Sharia Based Microfinance: A Non-Conventional Approach to Empower Indian MSME Sector

Management and Commerce

The policies associated with conventional banking system, indeed, accelerated the pace of coalescence of wealth in few hands. In such type of antagonistic and volatile environment, alternative microfinance would be a universal remedy for this prevailing evil. In fact, conventional microfinance approach has more or less same problems and challenges as those are faced by formal banking credit system. There is a need of alternative approach to overcome deficiencies of traditional and conventional approaches of microfinance. Alternative Approach is a Non-Conventional approach that is built upon moral, ethical and sustainable doctrine of business and premised on the principle of the welfare of all sections of society. All the activities those are unfair, unethical, and exploitative in nature for poor and underprivileged are prohibited under this approach. The main component of conventional approach is interest whereas the non-conventional approach is based on interest free concept and, profit and loss sharing practices in the proportionate way among respective stakeholder. Latter approach therefore would be a solution for draconian impact of former approach, especially, with regard to deprived and weaker sections of society.

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.