Islamic Sharia-based Group Microlending Initiative and Implementation Trajectory Experience in Afghanistan
Although some people think the concept of Sharia Law Islamic Banking system is ancient, modernized Islamic Banking has been operating for many decades around the world. Countries such as Bangladesh, Malaysia, UK, Singapore, Pakistan and Bahrain competitively run their Islamic banking side by side with modern commercial banks that are successful in their banking operations and are financially sustainable. However, Islamic Sharia micro financing services are new and rare in the Muslim world although these services can easily help marginalized people to become economic actors in the society and to address the issue of poverty. For example, Islamic Sharia Law Group micro lending initiative and implementation in Kandahar, Afghanistan during 1996-1997 was one of the innovations launched by the author, which was funded and supported by UHCR-Grameen Bank to encourage and upkeep small business development instead of providing only financial aid/relief to Afghan returnees. It was further hoped that the programme success in Afghanistan could lead to a breakthrough in attracting specialized international lending institutions in the overall reintegration process in a country which has long been promoted by UNHCR. The Afghan political leadership expressed their willingness to invite and support the programme in Kandahar in 1996. They confirmed their position indicating that the programme should be designed following Sharia Law. With the consent of the Political Authority (during 1996-1997), this microcredit project recovery strategy was within the Islamic Sharia principles along with the principles of Holy Quranic interpretations of interest. The project applied Sharia lending principles while implementing the project in Kandahar: (1) Modarebah i.e. profit sharing, (2) Bai-Muajjal (sales under deferred payment), (3) Combination of Modarebah and bai- Muajjal , (4) Murabaha (contract sale), (5) Use terms ‘service charge’, ‘administrative charge’ and hyperinflation recovery
