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- Title
IS THERE ANY DIFFERENCE BETWEEN ISLAMIC AND CONVENTIONAL MICROFINANCE? EVIDENCE FROM BANGLADESH.
- Authors
Abdullah, Md. Faruk; Amin, Md. Ruhul; Ab Rahman, Asmak
- Abstract
This study aims to compare the microfinance operation of Grameen Bank and the Rural Development Scheme of Islami Bank Bangladesh Limited. Qualitative approach is employed to obtain in-depth information concerning the operation of Grameen Bank and Rural Development Scheme.The data were collected through interviews conducted with Grameen Bank and Islamic Bank Bangladesh Limited officers and the customers of both microfinance providers.The study found that Grameen Bank was an interest-based microfinance organization, which used peer pressure as collateral for distributing loans, while the Rural Development Scheme implemented different types of investment modes to finance the poor. Moreover, it targeted the family as borrower instead of merely targeting women. Although Grameen Bank had a higher number of members and greater coverage, in some cases, the performance of the Rural Development Scheme was better, such as the effectiveness of the credit. Although conceptually Islamic microfinance is different from the conventional microfinance but few studies have been done on how they differ each other in terms of their operations. The study may contribute to determine the weaknesses and strengths for both types of institution.
- Subjects
BANGLADESH; MICROFINANCE; ISLAMIC finance; BANKING industry; ISLAMI Bank Bangladesh Ltd.; GRAMEEN Bank (Company); COLLATERAL security
- Publication
International Journal of Business & Society, 2017, Vol 18, p97
- ISSN
1511-6670
- Publication type
Article