The role of Islamic finance in enhancing financial inclusion in Organization of Islamic Cooperation (OIC) countries
Joint Authors
Iqbal, Zamir
Muhyi al-Din, Mahmud
Rustum, Ahmad
Fu, Xiaochen
Source
Issue
Vol. 20, Issue 2 (31 Dec. 2012), pp.55-120, 66 p.
Publisher
Islamic Development Bank (IDB) Islamic Research and Training Institute (IRTI)
Publication Date
2012-12-31
Country of Publication
Saudi Arabia
No. of Pages
66
Main Subjects
Economy and Commerce
Religion
Islamic Studies
Topics
- Banks
- Islamic jurisprudence
- Economic development
- Islam
- Poverty mitigation
- Financing
- Finance
- Financial policy
- Risk management
- Alms tax
- Religious aspects
- Banking
- Profit-sharing
- Integration
- Financial inclusion
- Organisation of Islamic Cooperation
Abstract EN
The core principles of Islam lay great emphasis on social justice, inclusion, and sharing of resources between the haves and the have nots.
Islamic finance addresses the issue of “financial inclusion” or "access to finance" from two directions-one through promoting risk-sharing contracts that provide a viable alternative to conventional debt-based financing, and the other through specific instruments of redistribution of the wealth among the society.
Use of risk-sharing financing instruments can offer Shar ahcompliant microfinance, financing for small and medium enterprises, and micro-insurance to enhance access to finance.
And redistributive instruments such as Zak h, adaqat, Waqf, and Qar -al- asan 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.
Instruments offered by Islam have strong historical roots and have been applied throughout history in various Muslim communities.
The paper identifies gaps currently existing in Organization of Islamic Cooperation (OIC) countries on each front, that is, Shar ah-compliant micro-finance and financing for small and medium enterprises and the state of traditional redistributive instruments.
The paper concludes that Islam offers a rich set of instruments and unconventional approaches, which, if implemented in true spirit, can lead to reduced poverty and inequality in Muslim countries plagued by massive poverty.
Therefore, policy makers in Muslim countries who are serious about enhancing access to finance or "financial inclusion" should exploit the potential of Islamic instruments to achieve this goal and focus on improving the regulatory and financial infrastructure to promote an enabling environment.
American Psychological Association (APA)
Muhyi al-Din, Mahmud& Iqbal, Zamir& Rustum, Ahmad& Fu, Xiaochen. 2012. The role of Islamic finance in enhancing financial inclusion in Organization of Islamic Cooperation (OIC) countries. Islamic Economic Studies،Vol. 20, no. 2, pp.55-120.
https://search.emarefa.net/detail/BIM-328454
Modern Language Association (MLA)
Muhyi al-Din, Mahmud…[et al.]. The role of Islamic finance in enhancing financial inclusion in Organization of Islamic Cooperation (OIC) countries. Islamic Economic Studies Vol. 20, no. 2 (Dec. 2012), pp.55-120.
https://search.emarefa.net/detail/BIM-328454
American Medical Association (AMA)
Muhyi al-Din, Mahmud& Iqbal, Zamir& Rustum, Ahmad& Fu, Xiaochen. The role of Islamic finance in enhancing financial inclusion in Organization of Islamic Cooperation (OIC) countries. Islamic Economic Studies. 2012. Vol. 20, no. 2, pp.55-120.
https://search.emarefa.net/detail/BIM-328454
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references : p. 116-120
Record ID
BIM-328454