Microfinance Model Research Articles

Microfinance and Women's Economic Empowerment in Rural India

Self-help groups (SHGs) have played a crucial role in empowering women in India. They have provided a platform for women to come together, share experiences, and support each other in improving their social and economic conditions. This review traverses through the history of microfinance initiatives in India through SHGs, analyses the theoretical framework of SHGs, and integrates multiple perspectives to understand their formation, functioning, and impact on the role of microfinance initiatives on women's economic status and empowerment in rural India. The existing models of microcredit and microfinance are compared, along with the analysis of dynamic risk default and an overview of their mathematical models.

How Islamic Rural Bank Overcomes the Trade-off Between Sustainability and Outreach: Does Market Competition Matter?

There was no consensus how to deal the trade-off between maintaining sustainability and outreach of microfinance institutions among researchers. The paper provides time series data which includes monthly industry data from Islamic Rural Bank for a period of more than 14 years starting from January 2009 to March 2023. In the first analysis, an estimate of the level of market competition is compute by the Lerner Index (LI) of each period. Furthermore, the efficiency analysis of Data Envelopment Analysis (DEA) is used to measure efficiency which allows estimation of efficiency performance using multiple inputs and outputs to understand how Islamic Rural Bank deal with sustainability and outreach. In the end, a Vector Autoregression/Vector Error Correction Model (VAR/VECM) analysis is used to analyse the relationship between the level of market competition and the efficiency of Islamic Rural Bank in achieving sustainability and outreach objectives. The results of the study suggest that by using a production approach Islamic Rural Bank is able to operate efficiently while maintaining the sustainability and outreach objectives without trade-offs. In addition, market competition has a moderate influence on achieving sustainability goals and their outreach. This research examines how Islamic Rural Bank as one of the microfinances to overcome the trade-off between the goals among high competition and the increasing of financial needs by customers. The Microfinance model from Islamic Rural Banks can be replicated to other microfinance institutions (MFIs) to reach both outreach and sustainability goals.

Islamic social finance system: an alternative tool for tackling educational setbacks in Northern Nigeria

Purpose This study aims to address educational setbacks and public spending using Islamic social finance tools such as waqf (Islamic endowment) and zakat (alms) to accelerate the educational sector from an underprivileged situation to prosperity in Northern Nigeria. Design/methodology/approach This study follows quantitative research techniques to achieve its objectives. The data for this research were compiled through a survey of 302 respondents following a convenience sampling approach using covariance-based structural equation modeling and Statistical Package for the Social Sciences software to analyze the data. Findings The study shows that waqf and zakat are found to be positively related to enhance the education sector through direct and mediating variables. Practical implications The result of this study proposed an integrated model of waqf-zakat microfinance as a sustainable source of funding for accelerating and promoting the educational system in Northern Nigeria. Originality/value Zakat and waqf in Northern Nigeria were only given to needy individuals; no standard organization or model was developed based on waqf and zakat for the society. This study investigates the efficiency of waqf and zakat and proposes a model for developing a sustainable educational sector and public spending in Northern Nigeria.

Empowering rural communities: Extrapolations from a systematic review of microfinance-led outcomes

ABSTRACT This study tries to investigate impact of microfinance-led interventions on rural women and local communities based on systematic literature review. The microfinance model started as a developmental initiative keeping women as an agency for social change and center of policy implementation. In rural communities, women play significant role in the house and outside, but they are highly marginalized on the face of existing structural discrimination and disempowerment. It forced government and non-government organizations to introduce developmental interventions such as microfinance-based programmes for the poor communities. The results of systematic literature review indicate a gradual socio-economic-cultural-political change among women, household, and the local community. However, it also suggests that microfinance intervention met with mixed results in making desired socio-economic change. The study demonstrates that the microfinance interventions empower women and reduces societal inequalities but failed to make the requisite transformation in the local community and in some cases made it worse.

Integrating gender in microfinance: Identifying strategies for women's empowerment across different institutional models

The issue of microfinance and women's empowerment has been intensely debated in the last two decades or more. Most of the debates have been about whether microfinance leads to empowerment in the context of specific programmes. Many impact studies focus on specific quantifiable indicators, whether economic or social. This paper moves beyond such debates to understand which strategies work to create empowerment and how. It looks at three institutional models of microfinance across the minimalist and credit plus spaces to identify gender specific and other strategies which enable experiences of empowerment for members of microfinance institutions. Instead of quantitative indicators or specific achievements, the paper explores dimensions and processes of empowerment such as solidarity, leadership and challenge to patriarchal ideology. Although the study is located in a certain district of West Bengal, a state in India, the observations and findings have relevance globally because similar institutional models and strategies are present across the world, especially in the Global South.

SHARIA MICROFINANCE MODELS: A GRAMEEN BANK APPROACH FOR SUSTAINABLE CONSTRUCTION AND WELFARE ENHANCEMENT

This research aims to build a model for strengthening Sharia microfinance through an adapted Grameen Bank replica based on the pillars of leadership, collaboration, spirituality, and women's freedom. This research used a quantitative method to analyze a Grameen Bank replica or build a model for strengthening Sharia microfinance. It provides an early description of the model's independent and dependent variables using Path Investigation and Structural Equation Modeling (SEM). Data were gathered through participatory observation methods, interview techniques, and the distribution of SEM questionnaires to MFI managers and beneficiary customers. The findings indicate a link between the influence of the Grameen Bank-based Islamic Microfinance Institution system on partners in terms of leadership, cooperation, economy, community, and spirituality, as well as alternative strategies for strengthening Grameen Bank-based MFIs in improving the welfare of women's microbusiness groups. This research encourages more attention and implementation of Islamic microfinance models in an effort to improve social and economic welfare, especially among vulnerable groups such as women micro-entrepreneurs.

Analysis of Rural Microfinance Sustainability: Does Local Insight Driven Governance Work?

This study aims to create sustainable microfinance models and formulate policies to facilitate finance in rural areas of western Rajasthan. The study gathers the data by distributing questionnaires to 480 respondents from chosen districts Pali, Sirohi, and Jalore. The information from the questionnaires is supplemented by focus groups held in certain places. This study's endogenous variables are microfinance sustainability and governance characteristics. Social, economic, and environmental issues are exogenous variables. Then, we quantitatively analyze the data using Smart-PLS 4.0. The study found a significant association between social, economic, governance, environmental, and sustainable microfinance. Microfinance sustainability can offer several rewards to managers, including financial stability, effective risk management, enhanced reputation, increased impact, and competitive advantage. The study's outcome can help managers achieve their social and environmental objectives and create long-term benefits for borrowers and communities.

Strengthening Sharia Microfinance Regulations And Business Models In Indonesia

This article aims to elaborate on the regulation and model of Islamic microfinance in Indonesia. A clear understanding of the types of microfinance and the business model run by Islamic microfinance is needed to answer the problems faced by this institution. Solid and stable Islamic microfinance institutions serve a critical role in increasing access to loans and business capital for the poor and micro-enterprises. So far, the poor have not been reached by formal financial institution programs. This study employs a normative juridical approach using primary and secondary legal documents. The study results show that the role of the sharia supervisory board and the Cooperatives and SMEs Office has not played an optimal role in ensuring the compliance of microfinance managers with sharia principles and values and prudent microfinance management. The presence of regulations and institutions that guarantee sharia microfinance deposits is needed to protect managed funds and increase public trust.

The Impact of Village Savings and Loan Associations as a Financial and Climate Resilience Strategy for Mitigating Food Insecurity in Northern Ghana

In semi-arid Northern Ghana, smallholder farmers face food insecurity and financial risk due to climate change. In response, the Village Savings and Loan Association (VSLA) model, a community-led microfinance model, has emerged as a promising finance and climate resilience strategy. VSLAs offer savings, loans, and other financial services to help smallholder farmers cope with climate risks. In northern Ghana, where formal financial banking is limited, VSLAs serve as vital financial resources for smallholder farmers. Nevertheless, it remains to be seen how VSLAs can bridge financial inclusion and climate resilience strategies to address food insecurity. From a sustainable livelihoods framework (SLF) perspective, we utilized data from a cross-sectional survey of 517 smallholder farmers in northern Ghana’s Upper West Region to investigate how VSLAs relate to food insecurity. Results from an ordered logistic regression show that households with membership in a VSLA were less likely to experience severe food insecurity (OR = 0.437, p < 0.01). In addition, households that reported good resilience, owned land, had higher wealth, were female-headed, and made financial decisions jointly were less likely to experience severe food insecurity. Also, spending time accessing the market increases the risk of severe food insecurity. Despite the challenges of the VSLA model, these findings highlight VSLAs’ potential to mitigate food insecurity and serve as a financially resilient and climate-resilient strategy in resource-poor contexts like the UWR and similar areas in Sub-Saharan Africa. VSLAs could contribute to achieving SDG2, zero hunger, and SDG13, climate action. However, policy interventions are necessary to support and scale VSLAs as a sustainable development and food security strategy in vulnerable regions.

SHARIA CREDIT RISKS

Alleviation poverty, especially among women, is a serious challenge in Indonesia. Finance microsharia emerged as a potential solution. For empowerment, women should approach sharia credit. This article discusses necessary risks noticed, like credit traffic jams, fraud, and risk reputation, in development finance microsharia. Management good risk has become a key continuity business. Apart from that, the importance of education and literacy finance, supporting the government, and partnerships with various parties in increasing the contribution of women to overcome poverty through Sharia credit is highlighted. Utilisation of the potential for zakat, waqf, and Islamic values is also a crucial aspect. Inclusionary and sustainable microfinance models are expected to positively impact women's economic empowerment. With a holistic, inclusive, and sustainable approach, it is hoped that women can play a significant role in alleviating poverty and positively impacting various layers of society in Indonesia.

Computerized accounting information systems: An application of task technology fit model for microfinance

This study investigates the factors of Computerized Accounting Information Systems (CAIS) and the application of Task Technology Fit (TTF) in 190 decision-makers at accredited microfinance in Indonesia that apply technology adoption in decision-making processes. The results of analysis with SEM AMOS highlighted some findings: (1) The system quality of the computerized accounting information system and task analyzability have a significant effect on Task Technology Fit (TTF), (2) Task Technology Fit (TTF) has a positive relationship with perceived usefulness and sustainable performance. Furthermore, this study contributes to the development of TTF theory in optimizing integrated technological capabilities, accounting information systems, and task characteristics toward Sustainable Performance. The prominent contribution of this research is the importance of technology (including CAIS and Core Micro Banking System). Finally, this study will enrich references in the field of Accounting and Finance, especially for the application of technology for Sustainable Performance in Microfinance.

Effectiveness of Financial Cooperatives as Cost-Effective Models for Financing Rural Economies in Nigeria

Financial cooperatives, commonly known as credit unions or savings and credit cooperative societies (SACCOs), have emerged as integral components of Nigeria's financial landscape, especially in rural areas. This paper explores the effectiveness of financial cooperatives as cost- effective models for financing rural economies. The study delves into their structure, benefits, challenges, and impact on rural communities, with a focus on Nigeria's unique context. Financial cooperatives, characterized by member ownership and control, aim to provide affordable financial services to low-income populations. In Nigeria, where rural areas face challenges in accessing traditional banking services, financial cooperatives have been promoted as a sustainable approach to extend financial inclusivity. SACCOs leverage member savings to offer loans at reasonable interest rates, fostering cost-effectiveness compared to other microfinance models. The paper also discusses the structure of the rural economy in Nigeria, its challenges, and potential policy pathways for fostering rural economic growth. The components of financial cooperatives, such as membership, governance, savings mobilization, lending methodology, and regulation, are examined. The study emphasizes the significance of good governance in ensuring cooperatives act in the best interests of their members. It also discusses the positive impact of financial cooperatives on rural communities, offering accessibility, affordability, and contributing to community development. In conclusion, financial cooperatives present a promising model for rural economic development in Nigeria. The paper provides recommendations for enhancing their effectiveness, emphasizing collaboration with regulatory bodies, targeted initiatives for financial inclusion, capacity building, technological adoption, diversification of financial products, community

Adapting microfinance model to urban challenges: A comprehensive study

Adapting microfinance model to urban challenges: A comprehensive study

İSLAMİ MİKROFİNANS ARAŞTIRMALARINDA MEVCUT TARTIŞMALAR VE GELECEK GÜNDEMLER: SCOPUS VERİTABANINA DAYALI BİR BİBLİYOMETRİK ÇALIŞMA

The main purpose of this study is to encapsulate the major themes and their inter-linkage within Islamic microfinance research and to highlight the important gaps by recommending future research areas of worth investigation. The Scopus database is used for this bibliometric analysis. Using a robust selection criterion, 89 research articles were finalized to conduct the analysis. For the visualization and presentation of results, various software were used, such as R, RStudio, VOSviewer, and Microsoft excel. Results of content analysis and literature mapping show that most of the available studies on Islamic microfinance are theoretical and cover the topics of Islamic microfinance models, importance as a tool for poverty alleviation, and integration of Islamic commercial and social finance. There is an ample research gap in this area, and there are various avenues that could be explored in future research. In comparison with other studies on the same area using the same methodology, this study presents the various research agendas, areas and ideas for future research, which makes this study a good contribution to the literature.

The transformation of conventional microfinance into Islamic microfinance in Bangladesh: proposed Shariah-based model(s)

PurposeDespite being a Muslim-dominated country, Bangladesh has widely embraced traditional microfinance since its inception in the mid-1970s. However, Islamic microfinance, which has a lot to offer to the poor, is still in its infancy and has yet to gain momentum in the country. Therefore, the purpose of this study is to analyze the importance of Islamic microfinance and propose alternative Shariah-compliant microfinance models in Bangladesh.Design/methodology/approachThis study is based on the desk research method, which relies on existing literature to collect secondary data on key concerns of traditional microfinance programs. In addition, institutional-level secondary data were also collected from the Microcredit Regulatory Authority (MRA) of Bangladesh. Guided by the Maqasid-al-Shariah, this study then proposes several Islamic microfinance models to overcome selected challenges faced by the microfinance industry in Bangladesh.FindingsThis study suggested three composite Shariah-compliant microfinance models, which are likely to help the underprivileged and thus ensure the achievement of the sustainable development goals in Bangladesh. The first model explained how the operational strategy of incumbent microfinance institutions (MFIs) could be restructured, while the second proposed the organizational strategies for establishing a new MFI. The third model used the notion of Sadaqah (charity) to address the multiple borrowing issues of the industry. Meanwhile, the successful transformation of the conventional microfinance industry to an Islamic one is dependent on the effective collaboration between the regulatory authorities, practitioners and MFIs.Originality/valueAlbeit the paucity of literature on the topic, the findings of this study will guide policymakers/practitioners in designing relevant microfinance models to help transform conventional microfinance into Islamic microfinance in Bangladesh.

Transforming Poverty: Assessing the Significance of the Akhuwat Islamic Microfinance Model across Absolute, Moderate, and Relative Poverty Strata

Purpose: The goal of this study is to determine how the Akhuwat Islamic Microfinance Mode (AIMM) affects several types of poverty in Pakistan, including absolute, moderate, and relative poverty.
 Design/Methodology/Approach: In this study, primary data from Akhuwat Microfinance borrowers were collected using the stratified sample technique. The population was divided into four groups: manufacturing concerns, trading concerns, services concerns, and non-trading concerns. Additionally, a two-stage structural modelling technique was used for further data analysis. The measurement model was used to assess the reliability and validity, while the structural model was used to gauge the link between the underlying variables. 
 Findings: The study found positive and significant impact of Akhuwat Islamic Microfinance Mode (AIMM) on different dimensions of poverty, including absolute poverty, moderate poverty and relative poverty. Therefore, lending practices of Akhuwat enables the borrowers to reduce their absolute, moderate, and relative poverty. 
 Implications/Originality/Value: The role Akhuwat's unique approach to address different poverty levels including absolute poverty, moderate poverty and relative poverty is hardly investigate in the context of Pakistan by applying the Abraham Maslow's Hierarchy of Needs Theory.

Achieving Inclusive Microfinance: Recommendations from Catholic Social Teaching and Economic Development Literature

Microfinance programs are promoted as powerful tools for increasing financial inclusion and reducing poverty in the developing world. While these programs have shown promise, they often fail to reach the most marginalized potential clients and can actually increase exclusion through mechanisms such as social sanctions. In this paper, we review recent microfinance literature highlighting the benefits, drawbacks, and potential mechanisms of exclusion inherent in current microfinance models. We then outline principles, rooted in Catholic Social Teaching, that provide a fuller understanding of the human person and can help inform a more inclusive version of microfinance. Finally, we apply these principles and recent innovations in the economics literature to propose a list of practical recommendations for inclusive microfinance to achieve integral development.

An aspirational hope of a Sharīʿah-based microfinance model to alleviate extreme poverty

PurposeThis study aims to propose a Sharīʿah-based and information and communication technology-driven microfinance model (SIMM) to reduce extreme poverty in rural areas. Existing microfinance models run by microfinance institutions exclude severely poor individuals from their activities.Design/methodology/approachThis study uses an exploratory sequential mixed-method design structured as Studies 1 and 2. Study 1 uses the grounded theory methodology to develop the emergent SIMM through interviews and focus group discussions with the participants (12 rich, 6 rural elites and 18 poor) of the target village. Study 2 uses a survey of 421 household members in the target village to evaluate their attitudes (ATT), subjective norms (SN) and perceived behavioural control (PBC) related to SIMM. Partial least squares-based structural equation modelling is used to evaluate relationships between constructs.FindingsStudy 1 identifies seven themes, in which aspirational hope is recognised as a core theme. Study 2 indicates significant relationships between ATT and PBC and between SN and PBC. Thus, the SIMM can alleviate poverty in rural communities.Practical implicationsThe application of the SIMM in the pilot study provides aspirational hope for eradicating extreme poverty.Social implicationsOther rural communities should be encouraged to apply the SIMM to alleviate extreme poverty in their villages.Originality/valueThis study contributes to the development of an innovative microfinance model (SIMM) to eradicate extreme poverty in rural areas.

The Grameen Bank Microfinance Model in the Global North: Processes, Transfer Intermediaries and Adoption

The spread of the Grameen Bank microfinance model has received global attention. The article discusses when and how the model traveled “North”. It finds that both specialized actors, such as policy ambassadors, and permissive local contexts were crucial in these adoptions. The US seemed more permissive, partly due to network ties and because of a neoliberal approach to social policy together with a strong focus on gender norms. In Europe, however, reception differed. The adoption of the Grameen model thus offers interesting insights into the South–North policy transfer of social innovations.

SWOT Analysis with Novel NimbusTech Cloud Computing based Research on Regional Tourism Poverty Alleviation Development Model

Cloud computing has the potential to revolutionize microfinance by providing access to affordable and scalable computing resources. Microfinance institutions (MFIs) can use cloud computing to streamline their operations, reduce costs, and improve their services to clients. Cloud computing can also help MFIs reach new clients by providing a cost-effective platform for deploying and managing new services. Regional tourism can have a significant impact on the local economy, creating jobs and generating income for local businesses. It can also provide opportunities for cultural exchange and contribute to the preservation of natural and cultural heritage sites. A poverty alleviation development model is a framework or approach that is used to reduce poverty in a specific region or community. Effective poverty alleviation development models require collaboration between the government, non-governmental organizations, and local communities. They should also be based on an understanding of the specific needs and priorities of the target population, as well as the broader social, economic, and political context in which they operate. This paper presents a SWOT analysis of a novel cloud computing environment, called NimbusTech, through the lens of a microfinance model for poverty alleviation with a focus on regional tourism. The SWOT analysis examines the strengths, weaknesses, opportunities, and threats of using NimbusTech to support microfinance initiatives aimed at reducing poverty levels in regions that rely on tourism. The analysis highlights that NimbusTech's strengths include its scalability, flexibility, and cost-effectiveness, which make it an ideal platform for implementing microfinance programs. On the other hand, its weaknesses include data security and privacy concerns, which could undermine trust in the platform. The opportunities for NimbusTech include the potential for leveraging big data analytics to improve the effectiveness of microfinance programs, while the threats include competition from other cloud computing platforms and potential regulatory barriers. Overall, the analysis shows that NimbusTech has the potential to support microfinance initiatives and promote regional tourism as a means of reducing poverty levels, but careful attention must be paid to its weaknesses and threats to ensure its success..