Islamic Microfinance as a Tool for Poverty Alleviation: The Case of Bangladesh and Indonesia

2018 Fiscal Year Final Research Report

• Project/Area Number: 16K03765
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Research Field: Money/ Finance
• Research Institution: Ritsumeikan Asia Pacific University
• Principal Investigator: Barai Munim 立命館アジア太平洋大学, 国際経営学部, 教授 (50584017)
• Research Collaborator: SUZUKI Yasushi
• Project Period (FY): 2016-04-01 – 2019-03-31
• Keywords: Islamic Microfinance / Poverty Alleviation / Bangladesh / Indonesia / Efficiency / Mission Drifts / Shari'ah

Outline of Final Research Achievements

The research was devoted to finding the poverty impact of Islamic Microfinance in Bangladesh and Indonesia. The outcome of the study indicates that though both the countries have an overt and covert level of demand for Islamic Microfinance, the Islamic microfinance institutions have not been able to modify the product under the Shariah Law to meet such demand. The outcome also suggests that Islamic Microfinance has failed to reach large segment of the society it was supposed to do. Though the poverty impact of Islamic Microfinance is equivalent to the conventional microcredit, due to limited outreach, the poverty impact of this financial product has also remained limited to a smaller segment of the poor people. The research resulted in a good number of articles published in research journals. The researcher also visited Bangladesh, Indonesia and England for field study and seminar presentations.

Free Research Field

経済学

Academic Significance and Societal Importance of the Research Achievements

This study identifies the efficiency of Islamic microfinance. However, it has not seen expected outreach growth because of 'mission drifts' and lack of innovation. Academics should know these and help the policymakers address the problems so that it could be made more useful to the society.