Islamic micro financing not taken seriously in Pakistan says, Ahmed Shuja Kidwai

Islamic micro financing not taken seriously in Pakistan says, Ahmed Shuja Kidwai

Ahmed Shuja Kidwai, the Chief Operating Officer of Al Baraka Bank, said that the extraordinary potential in the country, financial institutions in Pakistan are still not taking Islamic micro financing seriously.

Speaking about the situation of this up-and-coming sector in the country, he said that Islamic micro finance is particularly important for Pakistan as it’s a developing economy and has a huge unexploited market.

Even conventional means of micro finance are growing at much slower rates than expected. The State Bank of Pakistan (SBP) is paying special emphasis to this sector of banking but so far the response has not been positive.

Kidwai said that he was one of those managers who believe in learning the fundamentals of a market and exploring how to make it into a success.

Al Baraka Bank, with 89 branches in Pakistan, is in a better position now to pursue small and medium size businesses that can grow with Islamic micro financing, he said, adding that his bank has plans to focus on this market in
2012.

Citing the example of Italy, he said the country had given micro financing to its small and medium size industries, after World War II, which have since then grown into mega corporations. There were many car parts manufacturers
with small facilities and now they are major car parts manufacturers of the world, he said.

Pakistan also has the examples of Iran, India and Malaysia which have grown their industries through micro financing in just 10-15 years, added Kidwai.

He explained his rationale with practical examples of how microfinance can work as an economic catalyst for growth. “Suppose, five car mechanics work in a garage at a salary package of Rs25,000 a month. If they all start their
own shops, they will work more and gradually start earning more than their job; this would also encourage competition in the market. It is not too difficult to comprehend. When people get loans to start or expand their business, they think 24-hours a day for
their business compared to an 8-hour routine job.”

 He explained, “Gradually, these small businesses expand into something bigger and may eventually turn into corporations. With the prevailing difficult economic conditions in the country, I think Islamic micro finance is the best
way out for Pakistan.”

Short URL: https://www.newspakistan.pk/?p=6001

Posted by Wajahat Javed on Dec 13 2011. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry