The Islamic approach to micro-finance is providing the world’s poorest people with a real and lasting route out of poverty. Islamic Relief currently provides Islamic micro-finance in over a dozen countries, with China being the most recent to benefit.
Financial services for poor families
Most of the world’s poorest people are unable to access financial services, such as loans, that would help them earn a living for themselves and their families. Without securities or guarantors demanded by banks, many are vulnerable to exploitation by loan sharks and can be driven further into poverty with interest-charges.
For over 15 years, Islamic Relief has been providing a much-needed lifeline with its ethical finance programmes. The Shariah-compliant small loans available through the programmes are interest-free, and Islamic Relief shares in the risk and profit. This means that the loan doesn’t have to be paid back if the beneficiary has difficulty doing so, and profits support the scheme so others can benefit.
Transforming lives in China
The under-developed eastern Gansu Province, China, is one of the latest places to benefit from access to our Islamic micro-credit scheme – which aims to reduce poverty and promote sustainable rural livelihoods. Here, we are investing in income generation activities, promoting rural enterprise and improving the skills of farmers so they increase their income.
Already, 266 families have accessed the programme, including that of Ma Wenhua, who lives in the mountainous Xiyang Township. People in his community suffer from poor living conditions, little cultivated land, and low income.
“There is much dry land,” said Ma, “There’s not much income to get from arable land here.”
Ma’s family of six were loaned a beef cow, providing an income through breeding, supported by our animal husbandry training. A calf is worth 5000 yuan (£502).
Ma said, “The calf will be sold, and the loan cow will be fattened till the market situation improves. If the market trend is good, I will sell it. If not, I will keep it and breed more calves.”
Ma Wenhua, Xiyang Township, Pingliang city, China
Islamic Relief sees its micro-finance programme as an innovative and sustainable solution to reducing poverty, as part of an integrated approach to development.