Impact of Islamic and Conventional Microfinance on Poverty Alleviation: A Comparative Study

Purpose: This study investigates the impact of microfinance on poverty alleviation and compares the effects of both Islamic and conventional microfinance for poverty alleviation. Design/Methodology/Approach: This cross-sectional research has adopted a quantitative research design, and a survey research strategy has been used for collecting data from microfinance clients. The data are analyzed through SPSS and AMOS software. Findings: Both Islamic and conventional microfinance are found to be helpful in poverty alleviation, wherein Islamic microfinance is found to be more suitable for poverty alleviation than the conventional microfinance. Originality/Significance: This study represents the initial attempt to comprehensively compare the efficacy of Islamic and conventional microfinance in alleviating poverty, based on the available knowledge. Additionally, it emphasizes the significant impact of Islamic microfinance on poverty alleviation. Research Limitations/Implications: This study provides useful implications to policymakers and practitioners for improving microfinance strategies aiming to fulfill the objective of poverty alleviation. Further, it provides policy recommendations for microfinance institutions, donors in the microfinance sector, and the government.