Design of a non-profit islamic microfinance model based on zakat, waqf, and sadaqa for Morocco

Abstract

Despite the growing body of research on Islamic microfinance (IMF), few studies have focused primarily on the non-profit Islamic microfinance model (NP-IMF) in the Moroccan context. This article addresses this gap by proposing the design of an NP-IMF model tailored to the Moroccan socio-economic context. This model is based primarily on the mechanisms of Islamic social finance (ISF), notably zakat, waqf and sadaqa, which constitute the main sources of upstream funding for non-profit Islamic microfinance institutions (NPI-MFIs). These funds enable these institutions to mobilize resources to finance individuals and legal entities excluded from the conventional financial and banking system. Downstream, NPO-IMFIs rely primarily on qard el-hassan (QH) as their sole financing instrument. Methodologically, this article adopts an exploratory qualitative approach based on a literature review and a comparative analysis of successful MFI experiences. Compared with existing work on MFIs in Morocco, this research stands out by proposing an integrated model specifically tailored to BNL organizations. This approach enables us to make a twofold contribution: to enrich the theoretical framework in the field and to provide operational implications for developing the MFI sector in Morocco. Structurally, the article presents the definition, characteristics and basic principles of BNL MFIs, and examines their upstream funding sources, downstream financing instruments, and risk management tools (micro-takaful). Next, to illustrate the feasibility, effectiveness and smooth operation of this model, the article describes examples of initiatives from Pakistan (Akhuwat Islamic Microfinance) and Malaysia (Amanah Ikhtiar Malaysia). Finally, the proposed model is analysed for its relevance, functioning and prospects for application in the Moroccan context, highlighting its potential to support the financial inclusion of excluded populations whilst respecting the principles of Sharia.

Classification JEL: G21, O16, Z12, L31

Paper type: Theoretical Research