Prospects and challenges of Islamic Microfinance Programmes: a case study in Bangladesh

Poverty alleviation initiatives with microfinance under Islamic framework are of recent origin in Bangladesh. This study was conducted to assess the prospects and challenges of Islamic microfinance programmes in poverty alleviation. The findings revealed an inelastic demand for Islamic microfinance products over the conventional one. In the absence of Islamic financing sources, almost all Muslim respondents were compelled to borrow from the conventional interest-based lending sources. Lack of funding and support, allegation of involvement with funding and patronising militant activities and dominance of conventional NGO-MFIs were the main barriers for Islamic microfinance programmes in Bangladesh.