Short-term relief like food parcels may help momentarily, but long-lasting change comes from empowering individuals to become self-reliant. Islamic microfinance plays a vital role in this process by offering Sharia-compliant financial services that help individuals escape poverty through business development and job creation. These financial tools enable the poor to start or expand their businesses, improve their standard of living, and contribute to broader community development.
Unlike conventional finance models, Islamic microfinance operates on profit-and-loss sharing principles and strictly avoids interest (riba). It also prohibits investments in unethical or speculative sectors such as the stock market, black-market operations, or other illegal activities. The system aims to benefit the entire Ummah and ensures that investments support lawful and ethical ventures.
The primary investment methods under the Islamic Finance Project include:
Musharaq or Shirak
Mudaraba
Bai Murabaha
Bai Muazzal
Bai Salam
Leasing
Ijara/Baiiah or Hire Purchase
Hyper Purchase under Shirkatul Milk
Investment Auction
Karz Hasana