Vulnerable people worldwide are routinely denied access to potentially life-changing loans because conventional finance institutions regard them as too much of a risk to lend to – or, for Muslims, because their faith forbids them from accessing loans that are not Shariah-compliant. This leaves many vulnerable to unscrupulous loan sharks whose crippling charges leave them mired deeper than ever in debt and poverty.
A scheme that we funded in 2016 gave some of the poorest households in Mali a permanent route out of the poverty trap. It provided Islamic microfinance services to 147 women struggling to provide for their families in a country in which 2.5 million people were estimated to be food insecure.
Participants did not need assets to secure a Quard Hassan interest-free loan – instead, the risk, if they were unable to pay it back, was shared by members of the fully-trained community cooperatives set up through the project.
“Thanks to these loans we are able to cope with the daily expenses of our households.”
The enterprising women used their loans to produce and sell shea butter, juice, traditional mustard and monkey bread pastries, among other businesses. With the money they earn, they are now able to improve their living standards, feed their families, and send their children to school. “My main activities are for the moment the trade of peanut butter, coal and some seasonal products such as onions,” said Mamou Kodio, 49. A widow and mother-of-five living in a village near Bamako, her youngest child is just eight-years-old. Mamou is one of a dozen women members of a cooperative set up by Islamic Relief – which has also helped the group to borrow from a local cooperative union.
“We have benefited from a lot of technical, financial and advisory support from Islamic Relief,” she added, describing how the women redistribute some of the profits from their businesses as loans, enabling cooperative members to further develop their enterprises.
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