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The role of Islamic Microfinance in Poverty Alleviation: Lessons from Bangladesh Experience

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  • Dhaoui, Elwardi

Abstract

In the People’s Republic of Bangladesh, the poverty has been a main challenge since the last decades and its alleviation is one of the country’s strategic goals to achieve MDGs by 2015 to fight poverty and improve the standards of living of underprivileged population. Micro and SME financing have been playing important role in poverty reduction by creation a gainful employment opportunities. The Islamic banks and the Islamic windows of conventional banks in Bangladesh should pursue vigorous promotion of Islamic micro and medium scale enterprise (SME) finance, in step with the country's concerted efforts for faster poverty eradication with deeper, wider financial inclusion. This paper determined the role of the Islamic microfinance in poverty alleviation efforts in Bangladesh and how this role can be enhanced. It was intended to establish and recommend Islamic microfinance and its principles that could raise poverty reduction and economic development in the country. Especially, this paper tries to answer the following questions: Can Islamic microfinance help alleviate poverty? Should Islamic finance “innovation” include innovative ways to alleviate poverty? Because an institution is “Islamic” does this mean it has a particular obligation to invest in economic or community development? How does the concept of Islamic microfinance operate to serve the goal of poverty alleviation in Bangladesh? For this purpose, this paper tries to give some possible reflections that help us to develop the analytical tool that may help us to improving the way towards the amplification of the analysis paradigm.

Suggested Citation

  • Dhaoui, Elwardi, 2015. "The role of Islamic Microfinance in Poverty Alleviation: Lessons from Bangladesh Experience," MPRA Paper 63665, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:63665
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    References listed on IDEAS

    as
    1. Nicola Banks & Manoj Roy & David Hulme, 2011. "Neglecting the urban poor in Bangladesh: research, policy and action in the context of climate change," Global Development Institute Working Paper Series 14411, GDI, The University of Manchester.
    2. Ahmed, Syed Masud & Adams, Alayne M. & Chowdhury, Mushtaque & Bhuiya, Abbas, 2000. "Gender, socioeconomic development and health-seeking behaviour in Bangladesh," Social Science & Medicine, Elsevier, vol. 51(3), pages 361-371, August.
    3. Mohamoud-Yonis, Abdiqadir, 2012. "Islamic Microfinance System and Poverty Alleviation in Somaliland," MPRA Paper 68104, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    KEYWORDS: Microfinance; Islamic Microfinance; Poverty; Shari’ah & IMs; Bangladesh.;
    All these keywords.

    JEL classification:

    • G0 - Financial Economics - - General
    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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