Zakat and Islamic Microfinance Integration for Rural Poverty Alleviation in Northern Nigeria
Article Sidebar
-
Financial Inclusion, Islamic Microfinance, Poverty Alleviation
Abstract
Poverty remains a persistent challenge in Northern Nigeria, where rural communities face limited access to formal financial services, weak economic infrastructure, and high unemployment rates. Zakat, as a pillar of Islamic social finance, has historically served as a mechanism for wealth redistribution, while Islamic microfinance offers interest-free financial inclusion tools for underserved populations. Despite their individual strengths, these instruments are often implemented in isolation, limiting their long-term impact on poverty alleviation. This study aims to investigate the integration of zakat and Islamic microfinance as a comprehensive and sustainable model for rural poverty reduction in Northern Nigeria. A mixed-methods approach was adopted, combining qualitative interviews with zakat administrators, microfinance practitioners, and rural beneficiaries, alongside a survey of 250 households across three rural districts. Results indicate that the combined model enhances both short-term welfare and long-term financial independence by linking zakat-based capital injection with microfinance schemes focused on capacity building, entrepreneurship, and risk-sharing. The study concludes that zakat-microfinance integration is not only feasible but essential for achieving inclusive economic development in Islamic contexts. Policy recommendations emphasize institutional coordination, regulatory support, and community engagement to scale the model.
Full text article
References
Akahome, J. E., & Ogodo, S. (2024). Exploring Hurdles in Accessing Islamic Microfinance for Sustainable Poverty Reduction in Nigeria. Dalam Contrib. Manag. Sci.: Vol. Part F3298 (hlm. 239–254). Springer Science and Business Media Deutschland GmbH; Scopus. https://doi.org/10.1007/978-3-031-61778-2_13
Alam, A., Ratnasari, R. T., Nurrochman, D. D., & Rahmawati, E. (2024). Google Play review analysis of digital mobile applications of Islamic microfinance institutions. International Journal of Advances in Applied Sciences, 13(3), 717–726. Scopus. https://doi.org/10.11591/ijaas.v13.i3.pp717-726
Ascarya, A. (2024). An investigation of waqf-based Islamic micro financial institution models to identify the most effective model for Indonesia. Journal of Islamic Accounting and Business Research. Scopus. https://doi.org/10.1108/JIABR-12-2022-0325
Aziz, A., Iqbal, J., Murtza, M. H., Gill, S. A., & Cheema, I. Y. (2024). Effect of COVID-19 pandemic on women entrepreneurial sustainability: The role of Islamic microfinance institutions. Journal of Economic and Administrative Sciences, 40(4), 819–836. Scopus. https://doi.org/10.1108/JEAS-08-2021-0166
Ben Jedidia, K., & Ghroubi, M. (2024). Islamic finance and SDGs: Bibliometric review and future research agenda. Journal of Chinese Economic and Business Studies. Scopus. https://doi.org/10.1080/14765284.2024.2445959
Fraedrich J., Pirtskalava M., Khoshtaria T., Terzi H., Bayirli M., & Al Serhan B. (Ed.). (2024). 14th Global Islamic Marketing Conference, GIMAC 2023. Dalam Springer Proc. Bus. Econ. Springer Nature; Scopus. https://www.scopus.com/inward/record.uri?eid=2-s2.0-85206070613&partnerID=40&md5=6ce4e4026207d336d9db58c95bf9b4c8
Hijriah, H. Y., Rusgianto, S., Kholidah, H., Herianingrum, S., & Md Sahiq, A. N. (2024). Critical development of Islamic financial technology ecosystem: Lesson learned from financial technology literature. Journal of Islamic Accounting and Business Research. Scopus. https://doi.org/10.1108/JIABR-03-2024-0114
Hossain, M. I., Jibir, A., Mia, M. A., Abdu, M., & Chauhan, S. (2024). Sand or grease effect? The impact of Islamic banking on the social mission of microfinance institutions. International Journal of Islamic and Middle Eastern Finance and Management, 17(5), 936–954. Scopus. https://doi.org/10.1108/IMEFM-04-2024-0191
Hussin, M. Y. M., Rahman, A. A., Ismail, Z., Muhammad, F., & Razak, A. A. (2024). Islamic Social Finance as Alternative Mechanism for Well-being of the Community: A Bibliometric Analysis. Pakistan Journal of Life and Social Sciences, 22(2), 6509–6533. Scopus. https://doi.org/10.57239/PJLSS-2024-22.2.00491
Khana, A., Zaidib, S. B., Mahmoodb, A., & Khanc, S. (2024). Achieving social well-being and financial inclusion through islamic microfinance: A case study of akhuwat islamic microfinance. Dalam The Future of Islamic Financ.: From Shari’ah Law to Fintech (hlm. 83–102). Emerald Publishing; Scopus. https://doi.org/10.1108/978-1-83549-906-120241006
Lawhaishy, Z. B., Haron, R., & Othman, A. H. A. (2024). Islamic Micro-financing forSMEs Towards Its Sustainability: An Experience From Libya. Dalam Islamic Finance and Sustainable Development: A Global Framew. For Achieving Sustainable Impact Finance (hlm. 32–46). Taylor and Francis; Scopus. https://doi.org/10.4324/9781003468653-6
Martiana, A., Kassim, S., & Zakariyah, H. (2024). Risk Mitigation Strategy for Agency Problems in Micro Business Financing of Baitul Maal Wa Tamwil: A Qualitative SWOT Analysis. Dalam Contrib. Manag. Sci.: Vol. Part F2529 (hlm. 615–626). Springer Science and Business Media Deutschland GmbH; Scopus. https://doi.org/10.1007/978-3-031-48770-5_49
Meiryani, M. (2024). Islamic accounting research for upcoming research agenda. Journal of Islamic Accounting and Business Research. Scopus. https://doi.org/10.1108/JIABR-10-2023-0332
Mi’raj, D. A., & Ulev, S. (2024). A bibliometric review of Islamic economics and finance bibliometric papers: An overview of the future of Islamic economics and finance. Qualitative Research in Financial Markets, 16(5), 993–1035. Scopus. https://doi.org/10.1108/QRFM-03-2023-0068
Morse, S. (2024). Giving and Receiving: Faith and the Sustainability of Institutions Providing Microfinance Services for Development. Sustainability (Switzerland), 16(5). Scopus. https://doi.org/10.3390/su16051923
Muhammad, N. M., Kassim, S., Mahadi, N. F., & Ali, E. R. A. E. (2024). Prospects of a Partnership-Based Islamic Microfinance Model in Bangladesh: Clients Perspectives. Dalam Contrib. Manag. Sci.: Vol. Part F2529 (hlm. 159–169). Springer Science and Business Media Deutschland GmbH; Scopus. https://doi.org/10.1007/978-3-031-48770-5_14
Muhammad, T., & Al-Shaghdari, F. (2024). Islamic social finance system: An alternative tool for tackling educational setbacks in Northern Nigeria. Journal of Islamic Marketing, 15(11), 3115–3136. Scopus. https://doi.org/10.1108/JIMA-05-2023-0149
Mutia, E., Aliamin, A., Rahmi, R., & Nailul, S. (2024). Does sharia board foster islamic microfinance bank performance of indonesia. Dalam Stud. Syst. Decis. Control (Vol. 525, hlm. 159–170). Springer Science and Business Media Deutschland GmbH; Scopus. https://doi.org/10.1007/978-3-031-54383-8_13
Othman, A. H. A., & Haron, R. (2024). Shari’ah instruments that facilitate Islamic green finance. Dalam Islamic Green Finance: A Research Companion (hlm. 144–157). Taylor and Francis; Scopus. https://doi.org/10.4324/9781032672946-20
Pattnaik, D., & Hassan, M. K. (2024). Mapping microfinance research to sustainable development goals: Insights from Scientometrics and BERTopic analysis. Journal of Economic Surveys. Scopus. https://doi.org/10.1111/joes.12669
Qadri, H. M. D., & Ali, H. (2024). Islamic Microfinance: Landscape, Models and Future Prospects. Dalam Islamic Microf.: Land., Models and Future Prospects (hlm. 164). De Gruyter; Scopus. https://www.scopus.com/inward/record.uri?eid=2-s2.0-85191533454&partnerID=40&md5=b3598405e9bc552c80aa84eb9f23f1e5
Raimi, L., Abdur-Rauf, I. A., & Ashafa, S. A. (2024). Does Islamic Sustainable Finance Support Sustainable Development Goals to Avert Financial Risk in the Management of Islamic Finance Products? A Critical Literature Review. Journal of Risk and Financial Management, 17(6). Scopus. https://doi.org/10.3390/jrfm17060236
Septianingsih, R., Abdullah, A., & Salleh, M. Z. M. (2024). A Systematic Review: Challenge of Islamic Microfinance Baitul Maal Wat Tamwil in Indonesia. Dalam Contrib. Manag. Sci.: Vol. Part F2529 (hlm. 19–26). Springer Science and Business Media Deutschland GmbH; Scopus. https://doi.org/10.1007/978-3-031-48770-5_3
Shaharuddin, S. S., Redzuan, N. H., & Rosman, R. (2024). Indicator of Social Impact Measurement in Microfinance: A Thematic Review. Dalam Stud. Syst. Decis. Control (Vol. 515, hlm. 325–336). Springer Science and Business Media Deutschland GmbH; Scopus. https://doi.org/10.1007/978-3-031-48479-7_27
Shikur, A. A., & Akkas, E. (2024). Islamic microfinance services: A catalyst for poverty reduction in eastern Ethiopia. International Journal of Islamic and Middle Eastern Finance and Management, 17(4), 770–788. Scopus. https://doi.org/10.1108/IMEFM-09-2023-0327
Siddiky, S., Swandaru, R., & Muneeza, A. (2024). Can micro-enterprises use Tawarruq Fardi Financing (TFF) for fund raising? PSU Research Review, 8(2), 540–552. Scopus. https://doi.org/10.1108/PRR-08-2021-0047
Vasudevan, A., Al Hadi, M. Q., Hulaify, A., Fitriana, Y., Komarudin, P., & Fajriyati, I. (2024). How Loyalty is Mediating Customer Satisfaction in Islamic Microfinance Institutions. Pakistan Journal of Life and Social Sciences, 22(2), 7763–7775. Scopus. https://doi.org/10.57239/PJLSS-2024-22.2.00585
Wahyudi, H., & Leny, S. M. (2024). Nexus between Islamic investment, Musyarakah Financing, Islamic Microfinance and Achieving SDGs in Indonesia. Journal of Ecohumanism, 3(7), 1976–1986. Scopus. https://doi.org/10.62754/joe.v3i7.4346
Wiwoho, J., Trinugroho, I., Kharisma, D. B., & Suwadi, P. (2024). Islamic crypto assets and regulatory framework: Evidence from Indonesia and global approaches. International Journal of Law and Management, 66(2), 155–171. Scopus. https://doi.org/10.1108/IJLMA-03-2023-0051
Yumna, A., Marta, J., & Yanuarta Re, R. (2024). The impact of waqf-based microfinance program on clients’ well-being during COVID-19 pandemic: Empirical evidence from Indonesia. Journal of Islamic Accounting and Business Research. Scopus. https://doi.org/10.1108/JIABR-02-2022-0040
Zain, N. R. M., Hasan, A., & Yusof, S. A. M. B. (2024). Al-Rahnu-Led Islamic Sustainable Finance. Dalam Islamic Finance and Sustainable Development: A Global Framew. For Achieving Sustainable Impact Finance (hlm. 130–140). Taylor and Francis; Scopus. https://doi.org/10.4324/9781003468653-15
Authors
Copyright (c) 2025 Ifeoma Okechukwu, Uchechi Akinyi, Samuel Ayodele, Chinonso Onyema
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
