Islamic Microfinance: An Overview and Prospects in Pakistan

This paper will highlight the significance importance of the Islamic microfinance working in Pakistan as well as across the world. In 2007, the Great economic damage the global economy of the world including United States, European Union as well as Asia, it made the researcher to study about the alternate system in the replacement of Conventional Financial System, after that study and research they recognized that there is no concept of interest in Islamic Financial System, it is totally based on asset-based system, this recognition shift their area of interest from conventional financial system to Islamic financial system. Islamic financialSystem plays a significant role in economic growth of a country through accumulation of deposits and providing the plate form of financing to speed up economic activities. In the last two decades, the traditional microfinance is replaced by the Islamic microfinance in Pakistan as well as in the whole world. This paper will highlight the working methodology of Islamic microfinance models and institutions that how these Islamic microfinance institutions working asan interest free sector in Pakistan and in the world. The paper is also highlighting the difference between conventional micro financing and Islamic micro financing that what are the models and functions that differs the Islamic micro financing from the traditional micro financing.

A Comparative Study of Islamic Banking in Pakistan: Proposing and Testing a Model

This study examines the relationship between service quality, customer satisfaction and bank performance by conducting a comparative analysis of Islamic banks and conventional banks in Pakistan. Inception of Islamic banking in Pakistan has created multiple challenges for banking industry. Pakistani banking industry consists upon Islamic and conventional banks that are competing for more and more customers by delivery of quality services to have satisfied customers for better performance. On the basis of theoretical background, a model is proposed and tested in Pakistani environment. A structured questionnaire has been developed for the study in the light of the existing literature. Data were collected from 1440 respondents by self-administrated questionnaire by using stratified sampling. A number of tools e.g. SPSS and VPLS etc. are used for data analysis. A set of statistical techniques e.g. T-test, Regression analysis, Correlation and Structural Equation Modeling are applied by the researcher to test the hypotheses of the study. The results indicate a strong positive relationship between service quality and customer satisfaction in the banking sector of Pakistan. Findings shows that service quality and customer satisfaction have weak influence on performance of banks. The study has a number of implications for bankers, policy makers and academicians. Key Words: Islamic Bank, Conventional Bank, Riba, Service Quality, Customer Satisfaction, Bank Performance, Pakistan, Banking Sector.