Contemporary Islamic Finance: Innovations, Applications and Best Practices

CHAPTER 14

An Integrated Islamic Poverty Alleviation Model

ALI ASHRAF

University of New Orleans

M. KABIR HASSAN

University of New Orleans

POVERTY: CONCEPTS AND VIEWS

Poverty is a multidimensional economic phenomenon that has both political and social ramifications. It exists throughout generations and societies irrespective of cultural affiliation and geographical boundaries. Although the nature of poverty may vary from community to community, from culture to culture, and from time to time, poverty persists in both rural and urban areas alike; and also in both developed and developing economies.¹

Definition of Poverty

Schubert (1994) identifies and establishes different poverty features. Poverty is less extensive in urban than in rural areas, as chances of employment and income growth in urban areas are higher. As agricultural activities are associated with the uncertainty of natural disasters and cyclical properties of crop and climatic cycle, the rural poor who are dependent on agriculture suffer from poverty of a seasonal nature.

The urban poor generally engage in low-skilled and low-paying jobs such as day laborer, mason, cleaner, and so forth. There is a cause-and-effect relationship between family size and poverty. Larger families are more likely to suffer from severe poverty than smaller ones. Lack of education and poverty also has a cause-and-effect relationship as lack of education leads to low levels of human capital and capacity. In general, poverty density is relatively ...