The Halal Way to Social Change: Is There a Way to Pursue Grameen's Social Agenda Without Using Interest?

Islamic Horizons, p. 42, January/February 2007

1 Pages Posted: 19 Jul 2008 Last revised: 20 Feb 2018

See all articles by Ehsan H. Feroz

Ehsan H. Feroz

University of Washington, Milgard School of Business-Accounting ; University of Illinois at Urbana-Champaign; Government of the United States of America - US GAO Advisory Council; University of Minnesota, Labovitz School of Business-Department of Accounting; University of Minnesota, Carlson School of Management-Department of Accounting; American Accounting Association

Abstract

This paper integrates the positive features of the Grameen Bank (i.e., zero tangible collateral and human portfolio approach) with the Shariah based notion of equitable risk and return sharing between a borrower and a lender. The proposed approach would significantly reduce the costs of capital by avoiding compound interest, and enhance social welfare through equitable allocation of capital.

Keywords: Microfinance, Poverty, Grameen Bank, Risk Sharing, Political Economy, Islamic Finance, Bangladesh, India, Pakistan,Malaysia, Indonesia, Social Experiment, Rural Development, Nobel Peace Prize

JEL Classification: A13, D63, F43, G21, L31, M21, O10, P50

Suggested Citation

Feroz, Ehsan H., The Halal Way to Social Change: Is There a Way to Pursue Grameen's Social Agenda Without Using Interest?. Islamic Horizons, p. 42, January/February 2007, Available at SSRN: https://ssrn.com/abstract=1162871

Ehsan H. Feroz (Contact Author)

University of Washington, Milgard School of Business-Accounting ( email )

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American Accounting Association ( email )

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