CHALLENGES ISLAMIC MICROFINANCE INSTITUTIONS FACED IN SAUDI ARABIA

Abstract

In the recent years, the popularity of Islamic finance has enhanced due to its the remarkable advancement. However, one of its subsectors, Islamic microfinance, requires further improvement in implementation, particularly in Saudi Arabia. This is because, at the moment, Islamic microfinance is facing enormous challenges and needs to be identified for future development purposes. Therefore, this study was done to analyze challenges facing Islamic micro-finance in Saudi Arabia. This study was executed using quantitative research method. The sample populations of this work were employees in Islamic Development Bank (IDB) and the sample size were 20 employees. Data collection was done using survey questionnaire. The findings of this work have shown that Saudi Arabia is applying IMF projects effectively and the financial institutions are putting effort to develop IMF projects in Saudi Arabia. Nevertheless, the findings of this work have shown that IMF projects are hard to be applied in Saudi Arabia. This is due to lack of knowledge and background of microloans for those who take the loans. Furthermore, the findings have shown that government policies and lack of awareness of micro-loans in Saudi Arabia is presenting as a challenge. Thus, the respondents have recommended in having special workshops for micro loaners.