Viability and practices of interest-free microfinance in the state of Kerala: An analytical study based on customers’ perceptions

Abstract

This is an empirical study on Interest-free (Islamic) Microfinance (IsMF) which is based on the Profit Loss Sharing (PLS) financial mechanism, conducted in the state of Kerala. In India, IsMF is at a nascent stage but many institutions have ventured into IsMF-type financial enterprises, especially after the recent microfinance crunch of 2011–12. This study explores the viability and practices of IsMF as an alternative to conventional microfinance in India. The main objectives of this study are to investigate the products and services of IsMF, to identify its operational methods and to analyse the perceptions of customers towards all these aspects. Keywords: Interest-free microfinance (IsMF), Products and services of IsMF, Operational methods of IsMF, Customer perceptions towards IsMF