Better Understanding the Demand for Islamic #Microfinance

To close the severe gaps in financial inclusion in the Middle East and North Africa, more and more governments are starting to develop national financial inclusion strategies driven by evidence-based studies. So far, demand studies on Islamic finance have produced mixed results. To examine the distinction between preference and actual choice, CGAP, Yale University and Tamweelcom took a novel approach to the study of demand for Islamic and conventional loans in Jordan. According to the experiment, more people opt for the Islamic microloan than the conventional one when offered both (17% versus 2%). Sharia certification appears to have no significant impact on loan take-up at all. The study found that in Jordan people who are more religious are willing to pay a higher price for an Islamic microloan.