Developing Entrepreneurship Thorough Islamic Microfinance: An Emperical Study on the Gear

Abstract

Modern economists claim that fostering financing inclusion through microcredit and micro-financial institutions have great potential to improve the well-being of financial marginalized and destitute stratum of society. But, in Pakistan where the majority of the population adheres to Islam as their code of life, many are reluctant to impart the conventional microfinance institutes on the religious grounds. The paper argues that Islamic alternatives can replace interest-based institutions with equity-based products and participatory financing to develop entrepreneural opportunites, social transform, and hence economic development. It highlights the significance and comparative advantages of Islamic finance over conventional and claims that Islamic finance is a holistic, viable and dynamic approach for achieving the greater goals of development. Furthermore, the paper makes an empirical study of the operations of GEAR, an Islamic philanthrophic organization and reveals that Islamic microfinancial institutions can significantly contribute in ability and capacity building of the financial excluded and marginalized peoplethrough their specialized modes of participatory financing.