Scaling up Islamic Microfinance in Bangladesh through the Private Sector: Experience of Islami Bank Bangladesh Limited (IBBL)
Islami Bank Bangladesh Limited, a private sector Islamic bank, developed the Rural Development Scheme (RDS), an innovative Islamic microfinance channel to answer the demand of the rural Muslim poor in Bangladesh who were left out from conventional micro financing due to religious beliefs. This case study analyses the key enablers that facilitated the expansion of RDS, from a pilot project covering four villages in 1995 to a widely recognized model in poverty alleviation benefiting more than 600,000 people. The RDS scaling up process was made possible by a number of key enablers: cultural environment, a conducive policy environment, institutional and organizational capacity and a dedicated management with the vision to scale up the RDS programme in Bangladesh.
This case study also attempts to promote south-south learning and knowledge exchange by highlighting the lessons learned from RDS which can serve as an example for countries to emulate it in terms of its sustainably and transferability. It also provides some of the challenges that are currently hindering the scaling up of Islamic microfinance programmes in many Muslim majority countries.