ISLAMIC (MICRO)FINANCE

anthropological fieldwork enables complexity and nuance in institutional practice and user
experience to arise through a methodology of “participant-observation,” repeat minimallystructured
interviews, and relationship-building. This addresses methodological challenges in
microfinance research: banks, acting as gatekeepers, can (un)intentionally circumscribe access for
researchers. The need for the poor to ensure continued access to banks affects their responses to
market research and customer surveys. Male field researchers may face difficulty in eliciting
information about intimate familial or financial challenges from female microfinance clientele.
This report also offers historical and theological contextualization for present-day debates and
developments, overviews of commonly used Islamic (micro)finance products, and descriptions of
key countries and institutions in the global Islamic (micro)finance industries. Examinations of the
Islamic (micro)finance landscapes in Bangladesh, Indonesia, and Pakistan along with case studies
of Islamic microfinance programs in Bangladesh and Pakistan illustrate the variation in relevant
legal, political, economic, and geographic considerations. Ethnographic attention is given to the
unique challenges faced by female clients and female-headed households, implications of client
relationships with IMFI field officers, and the absence of tools for clients to address personal
accounting and calculation challenges.
Finally, there is a lack of relationships between Islamic microfinance and digital tools that could
easily promote product and platform innovation and aid service provision. The report offers
starting points for digital interventions to meet the needs of the poor while addressing
longstanding cost and value chain inefficiencies in Islamic (micro)finance. The Islamic
Development Bank is arguably the best-positioned institution to currently act as a research and
development hub for Islamic microfinance, shaping and testing new products and services,
optimal legal environments, and basic computing requirements. The scope for the collaboration is
high and the capacity
for innovation in this
still-nascent industry,
where supply has not
met demand, should
encourage impatient
optimism of industry
observers, providers,
and clients alike.
Main Road, field research
site, Chittagong Division,
Bangladesh, 2012
boats, as migrant workers abroad, or had abandoned their wives or died. (2) 2.5 months in Pakistan as a consultant
to Islamic Relief Worldwide, during which I evaluated their Islamic microfinance program, conducting interviews and
administering a survey for clients, staff, and other stakeholders. In both settings, I studied how Islamic microfinance
was taken up and embedded into clients’ everyday lives by tracking financial flows in and out of households, financial
management and accounting strategies, debt relationships, and value and monetary calculations.
2
ISLAMIC MICROFINANCE: CONTEXT, CULTURE, PROMISES, CHALLENGES | www.gatesfoundation.org