Abstract
The purpose of this study is to review the Islamic microfinance model that best suited the bottom of the wealth pyramid (B20) communities in Malaysia. Islamic microfinance products and services that are friendly to the B20 communities are crucial to ensure they are not lacking behind from the current development where everybody has access to the financial services. Most current Islamic microfinance products use debt-based financing that similar to the banking products. These products are not suitable to the B20 communities because it creates debt and burdens them to pay back the financing. Therefore, this paper reviews the potential of equity-based financing models that suit to the B20 communities. The study reviews past literature obtained from scholarly databases including Web of Sciences, Scopus, and Google Scholar. In addition, data from microfinance providers are also collected through their website, news published, and bulletin. The findings reveal that equity-based financing via musharakah mutanaqisah seeing as the innovative Islamic microfinance model that suit to the B20 communities compares to debt-based financing.
Highlights
World Health Organization (WHO) has declared COVID-19 as a pandemic on 11 March 2020
Islamic microfinance products and services that are friendly to the bottom 20 percent (B20) communities are crucial to ensure they are not lacking behind from the current development where everybody has access to the financial services
Islamic microfinance is an alternative to the conventional microfinance that still not fully utilized especially to the B20 communities
Summary
World Health Organization (WHO) has declared COVID-19 as a pandemic on 11 March 2020. As of 3 January 2020, a total of 44 patients with pneumonia of unknown cause have been reported to WHO by the national authorities in China. The disease is referred to as coronavirus disease 2019 or COVID-19, and the causative virus is called severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) by WHO on 11 February 2020 (WHO, 2020). It is a new strain of coronavirus that has not been previously identified in humans. The outbreak was declared a Public Health Emergency of International Concern on 30 January 2020. The COVID-19 is affecting 222 countries and territories around the world including Malaysia as of July 2021 (WHO, 2021)
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