Table 1 Comparison between conventional... | Emerald Publishing

Table 1

Comparison between conventional and Islamic microfinance

	Conventional microfinance	Islamic microfinance
Reference	Based on capitalism principles	Based on Islamic finance principles
Aim	Economic development	Economic and social development
Financing mode	Debt -based	Asset-based and profits-and-losses sharing approach
Dealing with defaults	Charges delay penalties	No delay penalties
Group targeting	Targets the active poor notably women	Targets the active and extremely poor: The poor family without distinguishing between men and women
Source of funds	External funds savings of clients	External funds savings of clients charity funds (zakat, waqf)

	Conventional microfinance	Islamic microfinance
Reference	Based on capitalism principles	Based on Islamic finance principles
Aim	Economic development	Economic and social development
Financing mode	Debt -based	Asset-based and profits-and-losses sharing approach
Dealing with defaults	Charges delay penalties	No delay penalties
Group targeting	Targets the active poor notably women	Targets the active and extremely poor: The poor family without distinguishing between men and women
Source of funds	External funds savings of clients	External funds savings of clients charity funds (zakat, waqf)

Source(s): Table established by the author based on Ahmed (2002) and Rahayu (2020)