The
Presidents/Chief Executives,
All Banks/MFBs,
Dear
Sir / Madam,
Guidelines
for Islamic Microfinance Business
Pakistan
is among the few countries in the world, which has a separate
legal and regulatory framework for Microfinance Banks. The
framework allows microfinance and commercial banks to extend
range of microfinance services to poor and low income people
through various arrangements. With the growing popularity
of Islamic Banking in the country, it was deemed necessary
to provide options for provision of Islamic microfinance
services by microfinance and commercial banks as well as
allowing full fledged Islamic microfinance banks in the
country.
2. Consequently, State Bank of Pakistan has formulated guidelines
for provision of Islamic microfinance products and services
by financial institutions which are attached as annexure
to this circular. These guidelines are aimed at broadening
the coverage of microfinance products and services to low
income segments of the society in a Shariah compliant manner.
These guidelines stipulate four types of institutional arrangements
for offering Islamic microfinance viz:
1. Establishing Full Fledged Islamic Microfinance Banks
(IMFBs)
2. Islamic Microfinance Services by Full-fledged Islamic
Banks
3. Islamic Microfinance Services by Conventional Banks
4. Islamic Microfinance Services by Conventional Microfinance
Banks (MFBs)
3.
It must be taken into account that the criteria mentioned
in these guidelines shall be in addition to the requirements
already issued by SBP under respective category of financial
institutions. These regulations and guidelines, by any means,
are not replacing the regulations and guidelines already
issued by SBP from time to time in this area.
4. Commercial and microfinance banks interested in building
Islamic microfinance portfolio should review the different
institutional/organizational arrangements and select, one
or the combination of more than one mode, based on their
organization structure, capacity and overall objectives.
5. Please acknowledge receipt.
Annexure