Designing a New Model of Islamic Micro-Financing in Iranian Banking System (Based on Mandate, Qarz al-Hasan and Murabaha Contract)

Document Type : Science - Research (Islamic Financing Tools)

Authors
Wahab Qelich 1
Mandana Taheri 2
1 Assistant Professor, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran
2  Assistant Professor, Allameh Tabatabaei University, Tehran, Iran
10.30497/ifr.2021.240367.1598
Abstract
In recent decades, micro-financing institution has been proposed in many countries as a suitable solution for increasing entrepreneurship and job creation and improving the welfare of poor and moderate households. Due to the deficiency of microfinance instruments appropriate for low and average income groups of the society in the Iranian banking system, the targeted provision of these services has failed to achieve its goals. Hence, it is necessary to design new methods for financing these social groups, so that while efficient, they keep in line with the goals and functions of Iranian banking. This paper has designed and presented a new model for microfinance in the Iranian banking system by using a descriptive- exploratory method and experts' points of view. The proposed model is based on attracting deposits through special contract of mandate and payment of facilities using Qarz al-Hasan and Murabaha contracts with the aim of financing the weak and middle classes of the society.
Keywords
Microfinance
Islamic Finance
Murabaha Contract
Advocacy Contract
Qarz al-Hasan Contract

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  • Receive Date 24 January 2021
  • Revise Date 09 August 2021
  • Accept Date 10 August 2021