Going 'Beyond Microfinance': Enhancing Islamic Microfinance Programmes in Bangladesh
Microfinance programmes have been operating in Bangladesh since the early seventies. With the Bangladesh Rural Advancement Committee (BRAC) and the Grameen Bank (GB) as the pioneers, many other Non Governmental Organizations (NGOs) and Microfinance Institutes (MFIs) have grown up to provide banking services to the ‘bankless’ poor of the society. Most of these MFIs disburse cash loans, and in most cases at a high rate of interest. Of course, interest as riba is among the gravest of prohibitions in Islam. Besides, a majority of the clients who take such microfinance loans often live below the poverty level, and have their own priorities to meet before investing the loan in a profit-bearing investment. As a result, the loans turn out to be consumption loans without resulting in any profit to pay the interest therefrom. In the long run, the clients fall into the ‘debt-trap’ and get poorer. This paper suggests that if instead of disbursing cash facilities, the clients were provided with employment under specific projects of which some portions could also be sold to them after the project has recovered its capital, poverty eradication ought to become an easier task. This then goes ‘beyond microfinance’ facilities.