Channelizing The Zakat of Islamic Banks Profits Towards Islamic Microfinance Institutions: A Case of Pakistan

Abstract

The study proposes a modified microfinance model for Islamic banks (IBs) existing in Pakistan under worldwide accepted Shariah practice. The study is based on an in-depth review of microfinance literature with the ultimate objective of establishing a rationale model for Islamic banking to take part in a microfinance effort. The suggested framework contributes to the scant literature on Islamic microfinance in Pakistan and offers IBs beneficial implications for enhancing their social responsibility duties, promoting the financial inclusion of people with low incomes, and contributing to mainstream economic activities.