Muhammad, Aliyu DahiruHasan, Zubair2026-03-192026-03-1920092026Muhammad, A. D., & Hasan, Z. (2009). Microfinance in Nigeria and the prospects of introducing an Islamic version in the light of selected Muslim countries’ experience. Review of Islamic Economics, 13(1), 155–174.https://repository.iou.edu.gm/handle/123456789/290Widespread poverty remains one of the most pressing challenges facing humanity today, making its alleviation a central global priority. In recent years, microfinance has emerged as an important tool for poverty reduction, particularly in developing countries. Currently, more than 7,000 micro-lending institutions provide financial services to over 25 million low-income individuals worldwide, the majority of whom are women. Despite this progress, these institutions face significant challenges, especially in less developed countries where poverty levels remain high. In Nigeria, the reach of existing microfinance services remains limited, serving fewer than 1 million people out of an estimated 40 million potential beneficiaries. Furthermore, microcredit facilities account for only about 0.2% of GDP and less than 1% of total credit in the economy. Such limited coverage constrains the effectiveness of microfinance in addressing poverty and, if not adequately improved, may further hinder economic growth and development. Additionally, many microfinance institutions in Nigeria charge extremely high interest rates—sometimes reaching up to 100% on loans—while offering very low returns on savings, often around 5%. This disparity exacerbates existing inequalities in income and wealth distribution. Given that Nigeria has a significant Muslim population, there is strong potential for Islamic microfinance, particularly since many Muslims avoid conventional interest-based financial services due to religious considerations. This misalignment may also limit the effectiveness of government-led poverty alleviation programs that rely on conventional microfinance models. In this context, Islamic microfinance presents a more suitable alternative, offering ethical and faith-compliant financial solutions that could better serve the population. This study draws on sources from Shari’ah law, as well as secondary data from journals, periodicals, conference proceedings, textbooks, internet sources, and other published materials to support its arguments.enIslamic microfinanceNigeriaPoverty alleviationArticle