(4) Islamic Based Microfinance A Tool for Sustainable Development

Abstract

The core objective of the study was to explore the role of Islamic based microfinance in the material welfare of the poor women entrepreneurs. The phenomena of ‘microfinance’ as a ‘financial development approach’ and in formalization of labour force as an ‘economic strategy’; have evolved as salient features of economic scenario of developing countries. This study examined that how microfinance provides more opportunities for employment, production and income generating capacity for the establishment of microenterprises by entrepreneurial women. The study focused on Islamic based microfinance, as a tool for poverty alleviation and sustainable development, with respect to three interdependent and interlinked perspectives; financial sustainability, better social capital and women empowerment. The twenty five potential women entrepreneurs, who took microfinance from ‘Akhuwat’ (Islamic based interest free microfinance institution), were selected through purposive sampling strategy for conducting case studies in this qualitative research study. It was found that Islamic based microfinance is an effective, more realistic and better intervention for these women entrepreneurs, their empowerment and poverty eradication from the society. The study concluded that Islamic based microfinance can bridge up the gaps of existing conventional microfinance, such as, tough collateral requirements, low access to microfinance, income related gaps, high interest rates, etc., and can play a pivotal role in reducing poverty and eventuating in sustainable development of the society.