Top PDF Integration of waqf-Islamic microfinance model for poverty reduction: the case of Bangladesh

Integration of waqf-Islamic microfinance model for poverty reduction: the case of Bangladesh

Integration of waqf-Islamic microfinance model for poverty reduction: the case of Bangladesh

Another study by Ahmad (2007) emphasizes on poverty, justice and equitable distribution of income in Islamic economics. The Islamic financial sector should cover the underprivileged people who have neither the bargaining power nor the access to the existing financial institutions. This justifies the need for the Islamic financial sector to involve in social intermediation. And, of course, the MFIs that provide support to micro-entrepreneurs need to be extended by both financial coverage and outreach in a wider scale. The Islamic banks also follow the conventional bank in terms of their credit selection criteria; in most cases, relatively large firms are selected where small firms are neglected. The author examined the basic model of a waqf-based Islamic MFI which is sustainable in the long term. IMFIs also face the challenges of mismatch in their assets and liabilities. An empirical study in Bangladesh shows that the growth and the efficient operation of IMFI are hampered due to its fund inadequacy (Ahmed, 2002). Despite the availability of local sources of fund, IMFIs are unable to receive the amount from local sources, as they violate the Islamic principles. Investment at fixed rate that ensures fixed returns cannot be used under Islamic microfinancing by following mudharabah and musharakah principles. The author has identified many other obstacles that originate from the fund shortage, such as hiring insufficient number of workers, lack of proper supervision and monitoring, low productivity of field worker due to low wage, quitting from IMFIs, etc. All of these eventually lead to defaulting of loan and lowering the expected income of the institutions. Waqf-based IMFIs can go a long way to resolving most of these problems.
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Integrated Waqf-Islamic Microfinance Model (IWIMM) for poverty reduction: case studies of Nigeria, the Sudan and Pakistan

Integrated Waqf-Islamic Microfinance Model (IWIMM) for poverty reduction: case studies of Nigeria, the Sudan and Pakistan

4. Most of the clients if not all have only basic education so the concept of microfinance might be a little sophisticated to them so the duty of NGOs like microfinance is to educate, train and draw awareness to the concept. NGO’s usually take the trouble of organizing the necessary documents of the client making sure everything is in order.

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

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

Grameen system helps the borrowers to build their own pension funds, and other types of savings. In case of death of a borrower, Grameen system does not require the family of the deceased to pay back the loan. There is a built-in insurance program which pays off the entire outstanding amount with interest. No liability is transferred to the family.” The points of departure perhaps push Grameen very close to Islamic ideals. It appears that with some modification, especially with a financial engineering approach to development of Shariah-compliant products, the Grameen model has all the potential for eradication of poverty from Muslim societies in a manner that is compatible with Islamic Shariah – both in letter and spirit.
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Microfinance and Poverty Reduction in Nigeria: A Case Study of LAPO Microfinance Bank

Microfinance and Poverty Reduction in Nigeria: A Case Study of LAPO Microfinance Bank

With the widely acclaimed success of the Grameen microfinance model in Bangladesh in the late 1980s, several Grameen-like non-governmental organisations (NGOs) began to emerge in different communities across Nigeria during this period. These NGOs were committed to addressing the problem of poverty or some other social ill particularly among women in rural areas through the supply of affordable financial, health and social empowerment services. However, over time for majority of these NGOs, microfinance emerged as the primary services provided. Through institutional restructuring, the provision of non-financial activities was separated from financial services as sister organizations were set up to implement the former. Some early NGO MFIs include the country women association of Nigeria (COWAN), NALT united self-help organization (NUSHO), lift above poverty organization (LAPO), development exchange centre (DEC) and community development foundation (CDF). Particularly, support from donor agencies and the existence of a support network among these NGOs led to a rapid rise in their development. Donor support came in the form of subsidized credit, grants, training and technical support and institutional development from Ford Foundation, UNDP, Grameen Foundation, Oxfam-NOVIB amongst others. For instance, between 1993 and 2004, the Ford foundation provided capacity building grants worth NGN 19 million to 241 organisations and refinancing loans worth NGN 205.4 million to 241 organisations (Ehigiamusoe, 2011). As discussed in section 3.3, this period coincides with the second wave of attempts to provide financial services to the poor. With the understanding that the poor are potential entrepreneurs, donor support was targeted towards the provision of financial and non-financial services to the poor with the goal of building capacity.
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Integrated waqf based islamic microfinance model (IWIMM) for poverty alleviation in OIC member countries

Integrated waqf based islamic microfinance model (IWIMM) for poverty alleviation in OIC member countries

Poverty dominates the agenda of developing countries. Poverty was and still is one of the major impediments of human progress and societal development. Its existence is as old as human history while its alleviation is attributed to effective and successfull economic policies. Various approaches/policies are offered towards reducing poverty. These policies vary depending on time, space and the country concernced. However, reduction of poverty the major goal of many economic systems as stated by the Millenium Development Goals, thought sometimes not explicitly stated It was found that in OIC member countries religious and cultural norms drive preference of Islamic microfinance over conventional microfinance.The study further developed an Integrated waqf based Islamic micrfinance model (IWIMM) for poverty reduction in OIC memebr countries.This is expected to overcome the challenges of conventional microfinance such as, high cost of capital, low quality of human resource, vulnerabilites of poor borrowers due to lack of sustainable takaful and limited products for the clients with different occupationanl backgrounds. However, the model is yet to be verified empirically. Thus, further studies should be conducted to test the model using quantitative techniques such as, structural equation modelling (SEM). © IDOSI Publications, 2014.
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Development Of Waqf Based Microfinance And Its Impact In Alleviating The Poverty

Development Of Waqf Based Microfinance And Its Impact In Alleviating The Poverty

The purpose of this paper is to discuss the potential role of the institution of Waqf in poverty alleviation. Poverty is a complex, multi-dimensional phenomenon that has captured the attention of numerous scholars and agencies globally. The social role of the Islamic financial sector can be best exemplified by providing finance to the poor to increase their income and wealth. This paper will explore on how microfinance can be provided on Shariah compliant basis through Waqf model. This research also reviewing the development of the integrated Waqf based Islamic microfinance which aimed to provide solutions to reduce poverty. An integration of Waqf-based Islamic microfinance (IWIM) model is proposed to address all the practical challenges of microfinance faced in Muslim communities. In this model, microfinance is practised in compliance with Shari’ah to address the multi-dimensional aspects of poverty and empowering the poor in order to enhance the socio-economic development and hence the well- being of the Ummah. With this aspiration, the IWIM model aims to tackle the challenges related to the scarcity of capital, inadequate human resources, absence of proper Takaful programs and project financing in an integrated approach. However, Waqf based microfinance still may be facing some problems should be addressed which related to credit risk, moral hazard, and economic viability.
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Microfinance and the Interaction of Macroeconomic Factors in Poverty Reduction

Microfinance and the Interaction of Macroeconomic Factors in Poverty Reduction

The access of the time series data on poverty for the developed countries is very difficult. The measure’s methods of poverty have been the subject of difficult empiric studies. Different indicators have been used for poverty measurement. The latest studies (Leibbrandt, M., & Woolard, I. 1999) and (Datt, G., & Ravallion, M 1992) proposed the capital consumption of employees as a reliable and sustainable source. However, Odhiambo (2009) used the final consumption expenditure collected from OECD online database. This term is used in accordance with the World Bank definition of poverty “the inability to reach a minimal living standard, measured in terms of basis consumer needs (Odhiambo 2009).
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The Role of Islamic Microfinance for Poverty Alleviation in Mogadishu, Somalia: An Exploratory Study

The Role of Islamic Microfinance for Poverty Alleviation in Mogadishu, Somalia: An Exploratory Study

Following a massive state collapse, Somalia continues to experience political instability and economic challenges. For the past two decades, the Somali economy has been functioning informally due to the absence of a formal financial system (Nor and Masron, 2019). Although banks are still operating (e.g. Dahabshil Bank and Salaam African Bank) in Somalia, Deacon (2013, p. 43) reported that “traditional money transfer operators provide the only functioning financial services in the country” and that all international organisations and companies operating in Somalia use money transfer operators. Notwithstanding its political unrest and economic challenges, there are microfinance-providers operating in Somalia offering small loans for the Somali people (World Bank, 2019). One of the microfinance providers is Kaah International Microfinance Services (KIMS), which offers Shariah compliant financing and micro-savings to Somali micro and small businesses. However, little is known about the Islamic microfinance sector in Somalia. Therefore, the objectives of this study are to study the recipients’ views regarding Islamic microfinance products and to examine the effectiveness of microfinance in alleviating poverty in Somalia.
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Does microfinance affect economic growth? Evidence from Bangladesh based on ARDL approach

Does microfinance affect economic growth? Evidence from Bangladesh based on ARDL approach

Microfinance, a tool for providing improved access to finance (i.e. deposits, loans, payment services, money transfers and insurance etc.) to the unbanked population of a country, may have impact on domestic economic growth according to some literature. However, according to others, microcredits are just means to exploit the poor, by charging higher interest rates and cost of loans, thus making the poor poorer and the rich richer. The present study intends to empirically test the theoretical relationship between microfinance and the economic growth. It examines whether there is any cointegration among microfinance, growth and other macroeconomic variables. And if there is any, whether there is a lead-lag relationship between microfinance and growth, and which leads the other. The study is carried out using a time series technique ‘Auto-Regressive Distributive Lag (ARDL)’, based on annual data from years 1983-2013. It is the first attempt, in our knowledge, to test micro- macro relationship based on annual time series data from Bangladesh, the founding country of microfinance. Our findings tend to indicate that: (i) There is significant impact of microfinance on domestic growth (GDP). (ii) Growth also has strong relationship with microfinance. This implies that there is bi-directional relationship between microfinance and growth and that microfinance is an important “ingredient” in promoting growth through various channels. The results suggest that microfinance institutions should be supported and promoted by ensuring proper legal and regulatory policies, frameworks and institutions. Islamic microfinance should be allowed to flourish, incorporating qard al-hasan, sadaqah, zakah and waqf models along with others to alleviate poverty.
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Role of Waqf in Sustainable Economic Development and Poverty Alleviation: Bangladesh Perspective

Role of Waqf in Sustainable Economic Development and Poverty Alleviation: Bangladesh Perspective

Waqf is one of the sources of Islamic Economic system. It refers to the voluntary charity which has unique presence in Islam. Islamic law is the first law ever that defines and regulates Waqf as a civil societal institution. It started since the time of the Prophet Muhammad (PBUH) himself. Waqf before Islam was always a religious exercise when a rich person assigns a property to the temple and monks would use it for the temple expenses. In present, it has proved around the globe that Micro Credit and Safety Net Program are not successful in reducing poverty and income inequality. In this context, Waqf can be one of the vital alternatives alongside Zakah because early history indicates free education, scholarship, orphanage, free treatment etc as provided by Waqf based institutions. But current scenario shows that, Waqf based institutions are not growing at a considerable level. If we really want to do something for the needy and the poor, we have to revive this much needed institution. This paper shares and explores the current status of the Waqf sector in Bangladesh from socio-economic perspective and underlines the areas that need a fresh look for revitalization and proper utilization of Waqf. The paper also tries to assess the role of Waqf in sustainable economic development and reducing poverty in the context of Bangladesh. There are some specific suggestions and recommendations that deserve serious consideration for the development of Waqf in the country.
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Islamic Microfinance System and Poverty Alleviation in Somaliland

Islamic Microfinance System and Poverty Alleviation in Somaliland

Salaam Financial Services and K-MFI should organize themselves in a national microfinance forum in order to promote their participation in policy development adoption, review processes and enhance their institutional capacity at national levels and to seek memberships in effective international microfinance networks to cooperate in matters of common interest like operational standardization (fiqh rulings, norms and procedures) and financial product development, resolution of divergence of views on compliance, development of resource center to share experiences, conducting training programs in microfinance facilitation. Salaam Financial Services, K-MFI and prospective microfinance providers should adopt full-fledged -compatible products, processes and activities and they should be perceived to be so by their clients, but not like to behave like the bankrupted Amaah Kalkaal 17 when in an attempt to lay a -compliant
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Use the carbon footprint for the reduction of greenhouse gases – the case study of Port of Koper

Use the carbon footprint for the reduction of greenhouse gases – the case study of Port of Koper

For the Port of Koper, the project of installing photovoltaic power stations with an annual electricity production of 2,000 MWh would result in emission reduction of 1,100 tons of CO 2 equivalents, or 2.3 % less emis- sions compared to the year 2008. The shift from fossil fuels to electricity to power the port machinery and service vehicles would result in the re- duction of CO 2 emissions. Beside that it would also result in:

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The Performance of Microfinance Institutions on Poverty Reduction: A Case of Pride Tanzania in the City of Mwanza

The Performance of Microfinance Institutions on Poverty Reduction: A Case of Pride Tanzania in the City of Mwanza

This study focused on examining the performance of micro-finance institutions in respect to poverty reduction in Tanzania using PRIDE Tanzania in Mwanza City as a case study. In other words the study aimed at finding out the performance of individuals who had accessed loans from micro-finance institutions. Micro finance programs and projects have to be developed to meet the specific micro-finance needs of various groups so as to reduce their poverty burden. Evidence reveals that, in recent years (almost a decade) PRIDE has enabled many people to access small and medium loan facilities to cover some of their basic financial obligations. Therefore, this study sought to assess the performance of micro-finance institutions on poverty reduction so as to examine whether the overall objectives as stipulated in the NMFP have been realized.
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Microfinance as a strategy for poverty reduction in Nigeria: Empirical investigation

Microfinance as a strategy for poverty reduction in Nigeria: Empirical investigation

poverty in the country. Oyeranti and Olayiwola (2005) note that from the findings from the World Bank the rural areas are always associated with poverty, giving a breakdown of rural poverty in Nigeria from their statistics, urban poverty rate increased upward from 3 percent in 1980 to 25.2 percent in 1996, rural poverty increased from 6.5 percent in 1980 to 31.6 percent in 1996. The recent Human Development Index report by United Nations Development Programmes (UNDP) in Nigeria indicates that 68 percent of Nigerians are living below $ 1.25 per day (UNDP, 2013). The vision 2010 committee report of the federal government of Nigeria defined poverty as a state of deprivation or denial of the basic choices and opportunity needed to enjoy a decent standard of living, poverty, according to the committee report could also be a condition in which a person is unable to meet minimum requirements of the basic needs of food, health, housing, education and clothing. Poverty, according to the World Bank and Department for International Development (DFID) is individuals not having the opportunity to resources which put them in a condition of despair, hopelessness, precarious situation, exposing them to economic shocks vis a vis political, economical and cultural marginalization (Acha, 2012). Since poverty is a worldwide phenomenon which is not peculiar to Nigeria alone, various international organizations, governments and NGOs have been trying out how to combat the global surge of poverty. The United Nations in 2000 came up with eight millennium development goals in its millennium development summit and one of the goals was eradicating extreme poverty and hunger from the world. Others world organizations like ILO, UNDP, FAO, and ADB have come with strategies in dealing with poverty yet poverty continues unabated. The recently released of the poverty
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MICROFINANCE AND POVERTY REDUCTION IN NIGERIA: A Critical Assessment

MICROFINANCE AND POVERTY REDUCTION IN NIGERIA: A Critical Assessment

Nonetheless, any poverty reduction programme must seek to address the inefficiency and inadequacies of financial markets since they rarely effectively discharge the expected functions. The credit policy for the poor involves many practical difficulties arising from the operations of financial institutions and the economic characteristics and financing needs of low-income households. For Example, commercial banking institutions require that borrowers have a stable source of income out of which principal and interest can be paid back according to the agreed terms. However, the income of many self-employed households is not stable. A huge number of micro loans are needed to serve the poor, but banking institutions prefer dealing with big loans in small numbers to minimize administration expenses. They also look for collateral with clear title-which many low-income households do not have. In addition, bankers tend to consider low income households a bad risk, imposing exceedingly high information monitoring costs on operation (Shastri, 2009). This paper therefore, will critically assess how the poor has been empowered through the operation of microfinance as a strategy for poverty reduction in Nigeria.
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Microfinance: A Practicable Antidote to Poverty Reduction in Nigeria

Microfinance: A Practicable Antidote to Poverty Reduction in Nigeria

The phenomenon of poverty reduction or alleviation has become a relevant issue worldwide, and has occupied large literature. Consequently, authors, scholars, professionals, and donors in their publications have concerned themselves with the capability of microfinance in reducing poverty. Many cross-country studies carried out on the effect of microfinance on poverty reduction revealed results that confirm the positive impact of microfinance activities on poverty reduction. Kai and Hamori (2009) found proof that microfinance has an equalizing effect on people’s income, and Imai et al. (2010) found that microfinance is effective in reducing the poverty gap and the poverty head count ratio. Many studies have shown that microfinance has the capacity to reduce poverty in many societies. For instance, In their study of rural families and population in the Philippines to ascertain whether microfinance has significant impact on poverty alleviation or not Kondo (2007) and Kondo et al (2008) discovered that microfinance institutions have significantly positive effects on welfare outcomes and poverty reduction. In a study conducted in Turkey by Gurses (2009), it was revealed that twenty percent of the total population of turkey was at poverty risk as a result of the poverty rate, but found that micro finance is an appropriate strategy of reducing poverty in the country. Kumar, Bohra & Johari (2008) studied the prospects and challenges of microfinance organizations in India and found that the only practical means by which poverty can be reduced in the country is through micro finance sector, and provided this sector can be encouraged to grow vastly.
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Poverty Alleviation via Microfinance using the Concept of Mudharabah

Poverty Alleviation via Microfinance using the Concept of Mudharabah

Islamic microfinance is a process of building social capital and trust (Abdul Rahim, 2010; Hassan, 2014). Unlike conventional banking, microcredit institutions fund their loans to those who are typically perceived as not credit worthy by traditional bankers, without collateral or guarantor (Abdul Rahim, 2010). Based on equity-based financing contracts of Mudharabah and Musharakah, Islamic microfinance have the potential to alleviate poverty by reaching out to the poor, developing a wide range of productive economic sectors as well as sharing of risks and profits generated. The great scholar, Taqi Usmani (1998) recognized that Musharakah and Mudharabah as ‘real and ideal instruments of financing’ as the money contributed by the financier is to be converted into assets with intrinsic utility and the profits are generated through the sale of these real assets. Table 1 below shows a brief comparison on the features of Mudharabah and Musharakah contracts and the following section discusses why Mudharabah financing contracts are deemed suitable for microfinance programmes.
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The Role of Microfinance Institution for Poverty Reduction in Ethiopia

The Role of Microfinance Institution for Poverty Reduction in Ethiopia

Both approaches share the goal of making financial services available to poor people throughout the world. However, the poverty lending approach focuses on poverty reduction through credit and other services provided by institutions that are funded by donor and government subsidies. A primary goal of this approach is to reach the poor especially the poorest of the poor with credit. Saving is not a significant part of this approach. The poverty lending approach was first realized in Grameen bank in Bangladesh. It has wide outreach to poor borrowers. But the approach has required large amount of continuing subsidies and does not meet poor people‘s demand for saving services. Due to these it has not proven a globally affordable model (Robinson, 2001). With the failure of credit institutions to address the grassroots (households‘) financial needs, the situation demanded an innovative approach to address the lower segment of the population. The new approach should correct the drawbacks of the old approach (Ayelech, 2011). The financial system approach focuses on commercial financial intermediation among poor borrowers and savers; and also emphasis is given to institutional self-sufficiency. The approach targets lending to the economically active poor people, i.e. people with the ability to use small loans for income activities and the willingness to repay and to voluntary make required savings.
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The Effectiveness of Islamic Microfinance Distribution on Microbusiness Owner\u27s Poverty Alleviation (Case Study: BMT Bina Masyarakat Purworejo)

The Effectiveness of Islamic Microfinance Distribution on Microbusiness Owner\u27s Poverty Alleviation (Case Study: BMT Bina Masyarakat Purworejo)

This study used qualitative and quantitative data. The qualitative data that were obtained were used to support the results of the study that was particularly done by using descriptive analysis Likert Scale. In the other hand, the quantitative data were used to give value to the indicators (or variables). Meanwhile, the proper analysis method to be applied in these data were paired sample t-test and Ordinary Least Square (OLS) model. Sample collection was conducted in this study by using purposive sam- pling method. This study was considered as a case study since the data collection was done by interviewing microbusiness owners in three sub- districts in Purworejo (Purwodadi, Kutoarjo, and Bruno). The business owners that acted as respondents in this study were them who receive murabahah financing from BMT Bina Masyarakat Purworejo. There were 828 customers of BMT Bina Masyarakat that received murabahah financ- ing with the funding platform less than 10 million rupiahs, and 98 cus- tomers were chosen to be respondents of the study.
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The Impact of Microfinance Institutions on Poverty Reduction in Nigeria

The Impact of Microfinance Institutions on Poverty Reduction in Nigeria

According to Olaitan (2001) and Akanji (2001), the tools of microfinance include increased provision of credit, increased provision of savings repositories and other financial services to low income earners or poor households. Similarly, United Nation Development Programme (2001) identified Microfinance as a major tool effective in alleviating poverty. It empowers the financially disadvantaged ones. Morduch and Littlefield (2003) and Alegiemo and Attah (2005) considered microfinance as the financial empowerment of economically active poor through the provision of micro credit as well as other productive asset, it enhances the latent capacity of the poor for entrepreneurship, enabling them engage in economic activities, be self-recant and also enhancing the household income as well as creating wealth.
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