Islamic microfinance comes up as an approach to alleviate poverty by complying Shariah principles. But the programme
can be successful only if people know about it. Therefore, a review of literature has been done corroborated with the
opinions of people as empirical facts in this regard in order to arrive at the results. The present study strived to study
the approaches which Islamic microfinance could resort to and factors that help this programme to alleviate poverty.
It also deals with how government and donors could contribute towards the poverty-reducing capabilities of Islamic
microfinance programme. The study is based on primary data collected through questionnaire distributed to a
sample of 100 respondents. The stratified sampling technique was followed for the selection of samples. Various
statistical tools such as mean, standard deviation and analysis of variance (ANOVA) were employed to analyse the
data. The study revealed that law and regulatory framework could become impediments in the path of Islamic
microfinance and this appeared as a major challenge for the provider of this programme.

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