How It Works

Hiba.org lets you provide the active poor (Strivers) with ethical, interest-free microfinancing through a network of not-for-profit field partners leveraging "Islamic microfinance". As Strivers achieve their goals, they repay you, allowing you to help others in a virtuous cycle.

Why Hiba.org

Hiba.org aspires to disrupt the way we engage in philanthropy. We do this in 2 ways i) promoting lending vs donating and ii) supporting Islamic microfinance as a poverty alleviation tool.

There are countless nonprofits to whjich you can donate to serve various social missions. In most cases, donations are exactly what is needed to achieve the intended social impact. Hiba.org promotes lending as an alternate means of philanthropic engagement, one that is both more sustainable and also highly impactful in terms poverty alleviation.

Muslim communities are some of the world's poorest today, with 68% of the world's refugees being Muslim, according to UNHCR. Poor Muslim communities are underserved by financial services. And even if they are, many opt out of for religious reasons. According to CGAP, 20-40% of people in the Syria, Jordan, and Algeria cite religious reasons for not participating. There is a dire need to promote Islamic microfinance to serve these communities, and Hiba.org does so by partnering with Islamic microfinance institutions. 

Islamic Microfinance

Overview of microfinance

Microfinance is about providing relatively small amounts of financing to the poor who are typically excluded by banks because they are too poor and do have collateral to secure loans.  Microfinance, when done right, is an effective poverty alleviation tool for a segment of the poor.

Issues with conventional microfinance

How Islamic microfinance is different

Our field partners focus on Islamic microfinance, which have the following unique characteristics:

  1. Contracts are interest-free, appealing to those who avoid it for religious reasons or for fear of being stuck in a debt cycle
  2. Contract terms are more equitable to the beneficiary, with the field partner sharing in asset risk and business activity
  3. Aggressive debt collection is prohibited in Islamic microfinance. 
  4. The business activity of the Striver cannot have an associated social harm. e.g., a cigarette shop

Contracts used by our field partners

The most commonly used Islamic microfinance contracts by our field partners are:

  • Deferred sale: Field partner assumes asset risk and sources and re-sells it for a profit to the Striver on deferred payment basis
  • Equity investment: Field partner invests in the Striver's business in a profit-and-loss sharing model
  • Charitable loan: Field partner provides interest-free loans as act of charity, although unsustainable in the long run given amount of investment required in Strivers from a coaching and guidance perspective. 

FAQ