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Deadweight loss in the interest-based and the interest-free (Islamic) microfinance programs :
Author
Source
International Journal of Islamic Economics and Finance Studies
Issue
Vol. 5, Issue 2 (31 Jul. 2019), pp.49-71, 23 p.
Publisher
Centre of Political Economical and Social Research
Publication Date
2019-07-31
Country of Publication
Turkey
No. of Pages
23
Main Subjects
Abstract EN
This paper illustrates the deadweight loss in the interest-based Microfinance program compared to the interest-free or Islamic Microfinance program in terms of ‘consumer’ surplus, producer’ surplus, loan price and the quantity demanded of the Microfinance loan.
This article analyzes the secondary data on twenty Microfinance institutions of the nine countries of the world, and world microfinance data.
Deadweight loss is demonstrated by using a numerical example and graphical presentation.
The findings expose that consumer’ surplus is at least three times higher, and producer’ surplus is also higher in the Islamic Microfinance than the interest-based Microfinance program.
In contrast the loan price is at least 142%-241% higher in interest-based Microfinance than the Islamic Microfinance.
Consequently, the quantity demanded of Microfinance loan is higher in the Islamic Microfinance than the interest-based Microfinance.
Finally this paper recommends for converting the interest-based Microfinance institution into the Islamic Microfinance institution to attain the wellbeing of microfinance member.
American Psychological Association (APA)
Bisharat, Husayn. 2019. Deadweight loss in the interest-based and the interest-free (Islamic) microfinance programs :. International Journal of Islamic Economics and Finance Studies،Vol. 5, no. 2, pp.49-71.
https://search.emarefa.net/detail/BIM-890605
Modern Language Association (MLA)
Bisharat, Husayn. Deadweight loss in the interest-based and the interest-free (Islamic) microfinance programs :. International Journal of Islamic Economics and Finance Studies Vol. 5, no. 2 (Jul. 2019), pp.49-71.
https://search.emarefa.net/detail/BIM-890605
American Medical Association (AMA)
Bisharat, Husayn. Deadweight loss in the interest-based and the interest-free (Islamic) microfinance programs :. International Journal of Islamic Economics and Finance Studies. 2019. Vol. 5, no. 2, pp.49-71.
https://search.emarefa.net/detail/BIM-890605
Data Type
Journal Articles
Language
English
Notes
Includes appendices : p. 71
Record ID
BIM-890605