Impact of Rural Development Scheme on Poverty Alleviation: A Case Study

A spectacular growth of micro-credit did not contribute much to poverty alleviation in Bangladesh. In order to address the problem properly, an Islamic microfinance model Rural Development Scheme (RDS) was implemented since 1995 by the Islamic Bank Bangladesh Limited (IBBL). This paper assesses the main objective of RDS, which sought to implement an integrated program of income generation, education and sanitation for fulfillment of basic needs and the overall betterment of targeted poor households. This paper questions the assumption that the success of microfinance programs depends on their impact in raising the income of their members and ultimately on improving the living standard of the poor. The aim of this paper is to assess the extent to which this objective has been achieved by RDS of IBBL. Identification of the contributory factors of RDS in poverty alleviation shall pave the way for diversification of RDS activities and development plans.