ILIGAN CITY — Stakeholders are increasingly promoting Islamic microfinance as a viable solution to financial exclusion in the Philippines, following a recent capacity-building workshop held at Mindanao State University–Iligan Institute of Technology (MSU-IIT).
The “Workshop on Developing an Islamic Scheme for Microfinance,” conducted on March 31, brought together participants from academia, the banking sector, and cooperatives. The event was organized through a collaboration between Universitas Muhammadiyah Yogyakarta (UMY), MSU-IIT, and the MSU-IIT National Multi-Purpose Cooperative (NMPC).
Associate Professor Sittie Noffaisah Pasandalan, assistant dean of MSU-IIT’s College of Arts and Social Sciences, highlighted that limited public awareness remains a major barrier to the growth of Islamic microfinance in the country. She emphasized that stronger research engagement could help position it as a credible alternative financing system.
“Students and researchers can explore Islamic microfinance as a potential financial scheme for Filipinos. Through research, we hope to generate greater interest and understanding,” Pasandalan said.
She added that their group plans to collaborate with government agencies, including the Cooperative Development Authority and the Bangko Sentral ng Pilipinas, in the coming year. They also aim to support cooperatives in developing Islamic finance-based products and services.
From the cooperative sector, Dr. David N. Almarez, vice chairperson of MSU-IIT NMPC, shared that their organization is strengthening its operations to better serve members. He noted that larger cooperatives are better positioned to offer a wider range of services.
“Our cooperative already practices principles similar to Islamic financing. What’s needed is adaptation—aligning with Islamic banking terminology and frameworks—for the benefit of our member-owners,” he explained.
Professor Rizal Yaya, UMY program coordinator and accountancy professor, underscored that Islamic finance is designed to serve low-income individuals as well as small and medium enterprises while adhering to Islamic principles. He pointed out its potential to address financial exclusion in the Philippines.
He also cited Indonesia as an example, where Islamic banking has contributed to economic stability during financial crises.
“Islamic finance can enhance economic stability and provide effective solutions for financial inclusion, particularly for underserved communities,” Yaya said.
Jalani M. Ramos, manager of the Al-Amanah Islamic Investment Bank of the Philippines in Iligan, noted that the bank currently operates nine branches nationwide. He shared that the institution actively promotes Islamic banking through partnerships and educational initiatives.
“Through our charity fund and outreach programs, we provide financial literacy and raise awareness that Islamic banking services are available in the Philippines,” Ramos said.
Meanwhile, Shari’a lawyer and halal advocate Dr. Leonilo Go Paulin Jr. emphasized that awareness remains a key challenge, even among Muslim communities who are more familiar with conventional banking systems.
“There is a need for widespread public education so people can understand Islamic finance concepts. This will encourage both Muslims and non-Muslims to support and adopt Islamic banking,” he said.
Participants from the cooperative sector expressed strong interest in adopting Islamic finance models. Veronikka Aynne J. Quiamco, marketing manager of MSU-IIT NMPC, described the training as impactful and inspiring.
“We aim to be among the first cooperatives to implement Islamic financing,” she said, adding that they plan to introduce policies for savings products and other services within the year.