As many as 47 percent plan on retiring late to ease the financial burden. Traditional banking may not be always the best option for securing small loans due to high interest rates making Islamic microfinance a better solution for Generation X who is facing heightened financial stress due to the high cost of living, stagnant wages, and job competitiveness.
By offering access to small loans, Islamic microfinance can help alleviate some of the financial stress faced by this generation.
In this article we explore how Islamic microfinance could help Generation X individuals in the UAE overcome financial challenges.
Islamic Microfinance Explained
Microfinance is a financial service catering to low-income individuals or groups who would normally not be eligible for normal banking services. While traditional microfinance institutions work on an interest-based business model, the Islamic microfinance for Generation X works on profit and loss sharing model.
Islamic Microfinance Advantages for Gen X
With the growing Generation X financial challenges in the UAE, Islamic microfinance offers the maximum benefits such as:
- Offers a low-cost solution to ease financial burdens.
- Fosters a system of inclusion and access to finance for all.
- Through the Islamic microfinance for UAE Generation X schemes, individuals are motivated to take more control over their finances.
- Promotes entrepreneurial ventures through working capital or startup funds.
Gen X Entrepreneurs' Triumphs
It might seem like an impossibility to overcome the financial challenges, yet many Generation X individuals have taken the plunge and become financially independent. By getting funds when it was needed, many of these prominent entrepreneurs were able to establish themselves, in the process etching a name in the UAE entrepreneurship.
Some of these prominent people are:
- Stevi Lowmass - founder of The Camel Soap Company.
- Peter Davos - founder and CEO of Hale Education.
- Mustafa Koita - founder and CEO of Koita Organic Foods.
Securing Islamic Microfinance Loans in the UAE
Procuring Islamic microfinance for middle-aged individuals in the UAE depends on a few factors like the reason behind the loan, if it is a business loan, is it working capital or startup fund. Also, your status in the UAE is important as UAE nationals also get financial support from the government.
First Abu Dhabi bank is a good example of how Islamic microfinance helps Generation X individuals. The bank has designed several Islamic finance solutions catering to different needs. Additionally, the bank has made several strides in partnership with leading microfinance institutions like the Emirates Development bank.
One prominent collaboration is with the Abu Dhabi Government for the Abu Dhabi SME Growth Loan scheme that has key features like:
- Open to LLC, FZE, Sole Proprietorship, Partnerships and Branches of foreign companies operating from Abu Dhabi
- Working capital available for three months.
- Longer term loan tenor of 4 years.
- Below the average market rate.
For Generation X individuals facing financial difficulties, Islamic microfinance might be the best way to overcome these challenges. Not only does it provide access to small loans, but these loans follow the tenets of sharia, helping individuals who are preferring profit-lose sharing finance offered by banks. This can lead to more savings and better prospects for Generation X individuals.