Microfinance: Learning from Islami Bank Bangladesh Limited (IBBL)

Abstract

The Rural Development Scheme (RDS) of Islami Bank Bangladesh Limited (IBBL) was introduced in 1996 with the objective of eradicating poverty and to involve the largest number of village-living poor folks to create opportunity for income generation and employment of the rural poor. RDS, despite its limitations, has proven itself as an alternative microfinance program to the conventional microfinance providers and Non-Governmental Organizations (NGOs) in Bangladesh. This paper, aims at analyzing the success of the RDS of IBBL throughout the past few years, and testing its effectiveness as an alternative to the conventional microfinance programs which are mainly based on interest-bearing loans.