Setting the Future Research
Agenda for Islamic microfinance:
Establishing the Evidence Base
for Impact and Sustainability
Dr Mohammed Kroessin
Global Microfinance Advisor
ISLAMIC RELIEF WORLDWIDE
Islamic microfinance research
Agenda
• Why research?
• An emerging research agenda
• How can IMFIs drive research?
• The way forward
Islamic microfinance research
Why research?
- What is research?
- Academic / IF fiqh
- Market research
- R&D / product development
- Knowledge generation
- Pure knowledge: academia
- Applied knowledge: product development
Islamic microfinance research
An emerging research agenda
• What do we know:
– I-MF in academia: very little interest in I-MF
(Habib Ahmed)
– I-MF R&D: some internal product
development & innovation (GrameenJameel etc.)
– I-MF market research: slowly emerging
(IRTI, Kuwait Finance House, CGAP etc.)
Islamic microfinance research
An emerging research agenda
• Knowledge gaps (what don’t we
know)
Sustainability
Outreach / impact
Islamic microfinance research
An emerging research agenda
• Significance of knowledge gaps:
“Sustainability”
Islamic microfinance research
An emerging research agenda
• Significance of knowledge gaps:
“Sustainability in the I-MF context”
– Social
• non exploitative financing modes
• Ethical vs. Sharia complaint
– Environmental
• Renewable resources (energy, raw materials, pollution)
– Economic
• Financial viability
Islamic microfinance research
An emerging research agenda
• Research questions about
“Sustainability”
– Uptake of I-MF (0.5% of global MF is
Shari’ah compliant, CGAP survey 2008)
• Economic behaviour of clients
• Socio-political analysis
• Effectiveness of marketing strategies
Islamic microfinance research
An emerging research agenda
• Significance of knowledge gaps I:
Impact/Outreach
– I-MF still relatively small (IBBL RDS in
Bangladesh 500k clients)
– Business models not easily scalable
– Outreach: depth vs. breadth
– Impact
Islamic microfinance research
An emerging research agenda
• Significance of knowledge gaps II:
Impact/Outreach
– Evidence for social impact vs. rhetoric
“In the development NGO sector internationally
there has be an increasing recognition of the
weakness of institutional learning and
accountability and a growing gap between the
rhetoric of agencies and the reality of what they
achieve” (IMP-ACT).
Islamic microfinance research
An emerging research agenda
• Research questions:
Impact/Outreach
– What is the impact of I-MF products that are in economic
terms very similar to conventional products (i.e. Murabaha,
Qard Hassan with 15% mark-up/fee as compared to
conventional MF with 15% interest)?
– How can we measure the impact especially of the salient
features of I-MF, i.e. equitable financing?
– How can I-MF make a difference in particular contexts, i.e.
Is asset-based financing or P/L better mitigating against
external economic shocks etc?
Islamic microfinance research
How can I-MFIs drive research?
• building partnerships with academia
– privileged access to data
– encourage research
– engage in critical debate
Islamic microfinance research
How can IMFIs drive research?
Case study: El Shaarani Centre for Islamic
Business and Finance partnership with IR
- At Aston Business School, Birmingham:
- Shared research agenda
- Looking for a market niche
- Looking to be relevant to industry and society
(Research Assessment Exercise)
- Research on client behaviour (marketing) and
comparative impact assessment
Islamic microfinance research
The way forward
-consortium-based research allows smaller
I-MFIs to contribute by pooling resources
-Global players (e.g. IRTI, WCMP) to take
lead on global issues
- bridge competitive ‘industry’
-conceptualise and operationalise research
- knowledge exchange
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