Islamic economic system centrally focuses on socioeconomic justice and overall welfare of the society especially the bottom of the pyramid segment. Qard-al-Hassan, alongside zakat and sadaqah, is one of the instruments of redistribution of income and wealth from the rich to the poor in Islam. In 2007, Bangladesh struck by super cyclone SIDR, leaving 3,406 people dead. Moreover, the SIDR caused unprecedented damage to homes, crops and livelihoods. Fael Khair Waqf (FKW) Program came as a response to the urgent need for assisting the victims of SIDR which initiated an interest-free micro-loan (Qard-al-Hassan) scheme to restore the livelihoods of a large segment of victims and to uplift them from poverty. While investigating the effectiveness of Qard-al-Hassan in poverty reduction, this paper has examined FKW program as a case. This study conducted an analysis on 1600 households using independent sample t-test and logistic regression to investigate to what extent FKW program has been effective in reducing poverty. The finding of the logistic analysis is that the probability of being poor for FKW participants is around 1.46 times lower than the non-participants. Moreover, Qard-al-Hassan of FKW lowers the cost of borrowing significantly and hence the participants can accumulate more assets which might help them to improve their economic status after the cyclone. Overall, the effectiveness of this program implies that the development practitioners and researchers should promote the outreach of Qard-al-Hassan so that extreme poor can easily avail the services.

Purpose This paper aims to investigate the effectiveness of Qard-al-Hasan (QH) or interest-free loan in reducing multidimensional poverty through examining Fael Khair Waqf (FKW) program as a case. Design/methodology/approach A Multidimensional Poverty Index (MPI) approach has been used in this study, which was conducted over 1,600 households including 1,200 program households in 40 villages and 400 control households in 20 villages of 8 districts in the south-western region of Bangladesh. Findings It is found that 38.5% of sample population was multidimensional poor with deprivation of above the cutoff score. However, FKW participants were relatively less multidimensional poor. It was 35.3%. Hence, it is argued that the FKW is an effective program in terms of poverty reduction as it has contributed to higher economic outcomes for their participating households. The econometric result also suggests that the likelihood of the participants of FKW to be MPI poor is around 1.5 times lower than the nonparticipants, and the result is significant at 1% level. This indicates that program has a positive impact in reducing multidimensional poverty. Practical implications The analysis in this paper would fill the literature gap by investigating the link between application of QH and poverty alleviation. It will also guide academicians, researchers and decision-makers to design evidence-based policy to alleviate poverty. Originality/value To the best of the authors’ knowledge, there has been no empirical work in Bangladesh on the effectiveness of QH in poverty reduction considering an MPI approach. Hence, this study is a unique contribution to the literature of Islamic social finance.

The analysis, using an online survey, captures the adjustments in economic behaviour and changes in the choice of financial instruments by the urban middle class in Bangladesh due to Covid-19 pandemic. It shows that 43 per cent of the surveyed households suffered income losses—57 per cent belonging to lower middle class (LMC) and 19 per cent to upper middle class (UMC) households. Nearly one-third of the LMC households reduced their food costs compared with 6 per cent of the UMC households. The pandemic has also initiated large scale changes in their financial behaviour more towards digital and online markets with nearly twothirds reporting high reliance on online purchases. The observed changes indicate a long term transformation in the financial behaviour of the middle class households. Complementary evidence highlights the need for reducing their vulnerability since rising expectations of the expanding middle class are the critical drivers of social change in Bangladesh. The key to such dynamic transformations is the creation of a more learning middle class—a dynamic middle class that would be ready to exploit the opportunities of the ‘new normal’ after the Covid-19 pandemic.

This paper examined the impact on employment of a credit plus program designed for ultra-poor households in the Northwest region of Bangladesh. Both descriptive and econometric techniques were used, and four regression models were estimated for each of the dependent variables with linear and log-lin specifications: one is a simple model considering only time effect and program effect, and the others were the extended models which included various characteristics of the households and the regions. The descriptive analysis showed that most of the beneficiary households had shifted from single earning members to multiple earning members. Women had started to contribute to household earnings. The results showed that the participant ultra-poor households had gained around 21.1% additional employment days due to the program participation opportunities within 2008-2013, with an annual rate of 4.2% gain. The extra earning days included wage-employment days and self-employment days and the results showed that due to the program, the wage-employment days had increased by 2.6% annually and the self-employment days increased by 6.6% annually holding the effects of other explanatory variables constant. The working days of non-participants had increased but at a lower rate than that of the program participant households. The results confirmed that the credit program for ultra-poor households had a significantly positive effect on the creation of employment days and employment opportunities.