Role of Islamic Micro Finance in Alleviating Poverty in Bangladesh: A Study on RDS of IBBL

Md Masud Parvej,Abdullah Mohammad Ahshanul Mamun,Md Musharof Hossain,Md Asad Iqbal Chowdhury,Md Kazi Golam Azam

doi:10.5430/ijfr.v11n4p111

Md Masud Parvej, Abdullah Mohammad Ahshanul Mamun + Show 3 more

Open Access

https://doi.org/10.5430/ijfr.v11n4p111

Copy DOI

Abstract

The goal of this study is to determine the Role of Islamic Micro Finance in Alleviating Poverty, a study on RDS (Rural Development Scheme) of the Islamic Bank Bangladesh Limited. The study employed interview method, descriptive statistics, T-test, Chi-squared test, and multiple regression analysis to investigate a total of 328 samples (RDS borrowers). The sample has been purposefully selected for the study from two districts of Rajshahi division of Bangladesh. The results of our study indicate that in any category having an income level of more than 5001 to 10000, after access to the RDS scheme of IBBL, overall, 72% of respondent’s income increased. In the case of impact analysis of the program on poverty alleviation, the results of the statistical analysis (regression model) revealed that there is a significant impact of the Rural Development Scheme (RDS) on poverty alleviation (P-value-0.000).

Highlights

Bangladesh, mainly an agriculture depending country, has about 17.22% of the entire Gross Domestic Product (GDP) of the country derived from agriculture as well as accommodates around 45.6% of the labor force (Statistics, 2015)
Considering the poverty headcount rate, poverty reduced from 31.5% to 24.3% according to the top poverty line, and as in keeping with the lower poverty line, the headcount ratio decreased from 17.6% to 12.9% from the year 2010 to 2016
It was observed during the pilot survey, most of the poor or hardcore poor live in these areas and sample Islamic microfinance institution (IBBL) has been working in these areas for providing financial services

Summary

Introduction

Bangladesh, mainly an agriculture depending country, has about 17.22% of the entire Gross Domestic Product (GDP) of the country derived from agriculture as well as accommodates around 45.6% of the labor force (Statistics, 2015). The GDP boom in the country depends mainly on agriculture. Natural calamities like cyclones, floods, and drought, loss of manufacturing in both meals and cash crops as a normal phenomenon impede its standard performance. These natural and man-made challenges, there has been an impressive growth in food grain production in the latest years due to the use of current agricultural machinery, equipment, and the generation has increased. The country is on the threshold of reaching self-sufficiency in meals grain production

Objectives

Methods

Results