Islamic microfinance

Islamic microfinance provides small-scale financial services to underserved or low-income individuals in accordance with Islamic principles, which prohibit interest (riba) and promote risk-sharing and ethical lending. Instead of charging interest, Islamic microfinance uses profit-sharing, leasing, or partnership models like Mudharabah and Musharakah, fostering financial inclusion while adhering to Shariah law. This approach enables entrepreneurs and low-income communities to access funds for livelihoods, supports sustainable development, and encourages social equity through ethical financing that emphasizes justice and mutual benefit.