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Islamic Microfinance and Sustainable Development Goals (SDGs): Evidence from Bangladesh, Malaysia and Turkey

Author

Listed:
  • Norma Md Saad

    (Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia)

  • Adamu Ahmed Wudil

    (Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia)

  • Md Nazim Uddin

    (Department of Business Administration, Ankara University, Turkey)

  • Yusof Bin Ismail

    (Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia)

Abstract

This study examined the impact of Islamic microfinance though its Islamic, social, and ethical goals, adoption of profit and loss sharing (PLS) modes (Musharakah, Mudarabah), non-PLS modes (Murabahah, Ijarah) and charity-based financing modes (Zakat, Sadaqah, Qard al-Hasan) on Sustainable Development Goals (SDGs). In addition, it examined the impact on household income, enterprise development as well as program and practice. This study utilized a quantitative research design to evaluate the impact of Islamic microfinance on achieving SDGs in Bangladesh, Malaysia, and Turkey. Responses were obtained from 367 participants, comprising of beneficiaries of Islamic micro-finances in the three selected countries, using a structured questionnaire developed and administered through Google Forms. The findings reveal that profit-and-loss-sharing (PLS) mode of Islamic microfinancing promote SDGs while other modes such as non-PLS and charity-based financing show limited contributions due to operational inefficiencies and short-term focus. Household, enterprise development as well as program practice impacts highlight the need for scalable and systemic interventions, as their current implementations do not consistently translate into broader SDGs achievements. Based on the findings of the study, the study recommended that Policymakers should encourage the adoption of PLS contracts, supported by regulatory frameworks that mitigate moral hazard and adverse selection problems in Islamic microfinancing.

Suggested Citation

  • Norma Md Saad & Adamu Ahmed Wudil & Md Nazim Uddin & Yusof Bin Ismail, 2025. "Islamic Microfinance and Sustainable Development Goals (SDGs): Evidence from Bangladesh, Malaysia and Turkey," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(15), pages 1-14, January.
    • Handle: RePEc:bcp:journl:v:9:y:2025:i:15:p:1-14
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    References listed on IDEAS

    as
    1. Asyraf Wajdi Dusuki, 2008. "Understanding the objectives of Islamic banking: a survey of stakeholders' perspectives," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 1(2), pages 132-148, June.
    2. Asyraf Wajdi Dusuki, 2008. "Understanding the objectives of Islamic banking: a survey of stakeholders' perspectives," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 1(2), pages 132-148, June.
    3. Mohamed Ali, Khalifa, 2014. "Integrating Zakah, Awqaf and Islamic Microfinance for Poverty Alleviation: Three Models Of Islamic Micro Finance," Working Papers 1435-19, The Islamic Research and Teaching Institute (IRTI).
    4. Usman & A. S. & Tasmin & R., 2016. "The Relevance of Islamic Micro-finance in achieving the Sustainable Development Goals," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 6(2), pages 1115-1115.
    5. repec:eme:hppsss:h-08-2016-0066 is not listed on IDEAS
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