Islamic Micro-Finance Programme and its Impact on Rural Poverty Alleviation (original) (raw)
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Islamic micro finance programme
Bangladesh launched a shari'ah based micro-ſ nance programme in 1995 under the Rural Development Scheme to uplift the overall socioeconomic standards of rural poor. It covered 0.52 million group members, 94% of whom are females. This paper presents ſ ndings on this experiment using 1,020 responses in a sample survey. Result showed that a signiſ cant of clients have improved their religious observations such as prayers and fasting. Results of the econometric models showed that household income, productivity of crops and livestock, expenditure and employment increased signiſ cantly due to the inƀ uence of changed behaviour and availability of micro-ſ nance. Clients stated that the micro-investment had provided better organisation of their economic activities. Finally, the Islamic micro-investment programme appears to spur more ethical and economically desirable behaviour leading to poverty alleviation.
Effectiveness of Islamic Microfinance in Alleviating Poverty: Empirical Evidence from Bangladesh
International Journal of Science and Business, 2021
Islamic Micro-finance (IMFc) is an evolving technique to empower the deprived and needy population. The present study was intended to investigate the effect of the IMFc on the resources of individuals borrowing from an Islamic microfinance institution and their poverty status. The prime intention of this paper is to justify the effect of IFMc for poverty alleviation. The study reveals that IMFc programs have introduced a positive result on significant numbers of poor. Islamic microfinance has significant impacts on income, savings and expenditure levels of the household. The analysis shows that in general, the Islamic micro finance is an instrument that can help to accumulate savings and income and finally assist to alleviate their poverty. But still it is not only the instrument that can alleviate poverty but it is the vital component that can help to the poor people for standard living levels. Our analysis shows that after taking Islamic finance there is a significant change in the respondents' income savings and expenditures. IJSB
Role of Islamic Micro Finance in Alleviating Poverty in Bangladesh: A Study on RDS of IBBL
International Journal of Financial Research
The goal of this study is to determine the Role of Islamic Micro Finance in Alleviating Poverty, a study on RDS (Rural Development Scheme) of the Islamic Bank Bangladesh Limited. The study employed interview method, descriptive statistics, T-test, Chi-squared test, and multiple regression analysis to investigate a total of 328 samples (RDS borrowers). The sample has been purposefully selected for the study from two districts of Rajshahi division of Bangladesh. The results of our study indicate that in any category having an income level of more than 5001 to 10000, after access to the RDS scheme of IBBL, overall, 72% of respondent’s income increased. In the case of impact analysis of the program on poverty alleviation, the results of the statistical analysis (regression model) revealed that there is a significant impact of the Rural Development Scheme (RDS) on poverty alleviation (P-value-0.000).
Despite being heralded as an acclaimed method for poverty reduction worldwide, the key aspects of traditional microfinance have created a sociological as well as psychological barrier in the Muslim social and intellectual hegemony in Bangladesh. The high interest-based loans, encouraging the poorest population for a shortcut but unstable route for development and the overwhelming focus on women as the beneficiaries of microfinance are few of the many aspects of the problem. The question regarding the effectiveness of microfinance as a tool for social justice is also under serious scrutiny worldwide. At the same time, the concept of Islamic microfinance is slowly taking shape in some Muslim countries including Bangladesh, aiming to solve the strategic problems with microfinance. By rectifying the ideas of microfinance with the general tools of Islamic financial mechanisms in the grass root level with a proper management of the Zakat can accelerate the process of poverty alleviation in Muslim countries. Finding Shariah accepted solutions for the shortcomings of mainstream microfinance and effective implementation of those approaches will be an effective tool for ensuring sustainable development as well as establishing social justice in Muslim world.
An Integrated Approach to Islamic Microfinance for Poverty Alleviation in Bangladesh
Üniversitepark Bülten
The study critically examines the state of the Islamic Microfinance sector of Bangladesh to find its role in addressing poverty. The study constitutes linkage between Islamic Microfinance and Poverty Alleviation. It is a desk-based and libraryoriented research relying on secondary data, structured on research objectives. Islamic microfinance organizations have not yet developed to the expected level in Bangladesh and thus Muslim citizens are compelled to borrow from conventional interest-based lending sources, but many underprivileged and small-scale entrepreneurs feel unable to access funding due to their religious ideology. Islamic concern for the disadvantaged makes it crucial to ensure Islamic microfinance services include their participation in the production process. Due to a lack of Islamic microfinance institutions in Bangladesh, the integration of Islamic microfinance with NGOs, NPOs (non-profit organizations), Zakah, Waqf, and capacity-building institutions to facilitate small-scale financial services to the poor can internalize them into the market mechanism and thereby work as a powerful tool for poverty eradication. This study proposes a new framework that directly addresses Islamic Microfinance and Poverty alleviation in Bangladesh.
Role of Islamic Microfinance in Poverty Alleviation in Pakistan: An Empirical Approach
International Journal of Academic Research in Accounting, Finance and Management Sciences, 2014
After 2008 world economic crises, banks and other financial institutes move towards Islamic financing not only in Muslims countries but also in non-Muslim countries of the world. In view of this, some micro financial institutions also introduce Islamic micro financing products in Pakistan. The present study was conducted to analyze the role of Islamic microfinance to alleviate poverty in Pakistan its impacts, people satisfaction level and assess the future of it in Pakistan. An Empirical approach has been adopted due to lack of knowledge to clients about products, technical terms, lack of time, and we come to know the changing improvement in the eyes of those people who directly involve in this system. Questionnaire was used as a tool for data collection. The qualitative data was quantified and chi-square test was applied to test the association of attributes by 5% level of significance. Our analysis concluded that Islamic microfinance playing an important role to improve the living standard, per capita income, awareness level (Educational level), ethical values, profitability, sustainability, infrastructure position, employment level in the society, helpful to control the inflation and unequal distribution of wealth. People are more interested due to religious prospective and prohibition of riba in Islam as well as in Christianity but there should be proper regularity authority to control over it in order to get fruitful results through an implementable model.
ISLAMIC MICRO-FINANCE AND POVERTY ALLEVIATION: A CASE OF PAKISTAN
INTERNATIONAL JOURNAL OF RESEARCH IN COMPUTER APPLICATION & MANAGEMENT, 2011
This research paper recognizes Islamic micro-finance as an important component in poverty alleviation strategies. While conventional microfinance products have been successful in Muslim majority countries, these products do not fulfill the needs of all Muslim clients. While taking an overview of Islamic microfinance in Muslim countries, this research paper undertakes a case study of Akhuwat, an Islamic microfinance organization operating in Pakistan. Critical financial analysis of Akhuwat indicates that it is providing its services for all living below the poverty line including the “extreme poor” and Interest free loans can be used as a powerful tool against poverty. It recommends that integrating Islamic microfinance with NGOs, NPOs (non-profit organizations), Zakah, Awqaf and with Takaful as well as with professional training and capacity building institutions will enhance the financial statbility of Islamic microfinance institutions and will be helpful to achieving their aim of providing micro financial services to the poorest of the poor under one roof.
ISLAMIC MICROFINANCE: HOW WILL IT HELPINDIA IN POVERTY REDUCTION
Poverty in world is still a major issue even in this day and age. The population of people living below the poverty line in world is astonishing and the problem is not going away. Poverty is general scarcity or the state of one who lacks a certain amount of material possessions or money. It is a multifaceted concept, which includes social, economic, and political elements. Poverty alleviation remains the most important challenge before policy makers in the world that is characterized by high and rising poverty levels. The purpose of this paper is to demonstrate the potential of Islamic Microfinance as an alternative tool for poverty alleviation. While poverty is a common problem faced by all countries, the efforts and actions has not reached the purpose yet. Still, it calls more attention from majority of government and development oriented organization to alleviate it in an effective and comprehensive approach. We focus on basic tenants of the Islamic ethical system and treat the Islamic ethos as an ideal, through which socioeconomic policies dealing with poverty elimination are assessed. Islam views society as a unified equity in which individual freedom and human dignity is supreme although subject to the axiom of responsibility. In Islamic perspective, poverty is not just viewed from material aspect but also moral/spiritual, thus, any poverty alleviation strategy should reflect on both aspects. It might be argued that while conventional approach on poverty left the importance of committing to moral/spiritual, Islamic approach has more attention on that aspect. Islamic microfinance, having a unique feature compare to the conventional counterpart, offers apotential solution to poverty alleviation.
Islamic Microfi nance As a Tool of Financial Inclusion in Bangladesh
Though Bangladesh has achieved worldwide recognition as a star performer in interest based conventional microfinance programs, she is lagging behind exploring full potentials of Islamic microfinance to promote financial inclusion among unbanked people aiming at poverty and inequality reduction. The experience of poverty programs of NGOs during the last three decades reveals that they have, in general, been successful in serving the moderate poor but failed in reaching the extreme poor mainly due to higher rate of interest and operational cost, lack of customized products and reluctance of religious people to participate in interest based programs. Given this, the present paper focuses on concepts and models of Islamic microfinance and its effectiveness as a tool of financial inclusion in Bangladesh. The paper suggests necessary policy options for combating challenges in order to build a vibrant Islamic microfinance market to cater the demands of all categories of poor, extreme poor in particular.
Journal of Business & Tourism
The aim of this research is to investigate role of Microfinance in Poverty alleviation. Primary data was used in this research and was collected through personally administered questionnaires from 150 respondents. Results showed that most of the respondents were in favor of the Khud Kafalat scheme because it helped them in increasing their living standards and standard of education of their children due to establishing small scale businesses or expanding existing businesses. Moreover, Khud Kafalat Scheme has a very important role in Poverty alleviation and increased their gross monthly income. Furthermore, their satisfaction can also be depicted from the fact that although they observed no change in their employees’ condition but on individual level, most of them, were still in favor of applying again for the loan, if needed, in the future.