An evaluation of Egyptian microfinance laws and regulations preventing overindebtedness of women

Bedaiwy, Shymaa; Peter, Dimity

doi:10.1002/jid.3633

Cited by 3 publications

(1 citation statement)

References 35 publications

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“…Second, because of the extortive interest rates charged by MFIs, borrowers are mostly disadvantaged (Dufwenberg and Gneezy, 2000), as they are not spared the payment of interest even in the event of business losses. Most MFIs do not provide adequate supervision for businesses financed by them but focus only on the installments paid by the borrowers (Bedaiwy and Peter, 2022). Third, in a bid to maximize their financial gains, MFIs often undertake an excessive loaning strategy (Sainz‐Fernandez et al , 2015), thereby increasing the tendency for multiple borrowings.…”

Section: Literature Reviewmentioning

confidence: 99%

The transformation of conventional microfinance into Islamic microfinance in Bangladesh: proposed Shariah-based model(s)

Mia

2023

QRFM

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Purpose Despite being a Muslim-dominated country, Bangladesh has widely embraced traditional microfinance since its inception in the mid-1970s. However, Islamic microfinance, which has a lot to offer to the poor, is still in its infancy and has yet to gain momentum in the country. Therefore, the purpose of this study is to analyze the importance of Islamic microfinance and propose alternative Shariah-compliant microfinance models in Bangladesh. Design/methodology/approach This study is based on the desk research method, which relies on existing literature to collect secondary data on key concerns of traditional microfinance programs. In addition, institutional-level secondary data were also collected from the Microcredit Regulatory Authority (MRA) of Bangladesh. Guided by the Maqasid-al-Shariah, this study then proposes several Islamic microfinance models to overcome selected challenges faced by the microfinance industry in Bangladesh. Findings This study suggested three composite Shariah-compliant microfinance models, which are likely to help the underprivileged and thus ensure the achievement of the sustainable development goals in Bangladesh. The first model explained how the operational strategy of incumbent microfinance institutions (MFIs) could be restructured, while the second proposed the organizational strategies for establishing a new MFI. The third model used the notion of Sadaqah (charity) to address the multiple borrowing issues of the industry. Meanwhile, the successful transformation of the conventional microfinance industry to an Islamic one is dependent on the effective collaboration between the regulatory authorities, practitioners and MFIs. Originality/value Albeit the paucity of literature on the topic, the findings of this study will guide policymakers/practitioners in designing relevant microfinance models to help transform conventional microfinance into Islamic microfinance in Bangladesh.

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Section: Literature Reviewmentioning

confidence: 99%

The transformation of conventional microfinance into Islamic microfinance in Bangladesh: proposed Shariah-based model(s)

Mia

2023

QRFM

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Microfinance Regulation and Consumer Socio-Economic Security

Bedaiwy

Peter

2022

Regulating Human Rights, Social Security, and Socio-Economic Structures in a Global Perspective

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In 2006, the Nobel Peace Prize was awarded to Muhammad Yunus, who introduced microloans to poor rural women in Bangladesh to promote their economic growth and empowerment. This economic development model for the poor has expanded throughout the developing world and extended to a wide range of populations with different financial needs, known as microfinance. Microfinance clients typically do not have access to regular banking services because of a lack of collateral or physical proximity to service. Microfinance institutions (MFIs) can serve clients in remote rural areas with little transportation or infrastructure. This chapter examines the case for the regulation of microfinance providers, also known as microfinance institutions (MFIs). Such regulation ensures both economic growth and socio-economic security of vulnerable microfinance borrowers using Egypt as a case study.

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Proceed With Caution

Bedaiwy

2023

Advances in Finance, Accounting, and Economics

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Microfinance had a clear mission of serving the least privileged. However, 45 years after Muhammad Yunus introduced the first microloans, the global microfinance market has become increasingly commercialized, with high tendencies toward for-profit organizations, in contrast to how it was originally introduced within the realm of not-for-profits. Microfinance is now a multi-billion-dollar financial industry. Microcredit is adopted as an efficient tool to achieve sustainable development goals. This chapter is analyzing how the current Egyptian microfinance regulations can contribute to the achievement of SDGs. The analysis shows that Egypt has developed and enacted a law that is meeting the international standards of microfinance global best practice; however, there is room for ensuring the microfinance institutions are following their social justice mission by regulating other microcredit services beyond financing income-generating activities. The chapter concludes that more regulations are needed to ensure that MFIs are reaching out to women micro-entrepreneurs and doing them no harm.

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An evaluation of Egyptian microfinance laws and regulations preventing overindebtedness of women

Cited by 3 publications

References 35 publications

The transformation of conventional microfinance into Islamic microfinance in Bangladesh: proposed Shariah-based model(s)

The transformation of conventional microfinance into Islamic microfinance in Bangladesh: proposed Shariah-based model(s)

Microfinance Regulation and Consumer Socio-Economic Security

Proceed With Caution

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