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This chapter explores the determinants of satisfaction of the Islamic microcredit borrowers in Bangladesh. A total of 245, mostly educated and young, borrowers of rural development scheme, the largest Islamic microcredit institution (MCI) in the world, were included in a survey using a structured questionnaire. Factors were extracted using exploratory factor analysis. Multiple regression analysis was conducted to identify influential determinants of satisfaction of microcredit borrowers. Borrowers have identified the activities and interaction in the “center,” which includes weekly/monthly meetings, investment-related training, and group performance review, as the most vital factor influencing their overall satisfaction. Competence of the microcredit staffs and officials is the second important determinant. Trust plays the next important role in overall satisfaction of the borrowers with the Islamic microcredit institutions. Convenience, of applying for loan, getting an approval, and paying instalments, is the other influential determinant of the borrower’s satisfaction. The findings imply that given the competition and social need of the Islamic microcredit institutions globally, policymakers must ensure greater investment in human capital, in creating awareness about products and services of the Islamic microcredits, and in initiating a prudent change in the regulation so that Islamic microcredit can become a tool for sustainable socioeconomic development. Use of a proper marketing strategy can also help the MCIs to support the financial inclusion policy of the government. Satisfaction of the borrowers of the Islamic microcredit institutions is yet to arrive in Islamic marketing literature. The proposed borrower-centric model can help reduce poverty and the internal loan-shark problem through adequate engagement of relevant stakeholders.

The purpose of this paper is to initiate a direct discourse towards an Islamic microfinance focus agenda for the economic enlistment of the poor minority community and to allow poorer households in the financial inclusion. The issue of the Indian conventional microfinance institutions in failing to attract the poorest of the poor amongst Muslims is important for the purpose of this paper. This study explores a Shari’ah-compliant microfinance system which will create a level of playing-field with respect to the financial inclusion of the poor.

The paper is a theoretical discussion on Islamic microfinancial services for financial inclusion of the poor. Therefore, there is little to say about “methodology” other than the conventional microfinance model is reviewed, and an alternative model of Islamic microfinancial service has been suggested to allow poorer households in the financial inclusion.

The paper finds that there are some opportunities capable of improving the economic condition of the poor Muslim communities through some innovative approaches. To illustrate this finding, the paper emphasises on designing and delivering Islamic microfinancial products suitable for the poor based on the principle of Islamic solidarity. It argues that this service will help the poor and turn their savings into sums large enough to satisfy a wide range of personal, social and asset-building needs as well as needs relating to small businesses and consumption.

The paper’s findings are limited to the matter of financial inclusion of the poor through Islamic microfinancial services in India.

Combining the Islamic social principle of solidarity for the less fortunate with the power of microfinance to provide financial access to the poor has the potential to reach out to millions more people. The ideas presented in this paper are designed to direct discourse towards an Islamic microfinance focus agenda for the economic enlistment of the poor Muslims in India.

The purpose of this paper is to examine factors influencing the level of satisfaction of Islamic microfinance customers and their loyalty toward their patronized institution in Central Java, Indonesia.

The target population is all customers of Islamic microfinance institutions in Central Java, Indonesia. A sample of 300 respondents is selected for this study using purposive sampling and only 246 data are used in the analysis. The data are then analyzed using structural equation model with cost of loan, risk of loan, loan repayment, family welfare and Shariah issues as exogenous variables and satisfaction and loyalty as endogenous variables tested in the model.

The findings have shown that there is a significant effect of cost of loan, risk of loan and loan repayment upon the customers’ satisfaction and from the customers’ satisfaction toward the customers’ loyalty. The Shariah issues and family welfare were statistically insignificant to predict the customers’ satisfaction, which imply a big homework of Islamic finance academics and practitioners in Indonesia to educate people about Islamic finance and to show the real positive impact of Islamic finance models toward poverty.

Central Java is the province with a large number of SME and microfinance institutions, both conventional and Islamic, in Indonesia. This study provides a good insight for researchers seeking updated information about microfinance in Indonesia.

This study aims to know the present structure and move of the Islamic banks of Pakistan as well as current issues and challenges for Islamic microfinance. However, this is based on perceptions of the Islamic bankers, regulators and micro-entrepreneurs and petty traders, as they are the key players in the credit market.

The study gathered relevant information through conducting field survey. Two questionnaires were designed for the survey. One questionnaire was administered to survey 270 micro-entrepreneurs and petty traders in three major cities of Pakistan. Another survey deals with the perceptions of Islamic bankers. In total, 100 people from middle and top management were surveyed from five full-fledged Islamic banks of Pakistan. The SPSS software, version 16, was used for questionnaire reliability and descriptive analysis to analyse the data.

In general, the study found the strong opinions of the respondents speak in favour of Islamic microfinance under a system of profit and loss sharing. Conversely, the majority of the clients also feel that Islamic banks do not encourage lower-income micro-entrepreneurs. In addition, the study found that Islamic microfinance is constrained by lack of knowledge, experience and professionalism of the supporting staff; however, Islamic bankers have shown great consensus that Islamic banks should offer Islamic microfinance products and instruments to respond to the needs of the poor for poverty alleviation.

The first limitation of the study is the meagre interest of micro-entrepreneurs and petty traders to participate in the survey. The second limitation of this work concerns the extremely busy schedule of top management and administrative impediment to approach and fix an appointment. Despite these limitations, the findings of this study provide insights to Islamic banks in diversifying their products by offering Islamic microfinance to the low-income entrepreneurs but with proper guidelines and policies.

There is a need to educate the community towards the merits of Islamic banking system by developing a good information system using good visuals and professionally presented seminars, banners and arranging regular sessions with the business community. The growth and development of Islamic banking in the country largely depend on its customers’ enhanced knowledge and awareness about its products and services.

It is the responsibility of the community as well as of government to change the mindset of the poor that banks are meant to serve the interest of everybody, regardless of social, economic and political status.

Theoretically, this study contributes to the existing body of knowledge in the area of Islamic microfinance by examining the perceptions of Islamic bankers and micro-entrepreneurs. This can help Islamic banks of Pakistan to design and formulate new administrative as well as operational procedures to serve the interest of the poor with commitment towards Islamic values.

The main purpose of this study is two-fold: first, it aims to confirm or disapprove a positive relationship between Islamic microfinance and the socio-economic welfare of women and, second, it aims to explore the perspective in which Islamic microfinance packages function in Bangladesh and the system of their performance can be enhanced.

Based on structured questionnaires’ survey, this study addressed two research questions: What should be anticipated from the programmes of Islamic microfinance on the well-being of beneficiaries and under what circumstances would such programmes be more useful?

The main result of this study shows that growth in women’s revenue and resources played an important role in improving women’s financial freedom and sense of self-possession. A significant policy endorsement in this study is that it is essential to redirect Islamic microfinance to spread in the developmental activities which will drive to contribute towards the well-being of the recipients in the long run.

Examination of the Rural Development Scheme of Islami Bank Bangladesh is undertaken, aiming to critically review their Islamic microfinance programme in the matter of fighting poverty in Bangladesh and to suggest to diversify the Islamic microfinance scheme to spread in the developmental activities which will drive to contribute towards the well-being of the recipients in the long run.

Islamic banking and microfinance institutions (MFIs) share the core objective of serving the underprivileged. This study aims to investigate whether Islamic banking development facilitates (greases) or hinders (sands) the social mission of MFIs.

Data for 19 countries covering the period 2010–2018 were collected from the World Bank, Bank Focus and International Monetary Funds and analyzed using conventional econometric methods. Endogeneity-corrected techniques and alternative proxies were employed to ensure robust results.

The study revealed that Islamic banking development (proxied by the size of the Islamic banking assets) weakens the depth of outreach of MFIs (measured by average loan size). In countries with growing Islamic banking, MFIs appear to shift their focus toward wealthier clients, potentially due to market saturation among the poor. This is evidenced by MFIs offering larger loans, suggesting a mission drift toward profit maximization. Therefore, it can be inferred that competition from Islamic banks, to some extent, erodes the social mission of MFIs.

This study is among the few to examine the recent and comprehensive relationship between Islamic banking development and the social mission of MFIs.

This study aims to examine the role of Islamic microcredit programs based on the achievement of Maqasid Al-Shariah. Past studies have evaluated the role of microcredit programs using the conventional assessment approach. However, the conventional system of socioeconomic role assessment cannot evaluate the performance of Islamic microcredit in terms of achieving the objectives of Shariah for the Islamic microcredit model.

This paper uses primary data that were collected through a questionnaire survey distributed among 393 microcredit borrowers from Amanah Ikhtiar Malaysia (AIM). The survey was conducted from July 2013 to December 2013 in the State of Sabah and in Peninsular Malaysia. This research also analyzes the socioeconomic roles and the achievement of microcredit and microenterprise from the perspective of the five principles of Al-daruriyyat from Maqasid Al-Shariah.

Results indicate that the microcredit program of AIM has a positive and enhancing effect on the livelihood of clients. This effect is reflected in the assessment of their well-being, especially in the context of Maqasid Al-Shariah.

This study examines the role of Islamic microcredit based on the achievement of Maqasid Al-Shariah.

The low-income groups in developing nations need microcredits to support their family needs. As banks avoid providing microcredits due to high costs, microfinance institutions are the last resort for this segment of society. The cost of borrowing for the borrowers is indeed high. However, these microfinance institutions play a significant role in financial inclusion. In Muslim countries where financial inclusion takes a hit as a portion of society does not want to indulge in usury transactions, Islamic microfinance institutions play a vital role. In this chapter, the focus is on the Islamic microfinance institutions and their role in achieving the objectives of Shari'ah (maqasid al-Shari'ah) along with the fulfillment of goal of financial inclusion. A case study of Akhuwat Foundation found that the institution offers different interest-free microcredit products along with free healthcare and clothing to the needy segment of society. In this way, not only that the financial inclusion is achieved but also the objectives of Shari'ah are fulfilled. The study provides key facts to the academia and microfinance industry in achieving financial inclusion and fulfilling maqasid al-Shari'ah altogether, in which the banking sector is lacking.

Though microfinance has been working for many years as a tool to eradicate poverty from its root, most of the least developed and developing countries are yet to significantly alleviate it from the society. The purpose of this paper is to focus on Shariah-based microfinance products in the context of sustainable poverty alleviation approach and provide them financial benefits to enhance their livelihoods.

Here, this qualitative study critically analyzes the basics of the sustainable Islamic microfinance to exterminate the level of poverty.

Islamic microfinance is a more ethical practice than the traditional motives of profit maximization, and it encourages extending the time of repayment if the debtors are in hardship. In some case, it suggests to give charity if the creditor has capability.

Most importantly, research scholars and experts have already criticized the concept of conventional microfinance on the basis of various points, especially for its high rate of interest.

Islamic microfinance is provided with a view to fulfill two tools simultaneously, i.e., social and financial inclusion. In this case, credits and Zakah can be given to the extreme poor people for satisfying basic needs. In terms of social responsibility, Islam encourages the people to be soft in case of collecting the lending money.

The study discoursed that sustainable Islamic Microfinance (IM) may be a promising future option to draw the attention of the religiously sensitive people toward the Shariah-based microfinance which can, in turn, mitigate the poverty level.