The Impact of Islamic Microcredit on Economic Development of Women in Somalia

Abstract

Islamic financial institutions are obliged to adhere to Shari’ah principles, which promote ethical financial transactions. These institutions prioritize not only their business concerns but also strive towards broader socio-economic development objectives. Microcredit services play a crucial role in facilitating the achievement of these goals and aligning with the overarching Shari’ah objectives. The purpose of this research is to scrutinize the impact of Islamic microcredit on the economic advancement of women in Somalia. To explore the correlation between microcredit provision and women’s economic progression, a correlational research design was selected as an appropriate approach. Primary data collected from 135 respondents were then subject to analysis using SPSS software. Substantive evidence emerged suggesting a substantial positive association between microcredit services and women’s economic development. Consequently, our findings demonstrate that both microcredit provision and overall economic progress exhibit statistically significant positive effects on the economic advancement experienced by women within Somalia. The research findings suggest that a higher degree of adoption of microcredit services has the potential to enhance women’s financial status, self-assurance, and improve their chances for uplifting themselves from poverty. Consequently, these outcomes can contribute to the overall progress and well-being of society as a whole.