Report by Malaysia International Islamic Financial Centre

Financial Inclusion

Governments around the world are increasingly viewing financial inclusion as an important part of economic development. More than 50 countries have set formal targets and ambitious goals for financial inclusion which is critical in poverty alleviation and in line with the main features of a Shariah-compliant.

While various Shariah compliant programmes in Malaysia, Bangladesh and Indonesia have seen significant success in poverty alleviation in those countries, substantial improvements are needed in terms of financial infrastructure to enable the world’s poor to benefit from economic advancement. With proper infrastructure and regulations in place Islamic finance will eventually contribute to a more inclusive economic growth.

Room for Growth

Islamic finance clearly has room to grow in supporting financial inclusion, given that account penetration rates in key regions such as the Middle East, Sub- Saharan Africa and South Asia remain fairly low. In the Sub-Saharan African region, amongst the 34% of adults with an account, almost a third of account holders – or 12% of all adults is reported to have a mobile money account only. The mobile money account is increasingly being used in the Sub-
Saharan Africa to extend financial services past the limits of bank branches.

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Enhancing Financial Inclusion Through Islamic Finance  (1.51MB)