Success Factors of the i-Taajir Micro-Entrepreneurship Model: Lessons for Islamic Banks and Muslim Universities

There has been increasing interest in Islamic financial inclusion from scholars as well as from practitioners in the industry. Several models have been proposed for empowering the poor, particularly women. The recent FinTech revolution has created more opportunities for financial inclusion of the youth. The roles of universities in the development of financial inclusion have largely been theoretical with few exceptions like the University of Houston in Texas and Gontor University in Indonesia. The former has a microfinance unit that offers zero interest loans, while the latter creates businesses on the campus exclusively for its students and staff. This chapter focuses on the i-Taajir program, which began operations in 2018, whose uniqueness and rich experience has not been documented. Firstly, it is a synergy between CIMB Islamic CSR funding and expertise from the International Islamic University Malaysia (IIUM) Centre for Islamic Economics. Secondly, it involves IIUM students as field trainers, monitors and project evaluators as a cost-cutting measure and risk-mitigating strategy. Thirdly, i-Taajir offers four financing modes: Qard Hasan embedded with Tabarru’ Fund for sustainability, Murabahah to the purchase orderer, Musharakah Mutanaqisah working capital and Mudarabah. Fourthly, its success factors are benchmarked against its grassroot approach; value loaded training programs; over 95% repayment rate; cheap pricing on the asset side, which does not vary with time; clear graduation target and bridging the gap between theory and practice.