The experiences of the Grameen and Islami Bank microfinance on the poverty alleviation in Bangladesh

Abul Bashar Bhuiyan, Chamhuri Siwar, Abd. Ghafar Ismail, Normah Omar

Research output: Contribution to journalArticle

Abstract

The study looks into the impact of microcredit on poverty alleviation of the borrowers of Grameen Bank and Islami Bank microfinance schemes and compares the contributions between these two of MFIs in Bangladesh. Towards the achievement of its objectives, the present study has used descriptive statistical and econometric techniques as well as Foster, Greer, and Thorbecke indexes. The Foster, Greer, and Thorbecke indexes used to evaluate the incidence of poverty by comparing before-after situations and multiple logistic regression models to estimate the parameters that influenced in the lieu of poor and non-poor of borrowers. The study found that access to credit has contributed towards reducing the incidence of poverty, poverty income gap, and severity of poverty of the borrowers of both of MFIs respectively. Moreover, multiple logistic regression model output shows that there are important positive impacts of microcredit on the status of poor and non-poor of borrowers of MFIs accordingly. Furthermore, the findings revealed that Islami Bank microcredit respondents have a fuller record of giving credit for income generating activities for reducing poverty compared to the Grameen Bank microcredit respondents. The present study recommends policy considerations for the successful and effective carrying out of microfinance programs through the addition of proper income generating activities, sufficient amount of access to credit, create self-employment opportunity and re-emphasis on the socket based Islamic mode of funding as well as card-al-Hasan on the initiation of spiritual values as an alternative microcredit model for poverty alleviation in Bangladesh.

Original languageEnglish
Pages (from-to)64-81
Number of pages18
JournalJournal of Islamic Economics, Banking and Finance
Volume13
Issue number3
Publication statusPublished - 1 Jul 2017

Fingerprint

microfinance
poverty alleviation
Bangladesh
poverty
bank
Grameen Bank
income
experience
credit
logistics
self employment
incidence
econometrics
regression
self-employment
policy studies
employment opportunity
Poverty
Poverty alleviation
Microcredit

Keywords

  • Grameen Bank
  • Islami Bank & Bangladesh
  • Islamic and Conventional Microfinance
  • Poverty alleviation

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance
  • Development

Cite this

The experiences of the Grameen and Islami Bank microfinance on the poverty alleviation in Bangladesh. / Bhuiyan, Abul Bashar; Siwar, Chamhuri; Ismail, Abd. Ghafar; Omar, Normah.

In: Journal of Islamic Economics, Banking and Finance, Vol. 13, No. 3, 01.07.2017, p. 64-81.

Research output: Contribution to journalArticle

Bhuiyan, Abul Bashar ; Siwar, Chamhuri ; Ismail, Abd. Ghafar ; Omar, Normah. / The experiences of the Grameen and Islami Bank microfinance on the poverty alleviation in Bangladesh. In: Journal of Islamic Economics, Banking and Finance. 2017 ; Vol. 13, No. 3. pp. 64-81.
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