translating economic down grading

8/6/2019 Translating Economic Down Grading

1/4

Translating Economic Down GradingLivestock through Islamic Microfinance

8/14/2011

Farz Foundation

Farhat Abbas Shah


2/4

Translating Down Grading

Islamic Microfinance to counter current economic crisis

By: Farhat Abbas Shah.

Down grading of Americas credit rating from AAA indicates world

economic recession is aggravating. About ten thousand American

industries have shut down since2003. In equality between extreme

incomes groups is soaring. All these developments emphasize the fact

the interest based economic system has failed to kick start theeconomy. And this has come to the point where political and social un

rest is hitting the economies like United Kingdom. All that is left is a

partnership based system, which Farz Foundation has propounded.

Despite all these eye opening developments, world financial bodies are

clinging to market fundaments. Real Islamic financial model still

provides a middle of the way road to fight the current economic mess.

By engaging the have nots through profit and loss business mechanisma viable solution could be offer. A historic opportunity has been

provided by the economic recession to the Islamic Banks. By making

Islamic banks a little bit flexible for profit and loss sharing great results

could b had.

The fall of credit rating of America unveiled the reality of the claims

about offsetting economic crises by subsidizing banks and imposingcuts on various grounds in different areas of the globe. Here the

importance of twist up economy accentuates the implementation at

a required level. Two and half billion poor people are still an

opportunity to provide a strong foundation to the world economy and


3/4

the asset based microfinance could be an effective tool to achieve the

targeted results. If the financial institutions come with a productive and

unbiased vision, it is not an unattainable goal. Only a one hundred

thousand SME Villages can change the scenario. Partnership with thepoor on profit and loss basis is the core component of the Twist Up

Theory, which can exhibit a great sense of responsibility at grass root

level to keep the world secure. Poor can be utilize positively to create a

productive universe at large by making them partners.

Farz Foundation working with the notion to make available a

precedent, which is still in the process of becoming an Islamic

Microfinance bank , has created over 3200 micro business models by

sustaining the same number of families on profit and loss basis. The

most important point to be made here is that there has not been even

a single default. By taking a risk on profit and loss basis we infect

eliminated the risk factor almost in totality. We actually close the door

of default by creating the stakes of the client.

Farz foundation has introduced a new and structured model of Halalinvestment through livestock. We provide five goats to one poor rural

family. In a course of one year it becomes a flock of 25 goats.

According to this business model the family raising the goats 10 of

goats . Farz Foundation and the investor have an equal share of the rest

of the goats. Mean while the value of the principle goats is doubled in

one year. The next years the male goats are taken out to be sold on

handsome price, while the female goats will again be ready to produce

60 goats. In three and a half year the indicial five goats will become a

flock of at least 150 goats. This simple arithmetic demonstrates a huge

potential of this purely Islamic financial product. What goes without

saying is the fact that there are swear shortage of goat meat in the


4/4

Pakistani Market, which has pushed the price of goat meat to at least $

7 per KG, which is a very high price considering income index of the

majority of the population in Pakistan. All the major agricultural bodies

are waring against swear food shortages in not very distant future. Thistype of economic models simultaneously can help the individuals in

need while give a boost to the agricultural sector which in Pakistan

consist of 60 present of the total economy. This model can help the

African countries also where famon has almost hit a large number of

people of black continent. To have a more crystal view of this Halal

investment model, one can visit CGAP MicrofinanceGateway.

http://www.microfinancegateway.org/p/site/m//template.rc/1.9.51696

translating economic down grading

Documents