COMPARATIVE ANALYSIS OF TRADITIONAL AND ISLAMIC MICROFINANCE MODELS

Akhmedova Ugilshod Musurmonkul kizi
PhD student at the Research Center “Scientific Foundations and Problems of the Development of the Economy of Uzbekistan” at the Tashkent State University of Economics
ORCID: 0000-0002-2253-077X
E-mail: [email protected]
Abstract. This article discusses microfinance organizations and their models. Microfinance organizations are considered in two separate directions – traditional and Islamic microfinance models. Among the traditional microfinance models, Grameen bank model, rural banking model, credit union, self-help group model, rotating savings and credit association models were considered as the most common models. Islamic microfinance models are divided into two main forms: profit-based (commercial) and charitable (non-commercial). In the profit-based model, a microfinance organization raises initial funds based on musharaka, mudaraba, wadia, and sukuk instruments. In the charity-based model, it raises initial funds based on waqf, zakat, and sadaqa instruments. The study theoretically examines and comparatively analyzes the types, activities, services, and products provided by these models, as well as other specific features.
Keywords: microfinance models, Islamic finance instruments, Grameen bank model, rural banking model, credit union, self-help group model, rotating savings and credit association.