Mission

We believe in making microfinance investments in communities where over time the MFI is transformed into a community-owned organization. Our model will also provide for self-sustaining expansion of equity-based microfinance that appeals to people of all faiths.

Vision

We believe that equity-based microfinance will be more effective than the current debt-based microfinancing. Conventional MFIs provide lessons on risk management, corporate governance and the use of group lending. Using these lessons will allow us to move rapidly towards sustainability and profitability.

About the Project

The Institute of Halal Investing is developing an equity-based model of microfinance. Our model is based on the restrictions on economic conduct under Shari'ah (Islamic) law and uses products commonly used by Islamic banks. Although the products are Shari'ah based (and we believe they will be widely seen as halal), we recognize the importance of operating the microfinance institution in a way that will be inclusive towards people of all faiths & ethnicities.

We fundamentally believe that an equity-based microfinance model will serve as an alternative method for mobilizing the poor to generate self- sustaining businesses which will allow them to support themselves and their families. We believe that our model will provide the most successful method for "graduating" microfinance clients into the mainstream financial system.

As we develop products, the One Ummah Foundation, a non-profit charity, will operate a pilot study of the products through its partner organizations in Sri Lanka, Al Muslimaath and Baithul Khair Foundation. Upon completion of the pilot study, we plan on launching a full-scale microfinance institution (MFI) organized as a cooperative microfinance institution in Sri Lanka called Equitable MFI. We believe the microfinance institution will be self-sustainable within a short time and will be able to generate enough profits to fund expansion within Sri Lanka and eventually across the world.

The products we are currently developing are:

  • Cost-plus deferred sale (based on murabaha) Venture Capital-style investment (based on mudaraba)
  • Joint venture (based on musharaka)

The products we plan to develop in the future are:

  • Savings account (based on qard hasan)
  • Investment account (investments in the MFI based on mudaraba)

We have prepared a one-page summary (pdf) of the microfinance program and more details will be released as they are completed. Comments on our microfinance program are always welcome and should be directed to info@halalmicrofinance.org