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The Effect Of Islamic Microfinance On Poverty Alleviation: Study In Indonesia

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  • Wahibur Rokhman

    (State Islamic College (STAIN) Kudus, Indonesia)

Abstract

This study was conducted to examine the role of Islamic microfinance on poverty alleviation. The four indicators of poverty alleviation were used: income levels, children’s education, health care, and business progress. This study used the sample of 150 borrowers from 20 Islamic microfinance institutions in Central Java, Indonesia. The questionnaires were distributed to them using the purposive sampling method. Out of 150 questionnaires distributed, the researchers received back 124 responses. The empirical tests indicated that microfinance has a significant role on improving income level, children’s education, and business progress. However, the study did not find any significant role of microfinance in access to health care. Implications, limitations and suggestions for future research are discussed.

Suggested Citation

  • Wahibur Rokhman, 2013. "The Effect Of Islamic Microfinance On Poverty Alleviation: Study In Indonesia," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 11(2), pages 21-30.
    • Handle: RePEc:tuz:journl:v:11:y:2013:i:2:p:21-30
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    References listed on IDEAS

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    1. A. Mushtaque R. Chowdhury & Abbas Bhuiya, 2004. "The wider impacts of BRAC poverty alleviation programme in Bangladesh," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(3), pages 369-386.
    2. Awojobi, Omotola & Bein, Murad, 2010. "Microfinancing for Poverty Reduction and Economic Development; a Case for Nigeria," MPRA Paper 33530, University Library of Munich, Germany, revised 11 Apr 2011.
    3. Asep Suryahadi & Gracia Hadiwidjaja & Sudarno Sumarto, 2012. "Economic growth and poverty reduction in Indonesia before and after the asian financial crisis," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 48(2), pages 209-227, August.
    4. Coleman, Brett E., 1999. "The impact of group lending in Northeast Thailand," Journal of Development Economics, Elsevier, vol. 60(1), pages 105-141, October.
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    Cited by:

    1. Md. Masud Parvej & Md. Asad Iqbal Chowdhury & Md. Kazi Golam Azam & Md. Musharof Hossain & Abdullah Mohammad Ahshanul Mamun, 2020. "Role of Islamic Microfinance in Alleviating Poverty in Bangladesh: A Study on RDS of IBBL," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(4), pages 111-129, July.

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    More about this item

    Keywords

    Islamic microfinance; Poverty alleviation; Indonesia;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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