Abstract: Poverty is a multi-dimensional phenomena and a result of a complex socio-economic and political structure of a particular country. It is associated with poor economies, poor human resources, poor social services provision and poor policies to tackle the challenges facing human and socio-economic development. The issue of "poverty eradication" and "access to finance "are important ends in Islamic economic development, hence, the need to focus on a broader approach in evaluating the condition of people in Muslim society. The main objective of this study is to explore the conceptual framework on the role of Shariah compliant micro-finance to eradicate poverty. Use of risk-sharing financing instruments can offer Shariah-compliant microfinance, financing for small and medium enterprises and micro-insurance to enhance access to finance and redistributive instruments such as Zakat, Sadaqat, Waqf and Qard-al-Hassan complement risk-sharing instruments to target the poor sector of society to offer a comprehensive approach to eradicating poverty and to build a healthy and vibrant economy. The methodology of this study is based on analysis of relevant theories. The findings of the study indicate that Shariah-compliant micro-finance is a growing market niche with a comprehensive approach towards socio-economic justice. Zakat and Waqf institutions are requisite for generating community assets, productive capacity building, wealth creation and knowledge and skills that will enhance the technical standing of entrepreneurs. This approach towards poverty eradication of less affluent Muslims before and since Shariah compliant finance was introduced.