Does Islamic microfinance serve maqāsid al-shari'a?

Abstract

The purpose of this paper is to analyze whether the practice of Islamic microfinance serves maqāsid al-shari'a (underlying intents of Islamic law) or not. The paper uses a qualitative methodology. Using the literature, five key factors of maqāsid al-shari'a pertaining to an Islamic economy and mal (wealth) are developed, which are then used as a base of analysis for analyzing whether the practice of Islamic microfinance serves maqāsid al-shari'a. The research further uses an Islamic microfinance window based in Kyrgyzstan as a case study. The empirical data and analysis indicates that Islamic microfinance contributes to serving many key aspects of maqāsid al-shari'a, including: (1) Poverty reduction (2) economy enhancement (3) enhancing social condition of society (4) wealth distribution and circulation, and (5) enhancing intellectual levels of society. This research may have contributed to knowledge by possibly being one of the first researches analyzing the impact of Islamic microfinance on maqāsid al-shari'a, by using contemporary empirical data from Kyrgyzstan (2017 onwards) as a case study.

Keywords

• E49
• G30
• Q01