Micro Finance

IBS Microfinance is an Islamic based Microfinance service, that have carved a niche for promoting small and medium business establishment against the shortage of fund and lack of support, loan practices through innovative microfinance services unprecedented in the history of Somalia.

Islamic Microfinance is a sector with a great potential to expand. It is estimated that 72% of the population living in predominantly Muslim countries do not use financial services ( Micro world) , for that reason the IBS’s microfinance is intended to fill this gap in Somalia, our Goal is to reach 100,000 customers by the next five years.


IBS Microfinance as a financial inclusion

 

Majority of Somali adult population – do not have an account at a formal financial institution. Financial inclusion efforts seek to ensure that all households and businesses, regardless of income level, have access to and can effectively use the appropriate financial services they need to improve their lives.
Being included in the formal financial system helps people:

  1. Make day-to-day transactions.
  2. Safeguard savings, which can help households manage cash flow, smooth consumption and build working capital;
  3. Finance small businesses or microenterprises, helping owners invest in assets and grow their businesses;

 

BUSINESS MODEL

 

There are two main mechanisms of financial services that International Bank of Somalia (IBS) delivers to customers.

  1. Group-based models, where several entrepreneurs come together to apply for loans and other services as a group, this is known as group solidarity.
  2. Relationship-based banking for individual and small businesses

Ceiling Microfinance Loan Size

 

There is no prior study conducted in Somalia regarding ceiling of loan size suitable for certain customers of microfinance, IBS conducted first research survey upon this issues, the survey covered the three main markets in Mogadishu- Bakara market, Souq ba’ad market and Hamar weyne market, IBS identified two broad categories of customers and their suitable loan Size. Detailed information about the two categories will be under the head of our services.

 

Our Services

 

IBS Bank has designed a range of service to its customers, our services are as follows.

 

1.  Micro-credit : refers to making small credit available to the poor and low-income people to improve and sustain their livelihood. Microcredit extends small loan to self-employed entrepreneurs that generates income allowing them to take care themselves and their families. Majority of the customers who will avail this service will be women, maximum ceiling is $3000.

 

2.  Micro-investment 

The Islamic finance modes are used for short/medium/long-term financing of Small and Medium Enterprises. Despite the fact that these financing modes are all Shari’a-based, they are different in function. Maximum designed ceiling of investment is $15000.

Islamic finance modes available are as below.

    • Murabaha (Mark up % on cost)
    • Mudaraba (Profit & loss sharing ratio)
    • Bai-Muajjal (Differed payment)
    • Salam (agricultural investment for the farmers)

 

3.  Micro-savings : this scheme is dedicated low-income customers to save small amount of funds for future use, there is no minimum balance for this account, and the service also is free.

 

4.  Non-financial services : Non-financial service include Training and consulting to our customers.

 

 

Contact Us

Call - +252 1 865999

Email - info@ibsbank.so
Swift Code - IBOSSOSM

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