International Journal of Islamic and Middle Eastern Finance and Management

Purpose – This paper describes a scheme which aims to alleviate rural poverty by providing small and microinvestment to the agricultural and rural sector for generating employment and to raise the income of the rural poor.

Design/methodology/approach – To assess the impact of rural development schemes on rural poor's livelihood, primary data were collected from 1,020 clients working across the country. Multistage random sampling method was followed to select the clients. Tabular, graphical, and econometrical methods were followed to analyze the data.

Findings – Results show that household income, productivity of crops and livestock, expenditure, and employment had increased significantly due to the influence of invested money. Results of the Logit-model showed that clients' socio-economic factors like age, number of family members in farming, total land size and clients' ethics and morals had a positive and significant influence on household income.

Practical implications – Client's opined that the microinvestment program had provided them with the opportunity to perform their economic activities in a more organized way, leading them to the higher quality of life and also develops their awareness towards health care, proper sanitation, and drinking safe water.

Originality/value – The paper recommends the replication of this program in other rural areas of the country with the increment of investment size, demand-led effective training on different income generating activities and monitoring on more shariah compliance of the investment mode.