Islamic microfinance promotion.
Description
The objective of the Study is to assess the existing microfinance sector in Egypt and accordingly suggest a suitable intervention model for the Islamic Development Bank (IDB) (also known as IsDB) in line with the objectives of the Microfinance Development Program (MDP). The intervention model should include establishing/ strengthening a microfinance institution and development of the related enabling environment, as needed in order to promote and develop Islamic microfinance.
Services
Feasibility Study
- Study the existing microfinance sector (both conventional and Islamic) in Egypt including, but not limited to, the following areas: legal and regulatory environment, market size (current and potential), major microfinance providers (incl. market shares), institutional structures, products, pricing and delivery systems of microfinance providers, and key sector indicators (number of borrowers, age distribution of borrowers, range of loan sizes, average loan size, target economic sectors, etc.).
- Highlight the major challenges and limitations facing the existing microfinance providers.
Intervention Strategy
- Recommend the appropriate intervention strategy for IDB to promote and develop Islamic micro finance
- Develop the enabling environment (i.e. legal, regulatory and supervisory framework) essential for introducing and/or strengthening Islamic microfinance activities in Egypt
- Indicate critical modifications required in the environment and advise IDB on suitable approach therein.
- Identify the suitable existing microfinance providers with whom IDB can partner in order to strengthen them & identify major local sponsors and as well as development financial institutions with whom IDB can effectively partner to implement the recommended strategies.
- Advise IDB on suitable approach for converting an existing MFI into an Islamic MFI by way of equity participation, coupled with technical assistance.
- Propose a suitable business model (including financial projections) for the proposed institution.
- Indicate the banking and regulatory requirements and challenges for establishing the Islamic microfinance institution and recommend practical and speedy solutions and advise IDB on suitable approach therein.
- Compare and discuss the pros and cons of each with the view to maximize developmental impact for each of the above proposed strategy (or combination of strategies),
Technical assistance
- Convert an existing MFI into an Islamic MFI by way of equity participation, coupled with technical assistance.
- Establish a new Islamic microfinance institution by way of equity participation.
Microfinance Profile
- Draw a profile of the current microfinance services industry with identified organizational capacity discrepancies and potential for growth in the area of Islamic microfinance services.
- Identify & describe legal framework, conditions, constraints and opportunities for setting up Islamic microfinance
- Prepare a proposal for a country relevant strategic program for the development of Islamic Microfinance Industry which combines meso, macro and micro level interventions for Improving the enabling environment and establishing/improving microfinance institutions for the delivery of Islamic microfinance services based on a performing business model
- Validated the proposal for the strategic program through a stakeholder’s consultations workshop.
- Formulate an integrated strategic intervention program for IDB to support the development of Islamic microfinance industry in Egypt
- Develop for each option the financial projection and elaborate on the pros and cons of each option