Conference and Workshop Report on "Islamic Modes of Financing"

This document presents the details of a conference-cum-workshop that the 'Association for the Creation of Employment' held in Peshawar, Pakistan.

The workshop aimed to:

• Create awareness and develop a practical lending model in Pakistan that could be immediately implemented at the micro-level, and then modified, if necessary, according to Islamic principles;
• Diffuse tensions between the clergy and development workers.

The details of the workshop are as follows:

• Speakers explained economic concepts and shared their experiences;
• Participants applied these principles and concepts to real-life situations;
• The workshop developed models lending for livestock, agricultural inputs and trading, shop-keeping and machinery loans.

The results of the conference were as follows:

• Positive feedback from the clergy and Academia;
• Appreciation from the clergy of the work of the non-government-organization (NGO) sector.

The participants of the workshop recommended:

• Experimentation of these models and repetition of these exercises;
• Distribution of information among the public, enabling them to know what to demand and how to enter into contracts that Islam allows.

The conference made the following points:

• The objective of Islamic banking was the maximization of social benefits through the creation of healthier financial institutions;
• Islam allows two parties to negotiate profit/loss so that the higher productivity of one partner or the additional services that one partner provides could be adequately compensated;
• The Grameen Bank model would be suitable for Islamic microcredit because it is group-based and allows internal monitoring.