Conventional microfinance, with its reliance on interest-based loans, excludes a significant portion of the global population who adhere to Islamic principles that prohibit the charging of interest. Sharia-compliant microfinance offers a powerful and ethical alternative, providing financial services that align with the core tenets of Islamic law, which emphasize risk-sharing, justice, and social responsibility. By replacing interest with asset-backed transactions and profit-and-loss sharing, Islamic microfinance institutions create a system that is not only religiously permissible but also fosters stronger partnerships and a more equitable distribution of wealth between the institution and its clients. This approach is rooted in the belief that money should be used to support productive economic activity and not as a commodity to be profited from on its own.

This course is designed to provide a comprehensive guide to the theory and practice of Sharia-compliant microfinance, from foundational principles to practical application. You will learn the key contracts and financial products that make Islamic microfinance a viable and sustainable model for poverty alleviation and economic empowerment. By exploring the operational models and unique risk management strategies of these institutions, you will be equipped to serve a new market of clients, diversify your institution's offerings, and contribute to a more inclusive and ethical financial system that benefits all members of the community, regardless of their religious beliefs.

Duration: 5 days

Target Audience:

• Microfinance institution (MFI) managers and executives
• Financial inclusion and development practitioners
• Islamic finance professionals and scholars
• Product designers and innovators in financial services
• Professionals in charge of field operations
• Risk management and compliance specialists
• Social entrepreneurs and startup founders
• Regulatory and policy advisors
• Students of Islamic economics and finance

Objectives:

• Master the core principles of Islamic microfinance.
• Understand the key differences between Islamic and conventional microfinance.
• Learn how to design and implement Sharia-compliant financial products.
• Grasp the complexities of risk-sharing models.
• Explore the role of social and ethical principles in business.
• Understand the legal and regulatory frameworks of Islamic microfinance.
• Learn how to build and manage a Sharia supervisory board.
• Understand the social and economic impact of Islamic microfinance.
• Analyze successful case studies from around the world.
• Develop a strategic plan for launching an Islamic microfinance program.

Module 1: Foundations of Islamic Finance

• An introduction to the principles of Islamic law (Sharia)
• The prohibition of interest (riba) and excessive uncertainty (gharar)
• The importance of risk-sharing and asset-backed financing
• The concept of social justice and ethical investment
• The role of Islamic finance in a modern economy

Module 2: Key Islamic Microfinance Products

• The mechanics of Murabaha (cost-plus sale)
• How Musharaka (partnership) and Mudarabah (profit-sharing) work
• The importance of Qard Hasan (benevolent loan)
• The role of Ijarah (leasing) in asset finance
• Understanding other contracts like Salam and Istisna'

Module 3: Operational Models and Design

• The difference in operational models from conventional MFIs
• How to structure the financing of tangible goods
• The importance of a clear and documented process
• The role of the loan officer as a facilitator
• Designing a product that is both Sharia-compliant and scalable

Module 4: Risk Management and Sharing

• Assessing and managing credit risk in a profit-sharing model
• The importance of a well-defined contract
• The role of the institution in sharing the risk of a business venture
• Strategies for mitigating operational and market risks
• The link between risk sharing and ethical practice

Module 5: Social and Ethical Dimensions

• The role of Zakat (charitable giving) and Waqf (endowments)
• How Islamic microfinance contributes to social justice
• The importance of ethical business practices
• The role of financial literacy from an Islamic perspective
• The holistic approach to client well-being

Module 6: Governance and Compliance

• The role and structure of a Sharia supervisory board
• The process of ensuring Sharia compliance in all operations
• The importance of transparency and accountability
• Navigating the dual-regulation of financial and religious laws
• Case studies of governance failures and successes

Module 7: Technology and Innovation

• The role of digital platforms in reaching underserved populations
• Using mobile money for Murabaha and Ijarah transactions
• The potential of blockchain for smart contracts
• The importance of a secure and compliant digital system
• New trends in Islamic fintech

Module 8: Performance and Impact Measurement

• Defining and measuring success beyond profitability
• The importance of social and ethical metrics
• How to track the impact on poverty alleviation
• The link between Islamic principles and development outcomes
• Using data to improve program design

Module 9: The Global Landscape

• The key players and institutions in Islamic microfinance
• A comparative analysis of different countries and models
• The challenges of standardization and scaling
• The potential for growth in new markets
• Lessons learned from the field

Module 10: Strategic Planning

• How to conduct a feasibility study for an Islamic microfinance program
• The importance of market research and client needs assessment
• Developing a business plan that is both profitable and ethical
• The role of capital raising and investment
• A step-by-step guide to launching a program

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 7 working days before commencement of the training.