2016 Fiscal Year Research-status Report
Islamic Microfinance as a Tool for Poverty Alleviation: The Case of Bangladesh and Indonesia
| Project/Area Number |
16K03765
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| Research Institution | Ritsumeikan Asia Pacific University |
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Principal Investigator |
BARAI Munim 立命館アジア太平洋大学, 国際経営学部, 教授 (50584017)
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| Project Period (FY) |
2016-04-01 – 2019-03-31
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| Keywords | Islamic Finance / Islamic Microcredit / MFIs / Bangladesh / Indonesia / Microcredit Borrowers / FGD / Poverty Alleviation |
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| Outline of Annual Research Achievements |
In FY2016, the focus of the research was on finding the facts of microcredit and Islamic Microfinance of Bangladesh and Indonesia in particular. Towards that end, efforts have been made to find the causes for the emergence of Islamic finance and Islamic microfinance in both the countries. A review of the existing relevant literature that explains reasons for acceptance of Islamic financial products including Islamic microcredit has been made. Not only that, the study tried to create an inventory of experts and institutions engaged in doing research on Islamic Finance in Bangladesh and Indonesia. As a part of it, I visited Bangladesh to conduct an experience survey on the bankers, researchers, academics, policymakers. At the field level, I interacted with ground level borrowers/users of the product. A small Focus Group Discussion (FGD) was arranged in Bangladesh with some stakeholders to get a view on the operational mechanism and borrowers’ benefits of Islamic microfinance. Indeed, these research activities have given significant insight on the research issue. Based on the experience and information gathered during all these research activities, I participated in two international conferences to present findings of the research. Those papers have tried to identify the causes of the emergence of Islamic microfinance in Bangladesh and Indonesia. They also measure the width and depth of reach of Islamic microfinance to individuals, small entrepreneurs, and micro enterprises in both the countries. I am looking for getting a paper published in a reputed journal.
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| Current Status of Research Progress |
Current Status of Research Progress
2: Research has progressed on the whole more than it was originally planned.
Reason
The research is aimed at getting answers to a number of broad questions related to the emergence of Islamic microfinance in Bangladesh and Indonesia, current level of penetration of Islamic microfinance as a poverty alleviation tool, challenges to Islamic microfinance as a potential tool to finance the poor and future policies to make Islamic micro financing an effective tool to alleviate poverty in a cross-country context.
With these objectives in the background, an analysis of my level of progress indicates that I was progressing well with the research activities in AY2016. My field and experience surveys, literature review and FGD have helped me to understand the reasons behind the emergence of Islamic microcredit in both the sample countries, though both the countries have a very strong base of conventional microcredit practice in place. Moreover, the researchers have found out the level of penetration of the financial tools which may play a role in poverty reduction in Bangladesh and Indonesia. Overall, the research has progressed well in the expected line in AY2016.
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| Strategy for Future Research Activity |
For the research, I have a number of planned activities in FY2017. They are as follows:
1. Visiting Indonesia to observe and understand the functioning of Islamic Microcredit. This forms a very important part of the research as this will give a fair idea of similarities and differences, if any, in the functioning of Islamic Microcredit in Bangladesh and Indonesia.
2. Conducting a field survey with a sample of about 30 respondents including individuals, small businesses and microenterprises with a specially designed questionnaire. The survey will aim to get ideas from them on ownership structure, capitalization of the lending bodies, mode of lending, areas of financing, rate of interest, mode of repayments, security coverage of the financial organizations in the business, regulatory body, role and relationship of the government with the financial institutions that deal with Islamic microcredit, and so on.
3. Attending few seminars /conferences in Japan and overseas to present the findings of the study and enhance my knowledge base on this area.
4. Writing research papers on inclusive finance for poverty alleviation and social empowerment of the poor.
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