HARNESSING ISLAMIC MICROFINANCE FOR SUSTAINABLE DEVELOPMENT IN SOUTH EAST ASIA AND SOUTH ASIA COUNTRIES: A META-ANALYTIC EXPLORATION

Abstract

This study aims to analyse the role of Islamic microfinance in advancing the Sustainable Development Goals (SDGs) in developed regions of Southeast Asia and South Asia, including Indonesia, Malaysia, Pakistan, and Bangladesh, by conducting a meta-analysis of the existing literature. Utilizing a bibliometric approach, the research systematically reviews and synthesizes data from various studies published between 2014 and 2025 (N=32). Key analytical techniques include co-occurrence and citation analysis, supported by meta-analysis and systematic data extraction following PRISMA and PSALSAR guidelines. The findings reveal that Islamic microfinance significantly contributes to poverty reduction, women’s economic empowerment, and rural economic growth, especially in predominantly Muslim countries (rRE=0,899, p-value<0,001). Despite the successes, challenges such as limited outreach, sustainability concerns, and accessibility to marginalized communities remain significant. The study underscores the importance of governance frameworks aligned with Sharia principles, which enhance microfinance's ethical and social impact, thus aligning with SDGs related to poverty, gender equality, and decent work. By identifying effective strategies and areas for improvement, the study offers insights into policy and operational frameworks that can enhance the effectiveness and sustainability of Islamic microfinance as a tool for socio-economic development.