prime Minister, Central Bank in Iraq, USAID, ILO, UNOPS, CGAP, and UNHABITAT representatives all participated in the Forum. Representatives from Yemen, Jordan, India, Italy, Poland, UAE, Syria, and many other many countries also participated in the conference. Muhammad Zubair Mughal—Chief Executive Officer of AlHuda Centre of Islamic Banking and Economics (AlHuda-CIBE) —presented his paper, “Microfinance Policy in Asia and the Increasing Trend of Islamic Microfinance,” as one of the experts at the Forum.
Zubair Mughal presented a detailed analysis of poverty in 52 Asian countries with their techniques and strategies in poverty alleviation, legal and regulatory reforms, Minimum Investable Funds limits, interest rates, and other improvements efforts in microfinance sectors. While declaring the poverty analysis of these countries he reported that, despite the presence of oil and other minerals in these countries, the percentages of people living below the poverty line are 22.9% in Iraq, 18% in Iran, 34.8% in Yemen, 13.3% in Jordan, 12.5% in UAE, 28% in Lebanon, and 11.9% in Syria. Even more worrying is that 96% of the population in these countries is Muslim and so they avoid the conventional system of microfinance as it is based on ‘Riba’ (interest). Zubair Mughal stated that one solution to alleviating poverty in these countries is to adopt Islamic microfinance systems. These countries can expand development by adopting the microfinance strategies that follow the Islamic Shariah. Yemen, Iraq, and Syria have already undertaken a start and this will create room for more Islamic microfinance institutions to be set up in these countries.
He further emphasized the need for research by the IFC, CGAP, USAID, Frankfurt School, and FINCA on Islamic microfinance and the preferences of Muslim populations regarding Shariah-compliant and conventional microfinance. Zubair Mughal added that Islamic banking and finance has seen healthy growth in these Arab countries, which shows opportunity for Islamic microfinance to be successful. AlHuda-CIBE has set up an Islamic Microfinance Helpdesk in order to strengthen Islamic microfinance globally. This helpdesk is providing state-of-the-art technical services, guidance, and trainings to many institutions around the world.
At the end of the conference, a roadmap on microfinance policy in Iraq was outlined so that effective efforts are made towards poverty alleviation in the war-torn country.