Pathology of Micro-finance in the banks of Iran:Lessons for designing Islamic Micro-financing System in Iran

Micro- finance (Microfinance) can be described as a tool to extend various financial services to lower income groups. Since this group of people has a low credit-worthiness، they are not regarded as good borrowers by banks and other conventional financial institutes. On the other، one of the main missions of Islamic banks is providing small loans for vulnerable groups in society. However، banks typically prefer to devote their resources to macro activities and avoid providing small loans and do not give importance to this section. This study tries to offer a pathological analysis of this bank behavior that، in turn، is the first step to design Islamic micro-financing system. The results which were obtained through using the Delphi method and analytical- descriptive method show that moral hazard، high cost of supervision، lack of proper mortgage، diversion of funds، strategic default، low productivity and lack of resources are the main challenges of microfinance in Iranian banks.