IDEAS home Printed from https://ideas.repec.org/a/ris/isecst/0177.html
   My bibliography  Save this article

The Role of Entrepreneurial Empowerment in the Relationship between Islamic Microfinance and Well-being of Clients: A View from a Service Provider

Author

Listed:
  • USMAN, A. S.

    (Gombe State University, PMB 127, Gombe, Nigeria.)

  • TASMIN, R.

    (Universiti Tun Hussein Onn Malaysia.)

  • ULUM, Z. K. A. B

    (Universiti Malaysia Kelantan. Kampus Kota Karung Berkunci)

Abstract

Islamic microfinance has been reported as appropriate in improving the living conditions of the poor. However, little is known about the contribution of entrepreneurial empowerment in achieving such success. The objective of this study is to examine the mediating role of entrepreneurial empowerment in the relationship between Islamic microfinance and well-being of clients. A sample of 291 respondents was selected randomly from the operational staff of Amanah Ikhtiar Malaysia in east-coast states of Malaysia. Structural Equation Modelling was used as the statistical procedure to analyse the data. The results supported three hypotheses, which confirmed that Islamic microfinance has positive relationship with entrepreneurial empowerment. However, three hypotheses were rejected on the relationship between Islamic microfinance and clients’ well-being, suggesting that Islamic microfinance does not improve the clients’ well-being. The seventh hypothesis was also supported, which indicates a full mediation role of entrepreneurial empowerment. The unique finding of the study is that, entrepreneurial empowerment is the underlying factor for the success of Islamic microfinance. To enable generalisation of this finding, further study is recommended in other Muslim countries.

Suggested Citation

  • Usman, A. S. & Tasmin, R. & Ulum, Z. K. A. B, 2019. "The Role of Entrepreneurial Empowerment in the Relationship between Islamic Microfinance and Well-being of Clients: A View from a Service Provider," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 26, pages 73-93.
    • Handle: RePEc:ris:isecst:0177
    as

    Download full text from publisher

    File URL: http://www.irti.org/English/Research/Documents/IES/245.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Paul Anand & Graham Hunter & Ron Smith, 2005. "Capabilities and Well-Being: Evidence Based on the Sen–Nussbaum Approach to Welfare," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 74(1), pages 9-55, October.
    2. Michael Delgado & Christopher Parmeter & Valentina Hartarska & Roy Mersland, 2015. "Should all microfinance institutions mobilize microsavings? Evidence from economies of scope," Empirical Economics, Springer, vol. 48(1), pages 193-225, February.
    3. Sudhir Anand & Amartya Sen, 2000. "The Income Component of the Human Development Index," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 1(1), pages 83-106.
    4. Sudhir Anand and Amartya Sen, 2000. "The Income Component of Human Development Index," Human Development Occasional Papers (1992-2007) HDOCPA-2000-01, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    5. Deepa Narayan, 2002. "Empowerment and Poverty Reduction : A Sourcebook," World Bank Publications - Books, The World Bank Group, number 15239, December.
    6. Shirazi, Nasim Shah, 2012. "Targeting and Socio-Economic Impact of Microfinance: A Case Study of Pakistan," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 20, pages 1-28.
    7. Sheila Nu Nu Htay & Nur Shazwani Sadzali & Hanudin Amin, 2015. "An analysis of the viability of micro healthtakafulin Malaysia," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 7(1), pages 37-71, February.
    8. Abouzar Zangoueinezhad & Asghar Moshabaki, 2011. "Human resource management based on the index of Islamic human development," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 38(12), pages 962-972, October.
    9. Amartya Sen, 2005. "Human Rights and Capabilities," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 6(2), pages 151-166.
    10. Marco Tavanti, 2013. "Before Microfinance: The Social Value of Microsavings in Vincentian Poverty Reduction," Journal of Business Ethics, Springer, vol. 112(4), pages 697-706, February.
    11. Mohieldin , Mahmoud & Rostom , Ahmed & Fu, Xiaochen & Iqbal, Zamir, 2012. "The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 20, pages 55-120.
    12. Rosman Mahmood & M. Mohd Rosli, 2013. "Microcredit position in micro and small enterprise performance: the Malaysian case," Management Research Review, Emerald Group Publishing Limited, vol. 36(5), pages 436-453, April.
    13. El-Komi, Mohamed & Croson, Rachel, 2013. "Experiments in Islamic microfinance," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 252-269.
    14. Hulme, David, 2000. "Impact Assessment Methodologies for Microfinance: Theory, Experience and Better Practice," World Development, Elsevier, vol. 28(1), pages 79-98, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bashir Kurfi Babangida & Barjoyai Bardai, 2022. "Determining Factors That Improve Youths’ Economic Empowerment in Katsina State, Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(6), pages 798-808, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Usman & A. S. & Tasmin & R., 2016. "The Relevance of Islamic Micro-finance in achieving the Sustainable Development Goals," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 6(2), pages 1115-1115.
    2. Yahya Z. ALSHEHHI, 2017. "Achievements In Terms Of Human Development Dimensions," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 13, pages 109-125, May.
    3. Hirai, Tadashi, 2021. "Measuring capabilities: Taking people’s values seriously," World Development, Elsevier, vol. 148(C).
    4. Mina Baliamoune-Lutz, 2004. "On the Measurement of Human Well-being: Fuzzy Set Theory and Sen's Capability Approach," WIDER Working Paper Series RP2004-16, World Institute for Development Economic Research (UNU-WIDER).
    5. Jeni Klugman & Francisco Rodríguez & Hyung-Jin Choi, 2011. "The HDI 2010: new controversies, old critiques," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(2), pages 249-288, June.
    6. Christoph Dörffel & Sebastian Schuhmann, 2020. "What is Inclusive Development? Introducing the Multidimensional Inclusiveness Index," Jena Economics Research Papers 2020-015, Friedrich-Schiller-University Jena.
    7. M. Sirgy, 2011. "Theoretical Perspectives Guiding QOL Indicator Projects," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 103(1), pages 1-22, August.
    8. Leßmann, Ortrud, 2011. "Empirische Studien zum Capability Ansatz auf der Grundlage von Befragungen: Ein Überblick," UFZ Discussion Papers 4/2011, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    9. Leandro Prados de la Escosura, 2023. "Inequality Beyond GDP: A Long View," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(3), pages 533-554, September.
    10. Wolff, Hendrik & Chong, Howard & Auffhammer, Maximilian, 2008. "Consequences of Data Error in Aggregate Indicators: Evidence from the Human Development Index," CUDARE Working Papers 6502, University of California, Berkeley, Department of Agricultural and Resource Economics.
    11. Prados de la Escosura, Leandro & Cha, Myung Soo, "undated". "Living Standards, Inequality, and Human Development since 1870 : a Review of Evidence," IFCS - Working Papers in Economic History.WH 28438, Universidad Carlos III de Madrid. Instituto Figuerola.
    12. Leandro Prados de la Escosura, 2021. "Augmented human development in the age of globalization," Economic History Review, Economic History Society, vol. 74(4), pages 946-975, November.
    13. Elizabeth Stanton, 2007. "The Human Development Index: A History," Working Papers wp127, Political Economy Research Institute, University of Massachusetts at Amherst.
    14. Vargas-Montoya, Luis & Gimenez, Gregorio & Fernández-Gutiérrez, Marcos, 2023. "ICT use for learning and students' outcomes: Does the country's development level matter?," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    15. Sayed Ehsan Khandoozi, 2015. "An Index for Economic Justice: The Case of Iran," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 19(2), pages 193-210, Spring.
    16. Elizabeth Stanton, 2007. "Engendering Human Development: A Critique of the UNDP’s Gender-Related Development Index," Working Papers wp131, Political Economy Research Institute, University of Massachusetts at Amherst.
    17. Volkert Jürgen, 2009. "Unternehmen als Agenten der Armutsüberwindung und Entwicklung. Ihr Beitrag aus Sicht von Ordoliberalismus und Capability-Ansatz / Corporate potentials to fight poverty and foster human development. Or," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 60(1), pages 389-414, January.
    18. Attari, Muhammad Qasim & Pervaiz, Dr. Zahid & Jan, Dr. Sajjad Ahmad, 2017. "Temporal and Spatial Variations in Human Development Across the Districts of Punjab, Pakistan," MPRA Paper 89092, University Library of Munich, Germany.
    19. Gasper, D.R., 2006. "What is the capability approach?: its core, rationale, partners and dangers," ISS Working Papers - General Series 19187, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    20. Maria Ana Lugo & Esfandiar Maasoumi, 2008. "Multidimensional Poverty Measures from an Information Theory Perspective," Working Papers 85, ECINEQ, Society for the Study of Economic Inequality.

    More about this item

    Keywords

    Islamic microfinance; Empowerment; Well-being; Amanah Ikhtiar; Malaysia;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:isecst:0177. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: IRTI Staff or the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/irisbsa.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.