Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Islamic Microfinance: How It's Helping Gen Z Entrepreneurs in the UAE

Sun 17 Sep 2023 | 06:11 PM

Generation Z is known for their entrepreneurial spirit, particularly in the UAE, where bright, young people are motivated to do something inspirational. Yet despite their ambition and drive, many Gen Z entrepreneurs face challenges in obtaining financing from traditional banks. For these visionaries, Islamic microfinance for young entrepreneurs in the UAE could be the best solution.

In this article we explore how Islamic microfinance could help Gen Z entrepreneurs of the UAE make their dream come true.

How Islamic microfinance works

The ability for Gen Z entrepreneurs to get financing with Islamic microfinance may be higher than with conventional banks. Mostly because Gen Z has less credit history and not many valuable assets to put up as collateral. Also, the Islamic microfinance for Gen Z entrepreneurs uses a system of profit and loss with shared risk. This follows the principles of Sharia which is dictated by the values and beliefs of the Islamic religion.

The benefits of Islamic microfinance for Gen Z entrepreneurs

Islamic microfinance for UAE Gen Z entrepreneurs comes with loads of benefits such as:

● The UAE government encourages the establishment of entrepreneurial ventures by the youth of the Nation.

● Funding is available from different schemes which includes Islamic microfinance institutions.

● Small finances are available without the need for collateral assets or guarantee.

● Another area how Islamic microfinance helps Gen Z entrepreneur start businesses is by not discriminating against people, even if you are a special needs person.

Success Stories of Gen Z entrepreneurs

The UAE has many home-grown entrepreneurs that have sustainable businesses such as:

● Ahana Kotibhaskar – the 16-year-old is the founder of Saathi, a brand that focuses on women’s hygiene during her more vulnerable time of the month.

● Yzabel Bency Salibio and Ia Qwerl Bency Salibio – the 21-year-old and 18-year-old sisters started Izsa Vintage that promotes thrifting, a sustainable model where clothes in good condition are resold to new owners.

How to get an Islamic microfinance Finance in the UAE

The one million Gen Z who live in the UAE have several financial institutions for finances such as:

● Dubai Islamic Bank (DIB) – the Musharika program involves an agreement to share the capital, returns and risks with the bank. The Mudaraba is provided for startups or existing companies with the profits shared according to the terms set for a pre-agreed period.

● First Abu Dhabi bank (FAB) – while the bank has several Islamic banking options, the Trading and Working Capital, the SME Growth finance that involves a partnership with the Abu Dhabi government and the Sustainable Finance are some good ways to secure finances.

● Emirates Development Bank (EDB) – addresses the needs of startups, SMEs, corporates, and expat owned businesses. There are various funding schemes as well as tie-in with different banks and associations to provide the most benefit to UAE entrepreneurs.


Islamic microfinance is the perfect way for Gen Z entrepreneurs to secure funding for their startup or ongoing business. The finances provided not only adhere to the Islamic beliefs but are also easily accessible. This makes them a viable option for many Gen Z entrepreneurs who see value in sharia-compliant microfinancing.