Rural Finance and Investment Learning Centre

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Under  a  joint  initiative  of  the  Islamic  Development  Bank  Group  and  the World  Bank  Group,  the  inaugural  Global  Report on Islamic Finance has  been  prepared with a focus on the widening disparity of global wealth and how Islamic finance can  help  in  enhancing  shared  prosperity. 

This  Report  is  timely,  as  world  leaders  have  adopted  the  2030  Agenda  for  Sustainable Development, which includes a set of Sustainable Development Goals (SDGs) to end poverty, fight inequality and injustice, and tackle climate  change  by  2030.  The  Islamic  Development Bank Group, in its 2016–25 Strategic Plan, gives priority to inclusive and sustainable socioeconomic development among member countries within its role in advancing Islamic finance globally.

Besides imposing social and environmental costs, severe inequality adversely affects economic growth and wealth creation. The question that needs to be addressed is how to minimize the disparity in wealth and enhance shared prosperity. Given its potential role in economic development, Islamic finance can contribute toward achieving these objectives.

The Global Report provides a comprehensive overview of the existing status of various Islamic finance sectors and identifies major challenges hindering the growth of Islamic finance. It also identifies policy interventions and tools for policymakers to leverage the principles of Islamic finance in an effort to eradicate extreme poverty and work toward a more equitable distribution of wealth. The main message of the Report is that Islamic finance, built on a foundation of social and economic justice, can contribute to shared prosperity through the principles of inclusive participation and risk sharing.

Islamic Finance: A Catalyst for Shared Prosperity?  -  English (en)

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Income inequality has increased considerably in the aftermath of the financial crisis of 2007–08 to the extent that one percent of global population possess almost half of the global assets. Whereas the development community is unanimous to tackle growing inequality and imbalance in the distribution of wealth, there is a difference of opinion as to the approaches to achieve this goal. This report presents a perspective from Islamic finance on how shared prosperity can be enhanced. The theoretical framework for economic development by Islamic economics and finance is based on four fundamental pillars: (i) an institutional framework and public policy oriented to the development objectives of Islam; (ii) prudent governance and accountable leadership; (iii) promotion of the economic and financial system based on risk sharing; and (iv) financial and social inclusion for all, promoting development, growth, and shared prosperity. There is evidence that Islamic finance is experiencing high growth with the banking sector leading the way. Several countries are working seriously towards developing standards, regulation and legal frameworks for the development of Islamic finance. However, there are a number of aspects where policy interventions or improvements in policy effectiveness are needed to develop Islamic finance to promote shared prosperity. Without the enabling environment, Islamic finance may not be able to attain the potential expected of it. With adequate policy interventions and enabling financial infrastructure, Islamic finance could become a catalyst for alleviating poverty and inclusive prosperity. The key findings of the report include a need for sound regulatory framework for Islamic financial institutions due to the obvious differences from the conventional banks, harmonizing of Shariah standards and more discourse related to the underlying mechanism of Islamic financial products. Islamic capital markets both equity and Sukuk (Islamic bonds) are vital for the development of Islamic financial markets. Finally, instruments of Islamic social finance and redistribution could contribute further to enhance the shared prosperity.

Islamic Finance - A Catalyst for Shared Prosperity?  -  English (en)

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This staff discussion note represents an effort to take stock of the lessons learned in different areas of the development of islamic finance, and identifies policy issues that bear further consideration. Section II briefly explains the nature of Islamic finance. Section III presents the rationale for undertaking this work. Section IV discusses Islamic bank regulation and supervision, and related issues of financial stability and inclusion. The same issues are covered for Sukuk markets in Section V. Finally, Section VI discusses monetary, macroprudential, and tax policies.

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Islamic finance has started to grow in international finance across the globe, with some concentration in few countries. Nearly 20 percent annual growth of Islamic finance in recent years seems to point to its resilience and broad appeal, partly owing to principles that govern Islamic financial activities, including equity, participation, and ownership. In theory, Islamic finance is resilient to shocks because of its emphasis on risk sharing, limits on excessive risk taking, and strong link to real activities. Empirical evidence on the stability of Islamic banks, however, is so far mixed. While these banks face similar risks as conventional banks do, they are also exposed to idiosyncratic risks, necessitating a tailoring of current risk management practices. The macroeconomic policy implications of the rapid expansion of Islamic finance are far reaching and need careful considerations.

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The paper analyses existing country-level information on the relationship between the development of Islamic banking and financial inclusion. In Muslim countries—members of the Organization for Islamic Cooperation (OIC)—various indicators of financial inclusion tend to be lower, and the share of excluded individuals citing religious reasons for not using bank accounts is noticeably greater than in other countries; Islamic banking would therefore seem to be an effective avenue for financial inclusion. The authors found, however, that although physical access to financial services has grown more rapidly in the OIC countries, the use of these services has not increased as quickly. Moreover, regression analyis shows evidence of a positive link to credit to households and to firms for financing investment, but this empirical link remains tentative and relatively weak. The paper explores reasons that this might be the case and suggests several recommendations to enhance the ability of Islamic banking to promote financial inclusion.

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The rapid growth of Islamic finance during the last decade has drawn the increasing attention of national policy makers as well as of international institutions. At one level, there is growing recognition of the contribution that Islamic finance can make to the goals of economic and social development. At another level, the expanding size of the sector underscores the importance of a strong public policy stance to ensure that legal and regulatory frameworks are adequate to ensuring orderly growth and resilience. These two broad sets of issues have direct relevance to Bangladesh, which has a large and growing Islamic finance industry.

Islamic finance is an increasingly important means for the financing of physical and social infrastructure that supports economic development and job creation in an expanding group of emerging economies. Countries are seeing the increasing use of Islamic financial instruments to finance long-tenor public infrastructure investments using a variety of Sharī`ah-compliant structures. These investments, and the use of Sukūk to finance them, now span a wide range of social and physical infrastructure and are becoming increasingly important to driving growth in both Asia and the Gulf Cooperation Council countries (GCC). These investments have been made possible by the development of Islamic capital markets, most notably in Southeast Asia and in the Middle East.

Similarly, Islamic finance is an instrument for reaching out to under-served segments of society, which include the poor as well as vulnerable non-poor, amongst whom are very significant numbers of people who have voluntarily limited their access to an interest- based financial system. With the strengthening of regulatory and public expenditure frameworks, an increasing number of countries are integrating Islamic finance into public spending and public financing decisions through issuance of sovereign Islamic securities that further helps to provide a benchmark for corporate Islamic securities. The countries where this is happening are those which have made a long-term commitment to developing a broad-based Islamic financial system, including of Islamic banks.

Islamic finance has proven to be resilient during the Global Financial Crisis. However, Islamic finance is not immune to change and countries that promote Islamic finance are visibly at different stages of economic, market and institutional developments. Reflecting these differences, these countries are also at different phases of regulatory development for Islamic finance. Despite these differences however, there is a common set of issues that each jurisdiction faces, and there is an international dialogue on good practices. Unity in principle, and diversity in practice, would be a good characterisation of the approaches to the regulation and supervision of Islamic finance.

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This paper provides a survey on Islamic Finance in SSA. Ongoing activities include Islamic banking, Sukuk issuances (to finance infrastructure projects), Takaful (insurance), and microfinance. While not yet significant in most Sub-Saharan countries, several features make Islamic finance instruments relevant to the region, in particular the ability to foster SMEs and micro-credit activities. As a first step, policy makers could introduce Islamic financing windows within the conventional system and facilitate Sukuk issuance to tap foreign investors. The entrance of full-fledged Islamic banks require addressing systemic issues, and adapting the crisis management and resolution frameworks.

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Sharia-compliant financial inclusion represents the confluence of two rapidly growing sectors: microfinance and Islamic finance. With an estimated 650 million Muslims living on less than $2 a day (Obaidullah and Tariqullay 2008), finding sustainable Islamic models could be the key to providing financial access to millions of Muslim poor who strive to avoid financial products that do not comply with Sharia (Islamic law). Consequently, Sharia-compliant financial inclusion has recently galvanized considerable interest among regulators, financial service providers, and other financial inclusion stakeholders. However, despite a four-fold increase in recent years in the number of poor clients using Sharia-compliant products (estimated at 1.28 million) and a doubling in the number of providers, the nascent sector continues to struggle to find sustainable business models with a broad array of products that can meet the diverse financial needs of religiously observant poor Muslims.

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Islamic and cooperative banks such as credit unions are broadly similar in that they both share some risk with savers. However, risk sharing goes along with ownership control in cooperatives, whilst Islamic banks share risk with borrowers and downside risk with depositors. Islamic banking is consistent with mutual ownership, which may ease some of the governance and efficiency concerns implied by Shari’ah constraints. Greater risk sharing among cooperative bank stakeholders, using mechanisms embedded in Islamic financial products, may strengthen cooperatives’ financial resilience.

Cooperative and Islamic Banks: What can they Learn from Each Other?  -  English (en)

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Islamic finance is based on ethical principles in line with Islamic religious law. Despite its low share of the global financial market, Islamic finance has been one of this sector’s fastest growing components over the last decades and has gained further momentum in the wake of the financial crisis.

The paper examines the development of and possible prospects for Islamic finance, with a special focus on Europe. It compares Islamic and conventional finance, particularly as concerns risks associated with the operations of respective institutions, as well as corporate governance. The paper also analyses empirical evidence comparing Islamic and conventional financial institutions with regard to their: (i) efficiency and profitability; and (ii) stability and resilience. Finally, the paper considers the conduct of monetary policy in an Islamic banking context. This is not uncomplicated given the fact that interest rates – normally a cornerstone of monetary policy – are prohibited under Islamic finance. Liquidity management issues are thus discussed here, with particular reference to the euro area.

Islamic Finance in Europe  -  English (en)

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In recent years, the Islamic finance industry has attracted the attention of policy makers and international donors as a possible channel through which to expand financial inclusion, particularly among Muslim adults. Yet cross-country, demand-side data on actual usage and preference gaps in financial services between Muslims and non-Muslims have been scarce. This paper uses novel data to explore the use of and demand for formal financial services among self-identified Muslim adults. In a sample of more than 65,000 adults from 64 economies (excluding countries where less than 1 percent or more than 99 percent of the sample self-identified as Muslim), the analysis finds that Muslims are significantly less likely than non-Muslims to own a formal account or save at a formal financial institution after controlling for other individual- and country-level characteristics. But the analysis finds no evidence that Muslims are less likely than non-Muslims to report formal or informal borrowing. Finally, in an extended survey of adults in five North African and Middle Eastern countries with relatively nascent Islamic finance industries, the study finds little use of Sharia-compliant banking products, although it does find evidence of a hypothetical preference for Sharia-compliant products among a plurality of respondents despite higher costs.

islamic finance and financial inclusion  -  English (en)

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The core principles of Islam lay great emphasis on social justice, inclusion, and  sharing  of  resources  between  the  haves  and  the  have  nots.  Islamic finance addresses the issue of “financial inclusion” or “access to finance” from  two  directions —one  through  promoting  risk-sharing  contracts  that provide  a  viable  alternative  to  conventional  debt-based  financing,  and  the other through specific instruments of redistribution of the wealth among the society.  Use  of  risk-sharing   financing   instruments   can  offer  Sharah-compliant  microfinance,  financing  for  small  and  medium enterprises,  and  micro-insurance    to    enhance    access    to    finance.    And    redistributive  instruments  such  as  Zakh, adaqat, Waqf, and Qar-al-asan  complement risk-sharing  instruments  to  target  the  poor  sector  of  society  to  offer  a comprehensive  approach  to  eradicating  poverty  and  to  build  a  healthy  and vibrant  economy.  Instruments  offered  by  Islam  have  strong  historical  roots and  have  been  applied  throughout  history  in  various  Muslim  communities.

The  paper  identifies  gaps  currently  existing  in  Organization  of  Islamic Cooperation  (OIC)  countries  on  each  front,  that  is, Sharah-compliant micro-finance and financing for small and medium enterprises and the state of  traditional  redistributive  instruments.  The  paper  concludes  that  Islam offers  a  rich  set  of  instruments  and  unconventional  approaches,  which,  if implemented  in  true  spirit,  can  lead  to  reduced  poverty  and  inequality  in Muslim  countries  plagued  by  massive  poverty.  Therefore,  policy  makers  in Muslim  countries  who  are  serious  about  enhancing  access  to  finance  or “financial inclusion” should exploit the potential of Islamic instruments to  achieve  this  goal  and  focus  on  improving  the  regulatory  and  financial infrastructure to promote an enabling environment.

The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries  -  English (en)

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Islamic finance is a subject that has now been recognized as a distinct academic discipline to be included in the curricula of economics, business, finance and management faculties of institutions of higher learning. There are several universities and institutions, both in Muslim and other countries, that are teaching courses on Islamic banking and finance. These teaching programmes, however, have been seriously constrained by the non-availability of a standard textbook to be followed. I can say with confidence that this book carries the status of a textbook to be prescribed in the senior levels of undergraduate programmes as well as in graduate programmes in the relevant faculties.

Islamic finance is still a new subject. There is great interest in conducting research on different aspects of its theory and practice in the contemporary set-up. Students of economics and finance keenly look for topics of research in this field. The analytical approach adopted in this book is conducive to bringing to light potential areas of research. Thus, research students in the area of Islamic finance should find this book a must read.

The author of the book has a long experience of research in the State Bank of Pakistan (the central bank of the country), which has played, during the last decade, a significant role in promoting Islamic finance in the country. By virtue of his position in the research department of the State Bank of Pakistan, he has a very valuable insight into the operations of Islamic banks as well as their feasibility to survive in competition with the conventional banks in the country. His approach in presenting the material in this book is very pragmatic. The book, thus, is a useful guide to all those who would like to establish an Islamic bank or would like to work in Islamic financial institutions.

Introduction to Islamic Finance  -  English (en)

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This study discusses Islamic trade and project financing techniques, and draws parallels with conventional finance. It is hoped that the discussion will inspire conventional bankers to incorporate Islamic financing structures into their credit packages, and Islamic bankers to adopt some of the innovations of structured finance to expand their lending and investment possibilities.

The conclusion is that in Islamic finance, banks need to earn their profit not simply because they make money available, but because they take a production or trade-related risk. In principle, this orients Islamic bankers more towards venture capital, project finance and structured finance than their colleagues in other banks. However, in practice, Islamic banks often have difficulties to build up the skills base necessary to evaluate financing proposals in the necessary detail (and, in many countries, lack the supporting commercial framework, such as national rating services), and therefore tend to concentrate on relatively low-risk transactions which, for most non-Islamic observers, look remarkably like interest-bearing loans under a different name. This may, however, change when more experience is built up.

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This short paper begins by succinctly discussing the key principles of Islamic finance, such as partnership and solidarity. It notes that the principles are laid down in the sharia, Islamic law. Furthermore, it highlights that Islamic finance, comprising financial transactions in banks and non-bank financial institutions, formal and non-formal financial institutions, is based on the concept of a social order of brotherhood and solidarity.

The paper then moves on to consider the typology of Islamic financial institutions in Indonesia, where at national and institutional levels, Islamic finance is supervised by sharia supervisory boards (SSB). In Indonesia, Islamic finance comprises two types of institutions: (i) Islamic banking institutions, which fall under the banking law, and (ii) Islamic financial cooperatives, which are not part of the formal financial sector.

Finally the paper provides a typology of Islamic financial products. A clear table format gives a brief explanation of each of the key products, broken down between financial products (profit-sharing and advance purchase products), deposit products and insurance products. The meanings of selected Islamic banking terminology is also given.

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Indonesia, the largest Muslim country, has a highly differentiated micro- and rural finance sector which has evolved over more than a century. Islamic finance has emerged in 1991, comprising Islamic commercial banks and banking units, rural banks, and financial cooperatives. In this study the authors deal with the emerging Islamic microfinance sector in Indonesia, particularly rural banks and financial cooperatives: how they have evolved, how they compare with conventional institutions, and what their prospects for growth are. Islamic finance, after 13 years, accounts for a mere 0.74% of total assets of the banking sector. However, since Bank Indonesia gave official recognition in 1998 to a dual banking system, conventional and Islamic, interest in Islamic meso and macro finance has spread among commercial banks, fuelled by low rates of non-performing loans, and the share of Islamic commercial banks more than quadrupled during 2001-2003: from 0.17% to 0.74%.

Islamic rural banks (BPRS) are under the same effective prudential regulation and supervision as commercial banks and conventional rural banks (BPR). After a promising start in the early 1990s, their development has almost come to a standstill. Despite the fact that they had only two years less than conventional BPR, they have attained a mere 4% of the number and 1.5% of the assets of the rural banking sector. Islamic financial cooperatives (BMT) suffer from the same regulatory and supervisory neglect as the rest of the sector. After a period of rapid growth during most of the 1990s, they are now in decline, with perhaps not more than one-fifth in good health. Fresh money pumped into the sector without effective regulation and supervision will contribute to their downfall, as has been the case in the state-supported cooperative sector.

So Islamic microfinance, lacking popular demand and Islamic banking expertise, is not off to a promising start in Indonesia. Only commercial banks appear to be able of acquiring the art of Islamic banking by training young and dynamic people, but lack experience in Islamic microfinance. Islamic, unlike conventional, rural banks, have failed to prove themselves as effective and efficient providers of microfinance services; Islamic, like conventional, cooperatives are an outright menace to their shareholders and depositors, who risk loosing their money. On the basis of 13 years of experience with Islamic finance in Indonesia, decision-makers in favour of promoting Islamic financial services are now confronted with two major options:

• Focusing fully on Islamic commercial banks in Indonesia and assisting them to establish branch networks with Islamic microfinance products.
• Re-assessing in a participatory process the challenges and realistic opportunities of Islamic rural banks and cooperatives, taking into consideration the lack of broad popular demand, be it from poor or non-poor, and the lack of dynamic growth.

The authors conclude by recommending decision-makers in Islamic organizations, government agencies and donor organizations to cautiously examine the following opportunities for the development of a healthy Islamic financial sector in Indonesia:

1. Encourage Islamic commercial banks, in setting up branch networks of Islamic MFIs, to learn from the rich experience of successful microfinance strategies and institutions within Indonesia, particularly the BRI Microbanking Division, one of the most successful microfinance programs in the developing world.
2. Revamp the Islamic rural banks or they will play only a marginal role in Indonesia. This will require an overall development plan for the BPRS sector mutually agreed upon by all stakeholders and a strong banking association to provide a full range.

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Bank Keshavarzy (BK) is a dynamic and innovative bank in government ownership, with a 70-year history. Within its rural-agricultural mandate, it offers an exceptionally broad array of financial products and services to all segments of the population: mainly small-holders, but also women, low-income groups and commercial farmers. Its potential is enormous, but hampered by a combination of macroeconomic factors and government control over banking. BK has a strong orientation to deposit mobilization and self-reliance, portfolio diversification, and profit-making. With 1,700 branches and close to 10m client accounts (in a population of 65m), its saver outreach (7.7m) and borrower outreach (1.04m) is vast. In a macroeconomic situation of incipient liberalization, it is ready for the transition to sustainable universal banking in rural and urban areas, with a continued focus on agriculture.

The core problem results from a contradiction between a high inflation rate and controlled profit rates (the Islamic equivalent to interest rates) on deposits and loans, resulting in negative real returns on deposits and capital erosion. With real inflation rates around 40% in recent years, depositors, financial investors and consumers lose 40% of the value of their funds every year. At profit rates between 0% (Qarz-Al-Hasanah) and 20%, depositors lose between 40% and 20% of the value of their money every year. To the same extent, the state unintentionally gains what may be seen as a usurious inflation tax. Borrower-investors are charged profit rates of 13%-25% (see Tables 4-5) by BK. They either gain unduly at the expense of the depositors and the bank; or they invest in low-return activities, thereby hampering personal income and economic growth.

The results of this situation are contrary to the principles of Islamic banking and may be interpreted as unintended usury. Gains and losses are unduly and unequitably distributed between depositors, borrower-investors and the state. The gains of the state from the inflation tax and of diligent borrower-investors from loans prized below the real costs of funds are at the expense of vast numbers of depositors and consumers, and of bank capital. This has hampered deposit mobilization and the overall volume of financial intermediation between depositors and borrowers; it has eroded the value of the capital of depositors and the bank; it has slowed down the growth of the Bank’s services; and it has restricted the Bank’s microfinance services to women and the poor the cost of which cannot be covered from the income of financial operations. Ultimately, this has distorted rural financial markets and undermined development. Low-income groups have been particularly affected: either by the negative real returns on their savings; or by the lack of access to credit.

Two related strategies are suggested: (a) bringing down the inflation rate; and (b) adjusting the profit rate structure, setting profit rates on deposits above the inflation rate and equating these profit rates of deposits with cost of funds in the determination of lending rates. Within such a conducive environment, BK will then vigorously mobilize its own resources, remunerate its depositors fairly and adequately, provide credit and other financial services to all segments of the population, have its loans repaid on time, and finance its expansion from its profits while preserving the value of its capital.

This paper, which was prepared for NENARACA, the regional agricultural credit association, suggests that to initiate this process, NENARACA could:

1. support to participatory high-level policy seminars on market-based profit rates on deposits and loans with just and equitable real returns to all parties involved in the transaction;
2. support to comprehensive participatory planning in BK and all its divisions with the objective of viable operations and sustainable financial services;
3. staff training and exposure training abroad for decision-makers in preparation of the reform process;
4. linkages with donor technical and financial assistance for the implementation of reform.

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This short paper suggests that Islamic instruments are simply a narrow group of familiar financing instruments. It notes that Islamic instruments generally avoid loans – although the scheduled distribution of proceeds may be the same as for a conventional loan, the legal risk in the case of default is often different in the different forms of financing. Those who promote Islamic finance often prefer partnership arrangements in which profits or turnover is shared because this conforms more fully to the goals of Islamic banking.

This paper, which discusses Islamic Banking and its potential impact, particularly in rural areas, takes Indonesia as the basis for its case study. The work of Shariah Bureau of Bank Indonesia, demonstrates that Indonesia, especially in particular parts of the country, has considerable unmet demand for Islamic Banking. The report begins by presenting data on the oldest and largest Islamic bank in Indonesia, Bank Muamalat, and on the Bait Maal Wat Tamwil (BMT), the Islamic savings and loan cooperatives.

The paper then moves onto a discussion of the key findings and recommendations. It argues that Islamic finance, as part of a financial sector development strategy, ought to be encouraged, mainstreamed, and adjusted to. In conclusion, the paper takes the view that donors should ensure that their assistance to financial system development includes Islamic financial institutions. It notes in particular that Islamic finance:

• enables financial services to an otherwise group including small, rural, and agricultural producers;
• furthers a social trust to assist smaller producers and consumers and is often given in the context of a movement to assist them;
• requires some adjustment, mostly formal, of techniques and regulation to take account of Islamic values.

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This paper notes the development of sharia banking in Indonesia is a realisation of the needs of the public seeking an alternative banking system that is both capable of delivering sound banking/financial services and compliant with sharia rules. Bank Indonesia, as the banking regulatory authority has been in the position to conduct the task as mandated in the Banking Act to establish a sound sharia banking system.

The Blueprint defines the position, vision and strategic initiatives in developing sharia banking and serves as a critical reference for the sharia banking stakeholders. The vision of the sharia banking development referred to here is defined as follows:

“The establishment of a competitive and efficient sharia banking that complies with prudential banking principles, and significantly support real sector activities through share-base financing with real underlying transactions in the spirit of justice, brotherhood and good-deeds to promote the well-being of the nation.”

The initiatives, which are defined in the Blueprint, are derived from the strategic objectives that will be achieved by Bank of Indonesia together with other stakeholders going forward. The initiatives are categorised into four major activities, i.e., ensuring better sharia compliance, improvement on prudential regulations, supporting operational efficiency and competitiveness, and supporting a higher level of systemic stability. The first stage is said to put strong foundation to the sustainable development of the industry. The second stage focuses in strengthening the structure of the industry. The last stage focuses on the adoption of international standards for sharia banking services.

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This short paper focuses on the fact that many elements of microfinance can be considered consistent with the broader goals of Islamic banking. Both systems advocate entrepreneurship and risk sharing and believe that the poor should take part in such activities. The authors provide a good introduction to the principles of Islamic banking and to the types of Islamic banking contracts - mudaraba or profit and loss sharing and various non-profit and loss sharing schemes that include benevolent loans, foward contracts, leasing or lease purchase arrangements and purchase finance (cost plus mark-up).

The paper goes on to review the guiding principles of best practice microfinance and gives examples of how Islamic banking and microfinance share common aims, such as the disbursement of collateral-free loans in certain instances and character-based lending. Three basic instruments of Islamic finance are examined for their potential for inclusion in a successful microfinance programme, i.e. mudaraba (trustee financing), musharaka (equity participation) and murabaha (cost plus markup).

The authors conclude that these techniques could, if used, give thousands of entrepreneurial poor access to microfinance but that more experimentation and practice in the field is needed.