Abstract
The chapter investigates whether or not skill-based interest-free microfinance to entrepreneurs in Pakistan is a more sustainable model of microfinance. The study is quantitative (descriptive statistics) and qualitative (multiple cases of Pakistani entrepreneurs who have successfully initiated their own businesses) in nature. The researchers are interested to compare three entrepreneurs’ microfinance models prevailing in the country which are interest-free skilled-based financial investment, interest-free financial investment and interest-based financial investment. The findings verify that out of tthree models discussed in this chapter, the skilled-based and interest-free model of microfinance is not only innovative but also more sustainable model of microfinance for entrepreneur.
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Notes
- 1.
These five principles are bird in hand, experimentation, affordable loss, lemon for lemonade and pilot in the plane.
- 2.
Microfinance businesses of Akuwat Foundation include dressmaking, industrial electrician, artificial Insemination, plumbing, food cooking and kitchen management, motorcycle mechanic, beautician, embroidery, welding, computer hardware, computer software and auto mechanic.
- 3.
Sarasvathy’s theory of Effectuation (2001) describes an approach to making decisions and performing actions in entrepreneurship processes, where you identify the next, best step by assessing the resources available in order to achieve your goals, while continuously balancing these goals with your resources.
- 4.
Al-Quran, Sura Al-Baqara, 2:275.
- 5.
Al-Quran, Sura Al-Baqara, 2:278–279.
- 6.
Results based on multidimensional poverty statistics. Multidimensional poverty report (2016).
- 7.
Pakistan Microfinance Network.
- 8.
MicroWATCH, Issue 32, Qtr 2, 2014, PMN.
- 9.
MicroWATCH, Issue 32, Qtr 2, 2014, PMN.
- 10.
Microfinance growth strategy 2020 prepared by Pakistan Microfinance Network.
- 11.
Convention loan means loans with interest payment, while Islamic loan means loans without interest payments.
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Mahmood, F., Ishaq, A. (2020). Skill-Based and Interest-Free Microfinance Model of Entrepreneurship as the More Sustainable Model. In: Elzahi Saaid Ali, A., Ali, K., Khaleequzzaman, M. (eds) Enhancing Financial Inclusion through Islamic Finance, Volume I. Palgrave Studies in Islamic Banking, Finance, and Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-39935-1_11
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