ISLAMIC MICROFINANCE AND POVERTY REDUCTION IN HODAN DISTRICT MOGADISHU, SOMALIA
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https://doi.org/10.5281/zenodo.16482356Keywords:
Islamic microfinance, Murabaha, Qard-al-Hasan, Salaam Poverty.Abstract
This study was carried out to investigate the relationship between Islamic microfinance and poverty reduction in Hodan District of Somalia. It was conducted under three specific objectives namely; (i) to examine the relationship between Murabaha and poverty reduction in Hodan District of Somalia, (ii) to find out the relationship between Qardhul hasan and poverty reduction in Hodan District of Somalia and (iii) to identify the relationship between Salam and poverty reduction in Hodan District of Somalia. The study employed a correlational research design and a quantitative approach. A simple random sampling technique was used to select 148 respondents who were involve in the study. Data was collected using self-administered questionnaires and was analyzed based on a Pearson’s Correlation Analysis as used in the SPSS computer program. The study findings based on Pearson’s correlations revealed that; (i) there is a statistically significant positive and weak relationship between Murabaha and poverty reduction in Hodan District of Somalia (r =.264, Sig-value = .003 < .01), (ii) there is a statistically significant positive and strong relationship between Qardhul hasan and poverty reduction in Hodan District of Somalia (r = .752, Sig-value =.000 < .01) and (iii) there is a statistically significant positive and strong relationship between Salam and poverty reduction in Hodan District of Somalia (r = .628, Sig-value = .000 < .01). Qardhul hasan was found to be the best model for poverty reduction in Hodan District of Somalia since it had a higher correlation coefficient of (r = .752) compared to the other models.
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