CAN ISLAMIC MICRO-FINANCE ALLEVIATE POVERTY? A CASE STUDY FROM SOUTH-EASTERN BANGLADESH

Although conventional microfinance and Islamic microfinance aims to alleviate poverty from the society, the Islamic microfinance follows the Islamic Shari’ah in its operation and helps clients to improve their moral height. This study examines the impact of Islamic microfinance programme of Muslim Aid Bangladesh (MAB) on poverty alleviation in selected villages of south-eastern Bangladesh. Using pre-designed semi-structured questionnaire, a multi-staged sampling survey has been conducted during 19th February to 28th February 2016. Based on different hypotheses, this study revealed that mean business income, mean employment and sources of water for household’s use of experimental group are significantly different from that of controlled group. However, no statistically significant difference were found for household’s expenditure, religious activities and morality, types of sanitation, sources of drinking water and iodized salt consumption etc. Based on these findings, this study suggested that MAB should practice Shari’ah based investment modes properly, offer training on technical issues to improve business performance and on moral and religious issues for spiritual development among staffs and clients. The study also suggested that MAB should provide optimum fund size, monitor business activities of the beneficiaries properly, provide fund on the basis of partnership etc. Finally, this study result would be beneficial to development practitioners in general; and Muslim Aid Bangladesh in particular to take corrective measures for better practices of Islamic microfinance programme.