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Poverty and Empowerment

Samia Ahmed of UK charity Islamic Relief shares their work in the field of microfinance in vulnerable communities.

Microfinance loans can give poor communities the means to make a sustainable living through setting up income generating activities, such as small scale businesses. Islamic microfinance loans do not charge interest and there is usually no penalty for late payments.


Improving access to financial services through microfinance loans as a means of reducing poverty and extreme income inequalities can play a vital role in helping poor people establish and expand their source of livelihood. This in turn contributes to increasing self-reliance and the economic autonomy of micro-entrepreneurs, particularly women.


Empowerment is the way forward
Empowering women in developing countries is essential because, often owing to natural disasters, conflicts, or economic problems, a large number of women lose the main breadwinner of the family and find they are unable to cope. These women may not have had the opportunity to develop any skills in order to undertake well-paid jobs or have the capital to start up their own business.



At the heart of Islamic Relief’s livelihood support work is empowering women to generate their own income. In this context, empowerment is about developing confidence by giving women the tools and finance to be able to work for themselves and not rely upon help from others. Furthermore, empowering women through Islamic microfinance schemes can lead to future growth and prosperity in their initiatives. It also enables women and their families to be lifted out of poverty, giving them and their children better opportunities for the future and a better quality of life.



It is strongly encouraged in Islam to not rely on others but find a way to generate your own income.



Islamic Relief currently has three impending projects that assist women through providing microfinance loans and livelihood support.

NIGER: Supporting widows   
Niger is one of the poorest countries in the world and ranks last on the United Nations Human Development Index. It also has the world’s highest infant mortality rate.



Islamic Relief has been working in Niger since the 2005 drought. One of our key projects is providing poor women, particularly widows, with income-generating opportunities in Kollo and Say Districts, in the Tillaberi Region. Islamic Relief facilitates by helping community members organise themselves in groups and build up self awareness and confidence. The credit groups also receive training in basic book-keeping skills, small enterprise and credit group management and loan repayment.



What will this project achieve and how?
• This project will provide loans through village banking to 280 women.
• The women will be clustered in groups of around 20 widows with similar economic and social backgrounds and they will be provided with funds that are placed in a group bank account.



What will this project enable?
• The group, by using its own analysis and local knowledge, will approve business loans to individual women.
• The primary purpose of the association is to provide local community loan facilities to establish and develop small enterprise initiatives.



Who will benefit from the project?
• Indirectly the project will benefit at least 1,400 people.
• During the second year, the revolving fund established during the first year will provide Islamic microfinance loans to another 280 women



What will it cost?
• The total project cost is £60,000 to benefit 280 women directly and 1,400 people indirectly in the first year.
• The cost to support each beneficiary is £215.



Hadizo Boubacar is a 43 year old divorcee from Tillakaina in Niger and is responsible for nine family members including her children, siblings and her mother.



“There is not enough space for our beds and mattresses here,” she told Islamic Relief. “We use one bed with two places for three people in the cool or rainy season.”



Hadizo has a very busy schedule from morning to evening. She runs her household and also earns a living selling cakes and fragrances in the village market. Some of the difficulties Hadizo faces are that she has insufficient capital, lacks the means for trade and has little knowledge or training that would allow her to maximise her business potential.



Hadizo is keen to develop her small business so that she can support her family and give her children a good education with hope for a better future. “Before it was my husband who took care of everything. But now I’m divorced I’m doing everything by myself.”



BANGLADESH : Supporting women affected by natural disasters
In Bangladesh many people are forced to live in poverty due to the occurrence of frequent natural disasters. These disasters not only cause the loss of lives, homes and livelihoods, but have led to the migration of poor communities from rural to urban areas, with Dhaka attracting the highest numbers of internally displaced people.



However many people from rural backgrounds arrive in the city with few vocational skills that they can use to find employment. Women in particular lack basic education and training and are often faced with no choice but to take up unskilled work for a very small wage. These women are desperate to earn a decent living and support their families but lack the education and skills to do so.



Who will benefit from the project?
• Women and widows of all ages from very poor families.
• The poorest residents of Dhaka city who have been migrating from various districts over the years.



What will this project achieve and how?
• The project will provide life skills and vocational training in trade courses.
• The courses will enhance the trainees’ ability to earn a decent living and live with dignity and independence.
• It will improve numeracy and literacy education among the target group.
• Entrepreneurship and skills development will be offered through participation in community work.



What will it cost?
• The total project cost is £53,000 to benefit 198 women directly and 1188 people indirectly in the first year.
• The cost to support each beneficiary is £267.



Hashina Akhter, aged 27, is from the Shariatpur district and has had physical disabilities from birth. Her father works as a day labourer but cannot maintain his family on his small income.



As the eldest of six siblings, Hashina began thinking about helping her family. “I heard an announcement that Islamic Relief’s Vocational Training and Employment Support Service (VTESS) in Mohammadpur provides vocational training and help with finding work, at no cost. So I joined and completed my training in handicrafts trade in June 2005. After training, I decided to become an entrepreneur and started collecting orders. In the beginning, my monthly average income was just Tk.500. Now I am providing three meals a day for my family and the treatment costs for my mother just from my income.”



“Having seen my work and the improvement in my quality of life, people from the local refugee camps and slums asked me to give similar training to their children. I am grateful to Islamic Relief for this opportunity and want to become a good entrepreneur by applying all the skills and training I acquired.



“I now have six employees in my business who have all graduated from the VTESS programme. Some of them are disabled too. Now I am the main breadwinner in my family and my life has turned around for the better.”



Supporting Islamic Relief’s livelihood projects for women will help lift people out of poverty, develop their confidence and empower vulnerable social groups. It will also enable their capacity to earn a sustainable living, free from ongoing debt and dependence on aid.


To make a donation or learn more, visit www.islamic-relief.org.uk