6. Islamic Finance and Microcredit

A brief mention should be made at this point of microcredit and Islamic finance, which, due to the principles they inspire, are well suited to the discussion of the ethical issue. The topic of Islamic finance in Italy is widely discussed in the works of Banca d’Italia (2010), D’Arienzo (2012), Biancone (2012, 2020), Salvi and Miglietta (2013), while at the international level we remember the studies of Ahmed (2011), Hayat and Malik (2014) and Nienhous (2011). Our aim here is to provide an overview of the topic, which is hard to cover in its entirety in a single chapter. The reason is simple: there are many types of contracts in Islamic finance. There is no homogeneity of thought on what is considered legal/illegal because Islamic finance rests on the laws of Allah, so on the different possible interpretations of the Koran. Consequently, we are going to try to offer an impression, focusing on the most important contracts which can be compared to some extent with Western finance. As Islamic finance also includes forms of microcredit, and since microcredit originated in Bangladesh—where Islam is the state religion—the chapter is divided into two parts. A first section deals with microcredit proper (origins, founder, use), while a second section focuses on Islamic finance in its main applications, which include finance for the poorest segment of the population.