Sharia, Islamic law, prohibits usury, the collection and payment of interest, as well as investing in businesses that are considered unlawful. But with some modifications, microfinance can be made Shariah-compliant, opening up access to credit and poverty alleviation services to many Muslims.
The department of Noun, in western Cameroon, has a population of 1 million, of which 85 per cent are Muslims, compared to 22 per cent of the total Cameroonian population. While the area has many mosques and Muslim educational institutions, until recently there was no microfinance institution operating under Islamic law. Thousands of Muslims who wanted to stay faithful to Islamic banking laws had no way to store their savings or access credit.
Muslim followers had been financially abandoned in this region of the country, says Fifen Issah. To start a business, lack of starting funds is a major obstacle. This is more evident in sub-Saharan Africa than anywhere else. But when it comes to an Islamic project, this barrier can easily be transformed into an impenetrable wall.
No cooperative or any other microfinance institution, Islamic or not, existed in the area. Without a system of savings and credit the cycle of poverty would certainly continue in this area, said Fifen.
So in May 2008, Fifen launched the countrys first Islamic microfinance programme, based in the village of Foumbot. The Islamic Saving and Credit Cooperative of Cameroon (ISCCC) is the first Shariah-certified, social-performance-based poverty alleviation organization, with a unique and innovative Islamic microfinance model and business design. The organization has been formed as an ideological cooperative with the guiding principle of partnership with the poor and profit and loss sharing.
Operating only on the basis of contributions from members, the cooperative already has 750 members, both Muslims and non-Muslims. Its target is poor rural women, who make up 89 per cent of its members. The ISCCC provides members with Productive Zakah (donations) and Qarz-e-Hasna (interest-free loans) to start their businesses or buy agricultural inputs after giving them the basic business training. The cooperative is also working on health awareness.
The ISCCC has decided to follow the methodology of Pakistans Farz Foundation, and has been applying it since October 2011, with free technical assistance from the foundation.
We believe that to effectively fight food insecurity in Cameroon and sub-Saharan Africa, it is necessary to develop more human microfinance programs, like Islamic microfinance, finance the chain value of agricultural production and fight against disease and ignorance, said Fifen. The Farz model integrates these concerns.
While still limited in its operations, the cooperative is seeking partners and funding so that it can expand and become more stable and sustainable. In short, said Fifen, everything that can enable our cooperative to take off to the delight of thousands of poor rural families of our beloved and beautiful country.