Monetary and Banking Research Institute
Date:2/20/2019 3:11:44 PM   |   Code : 294228   |   View: 223

Development of tools that can be used in Qarz Al-Hassaneh Mehr Iran Bank in the form of other Islamic contracts (especially Murabahah contract) with microfinance approach (Qarz Al-Hassaneh Mehr Iran Bank, 2017-2018)


Executive Summary

An assessment of the Iran’s banking system over the past three decades has shown that although a lot of positive efforts have been made for the implementation of Islamic banking, there are still challenges for the Islamic performance of banks and credit institutions. Perhaps because of the same challenges, the elites, the clerics (and jurists) and even the public are skeptical about the functioning of the Islamic banking system. In fact, it can be argued that the current state of implementation of the usury-free banking system in the country is far from the ideal model of Islamic banking, which has been widely emphasized in the theoretical literature of Islamic economics and finance.

The main question to ask is: what are the plans that banks and credit institutes need to have in order to fully operate in the framework of Islamic standards?

In this regard, via successful patterns and failed experiences in other Islamic countries, Qarz Al-Hassaneh Mehr Iran Bank is chosen as one of the most successful banks in the country and, through specific and timely reforms, it is attempted to make the standard model of Islamic banking in the country.

The main questions of the present research are:

1.     What are the new banking instruments in the business model of the Qarz Al-Hassaneh Mehr Iran Bank, mostly in the framework of other Islamic contracts (especially the Murabahah contract)?

2.     What are the ways of using Murabahah credit card in Qarz Al-Hassaneh Mehr Iran Bank?

The research project is carried out in five phases:

1.     Assessing the Grameen Bank experience and other microfinance banks internationally

2.     Evaluating the Jurisprudential-Economic feasibility of Murabahah contract to expand microfinance activities in Qarz Al-Hassaneh Mehr Iran Bank

3.     Evaluating the Islamic approach to finance micro businesses targeting poor and low income groups

4.     Designating the group-lending model  for the bank to remove collateral

5.     Evaluating the Jurisprudential-Economic feasibility of crowdfunding

The output of the present project includes developing instruments and practices that can be used in Qarz Al-Hassaneh Mehr Iran Bank in the form of other contracts (especially Murabahah contracts) with the emphasis on microfinance approaches.

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