Islamic Finance

Food security in Islamic countries could improve with women at heart of financial inclusion agenda

Photo for illustrative purposes only. Villagers scatter wheat seeds on a field during planting season in Falluja, 50km (30 miles) west of Baghdad, November 22, 2007. REUTERS/Mohanned Faisal

Integrating women’s financial inclusion into the Islamic finance agenda for the agricultural sector will go a long way to address food security, writes Maram Ahmed, a Visiting Fellow at SOAS, University of London.

Food security is a pressing issue. By 2050, according to the World Bank, the demand for food is projected to increase by 70 percent with an estimated $80 billion of annual investments needed to meet growing demand.

At the United Nations COP24 global climate summit that ended on Saturday, the effects of climate change on food production made headlines but less talked about are the producers of food, who are predominantly women.

Rural women are the backbone of food production and play a key role in ensuring food security.

A substantial number of the world’s farmers are women but they are often financially undeserved, which sets back agricultural output.

In Sub-Saharan Africa and South Asia 60 percent of agricultural workers are women, according to UN Women. This is followed by 30 percent in the rest of Asia & the Pacific/North Africa and 20 percent in the Arab States.

However, a lot fewer women than men have access to a formal bank account. In Africa alone, only 20 percent of women have at least one formal bank account compared to 75 percent for men, according to the African Development Bank.

Governments, non-governmental organisations (NGOs) and financial institutions have a collective role to play in ensuring that women are taken off the financial sidelines with the agricultural sector being the lowest hanging fruit.

Agriculture is a great starting point to support Organisation of Islamic Cooperation (OIC) countries achieve the ambitious 2030 agenda for sustainable development as stipulated by the United Nations. 

For the Muslim-majority countries of the OIC hoping to achieve the Sustainable Development Goals (SDGs), unlocking the potential of Islamic finance could be key to increasing financial inclusion among women agricultural workers, and improving food security.

Up to now, the gender and Islamic finance dialogues often occur in parallel.

However, the Shariah-compliant sector can be the nexus between the two by taking a feminist approach to development.

One way to do that is through integrating women’s financial inclusion into the Islamic finance agenda.

What can be done? Among the huge scope for Islamic finance, experience suggests at least two possible local solutions with the Republic of Kazakhstan being a case in point.

The Central Asian country is rich in natural resources and is one the world’s top exporters of wheat.

Although the country is rapidly developing, it has a vast rural population with often limited access to traditional modes of financing. As such, microfinance institutions (MFIs) have been operating in the country since the former soviet state gained independence in the nineties.


In 1997, the MFI Asian Credit Fund was established by international relief and development organisation Mercy Corps to extend loans to both individuals and businesses in rural and semi-rural areas in Kazakhstan. As of last year, 85 percent of active borrowers were women.

Through taking a strategic approach to lending, the MFI actively targeted rural women realising that investing in them empowers them economically and also strengthens their ability to run their farms more efficiently.


While conventional microfinance was principally serving rural communities, Islamic microfinance was introduced to Kazakhstan in 2011 through the “microfinance to rural areas projects” by the state-owned Fund for Financial Support of Agriculture (FFSA).

83 percent of the initial project costs came from the Islamic Solidarity Fund for Development (ISFD), which is the poverty alleviation arm of the Islamic Development Bank.

According to IFSD, the financing was designed based on murabahah, the cost-plus-profit structure.

60 percent of proceeds received from the financing was used to acquire farming machinery and equipment such as tractors while the other 40 percent was to acquire equipment such as vehicles and freight transportation as well as the purchase of cattle.

The owning of tractors enabled farmers to carry out their work more efficiently therefore improving yields and the overall agricultural value chain.

Interestingly enough, one of the conditions set at the outset of the project was women should be no less than 50 percent of financing recipients.  


The case of Kazakhstan demonstrates two key lessons.

Firstly, addressing and removing the barriers rural women face by giving them improved access to financial services yields profound results.

Secondly, the introduction of Islamic microfinance allowed rural communities—at least 50 percent of which were women—to get access to financing to purchase much-needed equipment which previously was difficult because of lack of collateral.


The challenge is how to scale up to have a larger global impact.

In order to realise the United Nations’ Sustainable Development Goal (SDG) number 5 “achieve gender equality and empower all women and girls”, we need to build and develop inclusive economies and societies.

We still have a long way to go to achieve gender equality and no more is the gender disparity evident than in the agricultural sector.

UNFAO finds that increasing female farmer productivity in Africa by 20 percent can lead to 150 million fewer hungry people. The statistics speak for themselves.

Policies and actions to enhance food security would be far more effective if they address gender inequalities, with finance being a key component.

The Islamic finance industry needs to do more by providing innovative financial tools for agricultural purposes and putting rural women at the forefront.

Such an approach would likely have knock-on effects throughout the whole economy and positively affect the ability of rural women to produce more food, in turn enhancing food security.

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Food Security
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Maram Ahmed