Role of Islamic finance on enhancing financial inclusion: recommended lessons for Algeria from the Malaysian experiment

Abstract EN

This research aims to extract beneficial lessons from the Malaysian experiment surrounding the contribution of Islamic finance in enhancing financial inclusion and to address these lessons for Algeria to activate the role of Islamic finance in enhancing financial inclusion.

This research uses data and statistics from official thoughtful financial institutions such as the World Bank and the Islamic Financial Services Board.

This research shows that Algeria has a shortage of financial inclusion although it has good potentials and no obstructive barriers for enhancing financial inclusion among the population.

As well, the findings indicate that Islamic finance role in enhancing financial inclusion is not activated yet due to the low share of Islamic banking in the total Algerian banking sector.

This research recommends from policymakers, financial researchers and decision-makers in Algeria to support and stimulate the Islamic finance industry and to benefit from the potentials of financial inclusion in the Algerian financial system like the abundance of money among adults to open financial accounts, short distance to financial institutions, low cost of financial services.