In the name of God, the compassionate the merciful
Islamic banking and finance is now touching the $3 trillion mark globally and has not shown any sign of slowing down. The 2021 Mastercard Index of Women Entrepreneurs (MIWE) has for the third consecutive year ranked Ghana as having 37.2% women business owners. Islamic banking may play a significant role in supporting and empowering women entrepreneurs in Ghana and beyond. It offers financial solutions that align with Islamic principles while addressing the unique needs and challenges faced by women entrepreneurs. Here are some very important ways Islamic banking can support women entrepreneurs:
Promoting Economic Empowerment: Women’s economic empowerment is a key focus in many Islamic and non-Islamic countries, especially Ghana. Islamic banking’s commitment to equity and social justice aligns with these goals. By providing women entrepreneurs with opportunities to access funding and build successful businesses, Islamic banking contributes to broader economic development and gender equality.
Tailor-made Solutions: Islamic banks often work closely with entrepreneurs to design financial solutions tailored to their specific needs. Women entrepreneurs may have unique business requirements and family responsibilities. Islamic banking can provide flexibility in structuring financial arrangements that accommodate these considerations.
Financial Inclusiveness: Islamic banking offers alternative financing options that do not involve interest (riba). This can be particularly beneficial for women who may have religious or ethical concerns about engaging in interest-based transactions and women who are being milked by the conventional banking interest regime. Through contracts like Mudarabah and Musharakah, women entrepreneurs can secure financing while sharing profits and risks with the bank or investors.
Equity Partnerships: Islamic financial contracts encourage partnership-based models, where the bank and the entrepreneur jointly invest in a business venture. This approach promotes a more equitable distribution of profits and losses, providing women entrepreneurs with a fair share of returns on their efforts.
Support for Ethical Businesses: Islamic banking encourages investments in businesses that align with ethical and social values. Women entrepreneurs who focus on ventures that are beneficial to society and adhere to Islamic principles can find support from Islamic financial institutions.
Asset-Backed Financing: Islamic finance emphasizes transactions backed by tangible assets or services. This can be advantageous for women entrepreneurs who might not have extensive credit history or collateral. Financing based on assets rather than creditworthiness can help overcome barriers to traditional financing.
Training and Capacity Building: Islamic banks can offer training and capacity-building programs targeted at women entrepreneurs. The Islamic Finance Research Institute Ghana (IFRIG) has already started playing this role, Alhamdulillah. These programs can help enhance business skills, financial literacy, and management capabilities, contributing to the success and sustainability of their ventures.
Entrepreneurship Ecosystem: Islamic banks can collaborate with organizations and government agencies to create a supportive ecosystem for women entrepreneurs. This includes offering networking opportunities, mentorship programs, and access to business resources.
Facilitating Technology Adoption: Islamic banks can facilitate the adoption of digital and fintech technologies that benefit women entrepreneurs. This can include providing online platforms for financial transactions, digital payment solutions, and e-commerce support.
Inspiration and Role Models: Islamic banking’s support for women entrepreneurs can serve as an inspiration and encouragement for other women to pursue their business aspirations. Successful women-led businesses can become role models within their communities.
In a nutshell, Islamic banking’s principles of ethical finance, equitable partnerships, and social responsibility can contribute to creating an environment where Ghanaian women entrepreneurs are empowered to thrive and contribute to economic growth and development in Ghana and beyond. All praise is due to Allah, in whose favor GOOD DEEDS are accomplished. (Bn Majah: 3803). And Allah knows best!
YAHAYA ILIASU MUSTAPHA
The writer is an Islamic Banking and Finance patron and advocate in Ghana.
Email: yahaya0246873726@gmail.com
Facebook account: facebook.om/Yahaya.iliasu.94
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