The Potential of Zakat Scheme as an Alternative of Microcredit to Alleviate Poverty in Bangladesh

Type Working Paper
Title The Potential of Zakat Scheme as an Alternative of Microcredit to Alleviate Poverty in Bangladesh
Author(s)
Publication (Day/Month/Year)
URL http://9icief.sesric.org/presentations/Day1/Session8/1-7-Sajit Chandra Debnath - The potential of​zakat scheme as an alternative.docx
Abstract
This study assesses the effectiveness of Zakat as an alternative to microcredit in alleviating poverty in Bangladesh. Through the Propensity Score Matching (PSM) techniques, this study reveals that the impact of zakat scheme has proven higher than microcredit programs. Besides, this study also discloses that zakat scheme significantly increases both income and expenditure of the recipients in comparison to microcredit program. Hence, the study concludes that zakat based poverty alleviation program should be given more importance than that of microcredit program which virtually failed to bring any significant change in reducing poverty in Bangladesh.

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