"A STUDY OF ISLAMIC MICROFINANCE MARKET PRODUCTS AND CUSTOMER SATISFACTION IN PAKISTAN" (STUDY OF ISLAMIC BANKS)

Abstract

The research paper focuses on the potential of Islamic Microfinance in Pakistan. The market of Microfinance in the world is moving towards the Islamic Microfinance as it gives the true sense of eliminating the poverty from the society. The puipose of this research is to analyze what are the potential of Islamic microfinance products in Pakistan and what are the prospects of Islamic Microfinance in banking sector. This has been observed that up till now no conventional or Islamic bank has done much in this field. Some ofthe Islamic banks are planning but still we don’t see much contribution from their side. There is a great potential of Islamic Microfinance to be spread throughout the world, currently we observe major market and institutions in Punjab province. The microfinance institutions should cater other provinces as well. There are several products which are Shariah complaint have the positional to be adopted as the microfinance products. Murabaha, Ijarah, Salam, Istisna, Mudaraba, Musharaka, Muzara, Musaqa are the products which can be introduced as Islamic Microfinance Products. All of the respondents agreed that the Musharakah, Murabahah, Mudarabah, Ijara are appropriate for Micro financing. All these products need to be studied by the governing authorities. Banks are showing hesitation in entering this field. They are concentrating more on corporate sector. Long documentation, lack ofregulations, high risk, high cost of doing the business are the factors which restricts them to serve the have-nots. In the current situation of the economy it is even becoming difficult for middle class to strive in the society. Banks are struggling for their survival in this situation they cannot think of doing a business which is highly risky and is less regulated in the economy. Result of research will take time to introduce Islamic Microfinance services by the Islamic banks in Pakistan. None ofthe observed banks has plans to enter into this field of finance due to the reasons discussed in above paragraphs. The research was conducted through questionnaire from leading Islamic banks of Pakistan like Meezan bank, Dubai Islami Bank, Bank Albaraka and the regulator State Bank of Pakistan. All the responses were analyzed and based on those conclusion and recommendations have been made