• Amela Trokic University of Sarajevo
  • Eldina Karamustafic
  • Velid Efendic


This study aims to investigate and determine how different client characteristics affect the way beneficiaries benefit from financing provided by microfinance institutions. Data for this study was gathered from both beneficiaries of conventional and Islamic microfinance, using a questionnaire as the main data collection instrument. A total of 263 beneficiaries were contacted via telephone while 84 valid responses were collected for analysis. The results show how MFI financing benefits clients differently based on given characteristics, as well as how these socio-economic benefits differ based on whether the financing is provided by a conventional or an Islamic MFI. Overall, conventional and Islamic MFIs have similar strategies when it comes to providing socio-economic benefits to their clients. Where age is concerned, both prioritize healthcare when it comes to elderly clients, while education opportunities, employment prospects and support for increasing income are more likely to benefit younger clients. Clients with a higher education are more likely to benefit from MFIs in nearly all respects, as are married individuals. Both types of MFIs are similarly concerned with providing aid to those who need it the most, such as families with more dependents who could either be children or the elderly. However, where conventional and Islamic MFIs diverge in their socio-economic benefit to clients is when we consider client gender. While both benefit women in terms of providing better access to education, when it comes to almost every other socio-economic aspect, conventional MFIs benefit male clients more. IMFIs are more likely to benefit women, especially where efforts to assist in increasing income are concerned. This research is beneficial to MFIs in terms of the development of their services as it helps them identify the strengths and weaknesses in their offering and how well it is able to assist them in fulfilling their purpose of providing benefit to the poorest of the poor, increasing financial inclusion and contributing to socio-economic development.


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How to Cite
Trokic, A., Karamustafic, E., & Efendic, V. (2020). SOCIO-ECONOMIC BENEFITS OF MICROFINANCE: CONVENTIONAL VS. ISLAMIC. Journal of Islamic Monetary Economics and Finance, 6(1).