This document summarizes an Islamic microfinance program called Murabaha run by the National Rural Support Program (NRSP) in Pakistan. The NRSP is a non-profit organization that provides microcredit and development services to over 500,000 households. The Murabaha program provides Sharia-compliant financing for purchases like livestock, agriculture equipment and small businesses. Clients work with an officer to purchase items and pay back the cost plus profit over time. Over 700 clients have received over $140,000 in financing through the Murabaha program since 2007. The program has helped expand access to financial services in a way that complies with Islamic principles prohibiting interest.

3. ISLAMIC MICRO FIANANACE PROGRAM MURABAHA NATIONAL RURAL SUPPORTPROGRAM NRSP Khyber Pukhtoon khwah Region PAKSITAN Presentation by: Niaz Ali Khan Program Officer NRSP Pakistan

17. Program Total updates Particulars Detail Program area (union councils) 12 Total Murabaha clients 792 Total Portfolio 142.6 M Average Purchase per case Rs 17929 Recovery rate 93.3 %

18. Sector wise Disbursement Enterprise : Consumer goods, House material, raw material, equipment, carts, Small machineries, tools, Windows and doors, Bricks, Cements, T.iron, Motor vehicle tyres, and several other items. NRSPMARDAN Sectors cases Amount Enterprises 448 7.94 Agri, Inputs 122 2.22 M Live stock 222 4.10 Total 792 142.6

19. Sector wise purchases

20. Risk in Mitigation in Murabaha Risks Risk Mitigations Shariah complaint Murabaha Shariah adviser monitor Murabaha activities, staff training, COs work shops and meetings Client needs cash All purchases are done through procurement officer and price is paid to suppliers Through order or crossed Cheque. Client refuse to purchase Wada Murabaha (Promise) Risk of Losses Immediate supply to client Payment to Supplier Order cheque, cross cheque in presence of client Default Risk Religious Motivation, Social Collateral, Clear role of guarantors, Death of Client Islamic Insurance (Takaful) under process

25. Thank You CENTER OF ISLAMIC BANKING & ECNOMICS Head Office: 192- Ahmad Block, New Garden Town , Lahore, Pakistan Ph: +92-42-35913096-8, 35858990, 38407850 Fax: +92 -42-35913056 E-mail : [email_address] Web: http://www.alhudacibe.com