28.11.2013 - The Islamic Development Bank (IDB), the Consultative Group to Assist the Poor (CGAP), the Al Baraka Banking Group, and the Triple Jump, an investment management company in Amsterdam, have announced the launch of the 2nd Islamic Microfinance Challenge, a global contest that aims to promote the reach of Shari’ah-compliant Islamic microfinance providers among the people. This year’s contest, for which the promoters of the Challenge have invited application from institutions and
companies working in this field, is entitled, “Islamic Microfinance Challenge 2013: Beyond Murabaha.” The first Islamic Microfinance Challenge, held in 2010, was won by Yemen’s Al Amal Bank.

Dr. Abdul Aziz Al Hinai, IDB Vice President (Finance) stated on the occasion that development of the Islamic microfinance sector is a high priority for the IDB. He reiterated that “the noble vision of Islamic finance would not be complete without simultaneously developing Islamic microfinance, ensuring financial inclusion of the deserving segments, generating jobs and alleviating poverty”.

Through a US$ 100,000 grant award and a video documentation sponsored by the German development agency GIZ, the Islamic Microfinance Challenge hopes not only to spur innovation, but also to help scale up application of Shari’ah-compliant products by financial institutions already serving large numbers of the poor.

According to reports, the number of Shari’ah-compliant microfinance providers has nearly doubled in recent years, and their outreach quadrupled. However, this outreach of just over one million is relatively small compared to the estimated 650 million Muslims living on less than US$ 2 a day. This, in part, explains why this year’s Challenge is inviting applications exclusively from Islamic financial services providers with a track record of reaching clients and existing Shari’ah-compliant
products that they hope to take to scale.

More information about the Challenge as well as a downloadable application can be obtained by visiting the website at http://www.cgap.org/news/islamic-microfinance-challenge-2013 or by emailing islamicmfchallenge@cgap.org. Applications will be accepted through January 31, 2014. Enquiries on IDB’s role in development of Islamic Finance/Microfinance may be sent to Haseeb Siddiqui (hsiddiqui@isdb.org) and/or Wasim A. Abdulwahab (wabdulwa@isdb.org) at IDB’s Islamic Financial Services Dept.