Regulatory framework for member-owned Islamic

Abstract EN

Member-owned Islamic microfinance institutions have been toast to be the alternative means of financial inclusion among the Muslims who are voluntary excluded from participating in the traditional member-owned microfinance institutions because of the interest they charge.

This novel idea is still new and few are known about its operations and regulations guiding its operation.

This paper surveys the practices of the common member owned Islamic microfinance in Sub-Saharan Africa with a view to recommend regulatory framework for its operation based on member practice.

This paper proposes a number of regulations for the operation of both Islamic Saving Group and Financial Cooperation.

It is hoped that these proposed regulations will assist the operator, policy makers and donor agencies to chat a way to improve the financial inclusiveness of poor people who are excluded from benefiting from the available member-owned microfinance institutions with a view to lift them out of poverty.