An aspirational hope of a Sharīʿah-based microfinance model to alleviate extreme poverty

Abstract

Purpose This study aims to propose a Sharīʿah-based and information and communication technology-driven microfinance model (SIMM) to reduce extreme poverty in rural areas. Existing microfinance models run by microfinance institutions exclude severely poor individuals from their activities. Design/methodology/approach This study uses an exploratory sequential mixed-method design structured as Studies 1 and 2. Study 1 uses the grounded theory methodology to develop the emergent SIMM through interviews and focus group discussions with the participants (12 rich, 6 rural elites and 18 poor) of the target village. Study 2 uses a survey of 421 household members in the target village to evaluate their attitudes (ATT), subjective norms (SN) and perceived behavioural control (PBC) related to SIMM. Partial least squares-based structural equation modelling is used to evaluate relationships between constructs. Findings Study 1 identifies seven themes, in which aspirational hope is recognised as a core theme. Study 2 indicates significant relationships between ATT and PBC and between SN and PBC. Thus, the SIMM can alleviate poverty in rural communities. Practical implications The application of the SIMM in the pilot study provides aspirational hope for eradicating extreme poverty. Social implications Other rural communities should be encouraged to apply the SIMM to alleviate extreme poverty in their villages. Originality/value This study contributes to the development of an innovative microfinance model (SIMM) to eradicate extreme poverty in rural areas.