We submitted the paper we will present on April 18, 2008 at the pre-forum event before the 8th Annual Forum on Islamic Finance at Harvard University. It is titled "The Development and Implementation of Shari'ah-based Microfinance Using the Grameen Group Financing Methodology"

Abstract

The objective of this project is to develop and implement an Islamic microfinance model using the Grameen group financing approach initially using murabaha and musharaka contracts. Our model begins with providing clients in carefully self-selected groups with murabaha contracts before providing musharaka finance. The murabaha financing agreement includes fixed payments each period of repayment and therefore is easier to administer and can be used to screen out potentially problematic clients who are most likely to default. Those clients who are in groups with successful repayment of the murabaha finance will have a choice between murabaha and musharaka financing in the future. Finally, we report some preliminary results from our pilot study in Colombo and Bibile, Sri Lanka.