Islamic microfinance is a powerful tool for promoting development, particularly, women development and empowerment. According to the World Bank, 850,000 Ghanaians have been sadly pushed into poverty in 2022, and about 65% of them are women. It’s important to note that there are numerous organizations and initiatives, both governmental and non-governmental, working to address economic challenges facing women in Ghana, sub-Saharan Africa, and the world at large. Some of the challenges include the wide gender pay gap, lack of access to education, land, and property ownership situations, lack of access to financial services, lack of access to health care, lack of access to entrepreneurship training, etc.
A tailor-made Islamic Microfinance geared toward the empowerment of women may do the magic by reversing these situations to enable women to contribute meaningfully to their families and society at large. The following may be considered by policymakers and non-governmental organizations. And Allah knows best.
Financial Inclusion: Islamic microfinance institutions often prioritize reaching marginalized and underserved populations, including women. This helps women access financial services that were previously unavailable to them.
Interest-Free Loans: Islamic microfinance typically operates without charging interest, which aligns with Islamic principles. This makes it more accessible and culturally acceptable for women who may prefer not to engage in interest-based transactions.
Entrepreneurship Support: Islamic microfinance institutions offer small, Sharia-compliant loans to women entrepreneurs, allowing them to start or expand businesses. This can lead to economic self-sufficiency and greater financial independence for women since such loans have no interest burdens on them.
Asset Ownership: Islamic microfinance often focuses on asset-backed financing. This means women can use tangible assets as collateral for loans, providing a sense of security and empowerment.
Profit-and-Loss Sharing: Some Islamic microfinance models such as Mudarabah and Musharakah involve profit-and-loss sharing agreements. This means that women borrowers share in the profits (or losses) generated by their business activities, offering them a stake in their ventures’ success.
Skill Development: Besides financial support, Islamic microfinance institutions may provide training and capacity-building programs that equip women with essential skills for managing businesses and finances effectively.
Community Development: Islamic microfinance often emphasizes the social and ethical aspects of finance. By supporting women’s economic activities, it contributes to community development and poverty reduction.
Women-Centric Products: Some institutions offer microfinance products specifically designed for women, recognizing their unique needs and circumstances. These products may include savings accounts, insurance, and financial education tailored to women.
Social Empowerment: As women become economically empowered through Islamic microfinance, they often gain more influence in their households and communities, leading to positive social changes.
In a nutshell, Islamic microfinance can be a powerful force for women’s development and empowerment, offering them the financial tools and resources they need to improve their quality of life, support their families, and play an active role in their communities. Remember that the first human being to accept Islam is a woman, Naana Khadija, the wife of our beloved prophet (SAW). She was also the first person to support his course (propagation of Tawheed). This means that women have played a major role in the spread of Islam, and empowering women means empowering the grassroots. Praise be to Allah in whose favor good things are accomplished. 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
0506218343 / 0246873726
