There are reports in the Sunnah which indicate that circumcision for women is prescribed in Islam. In Madeenah there was a woman who circumcised women and the Prophet (peace and blessings of Allaah be upon him) said to her: “Do not go to the extreme in cutting; that is better for the woman and more liked by the husband.” Narrated by Abu Dawood (5271), classed as saheeh by Shaykh al-Albaani in Saheeh Abi Dawood.

Female circumcision has not been prescribed for no reason, rather there is wisdom behind it and it brings many benefits.

Mentioning some of these benefits, Dr. Haamid al-Ghawaabi says:

The secretions of the labia minora accumulate in uncircumcised women and turn rancid, so they develop an unpleasant odour which may lead to infections of the vagina or urethra. I have seen many cases of sickness caused by the lack of circumcision.

Circumcision reduces excessive sensitivity of the clitoris which may cause it to increase in size to 3 centimeters when aroused, which is very annoying to the husband, especially at the time of intercourse.

Another benefit of circumcision is that it prevents stimulation of the clitoris which makes it grow large in such a manner that it causes pain.

Circumcision prevents spasms of the clitoris which are a kind of inflammation.

Circumcision reduces excessive sexual desire.

[...]

The female gynaecologist Sitt al-Banaat Khaalid says in an article entitled Khitaan al-Banaat Ru’yah Sihhiyyah (Female circumcision from a health point of view):

For us in the Muslim world female circumcision is, above all else, obedience to Islam, which means acting in accordance with the fitrah and following the Sunnah which encourages it. We all know the dimensions of Islam, and that everything in it must be good in all aspects, including health aspects. If the benefits are not apparent now, they will become known in the future, as has happened with regard to male circumcision – the world now knows its benefits and it has become widespread among all nations despite the opposition of some groups.

Then she mentioned some of the health benefits of female circumcision and said:

It takes away excessive libido from women

It prevents unpleasant odours which result from foul secretions beneath the prepuce.

It reduces the incidence of urinary tract infections

It reduces the incidence of infections of the reproductive system.

In the book on Traditions that affect the health of women and children, which was published by the World Health Organization in 1979 it says:

With regard to the type of female circumcision which involves removal of the prepuce of the clitoris, which is similar to male circumcision, no harmful health effects have been noted.

And Allaah knows best.