Islamic finance : financial inclusion or migration?

Abstract EN

Purpose – This paper aims to define a methodology to assess the impact of introducing Islamic finance on financial inclusion.

Design/methodology/approach – The paper is based on a literature review to understand the link between Islamic finance and financial inclusion.

The second part of the paper presents a conceptual framework to assess the impact of introducing Islamic finance on financial inclusion in a defined context based on the profiling of people interested in Islamic finance.

Findings – The paper brings an insight on the impact of introducing Islamic finance.

Indeed, it could cause a financial migration to Islamic banks that can take many forms and depends on many factors that call for deep analysis.

Research limitations/implications – The paper would help financial authorities and financial institutions to measure the impact of introducing Islamic finance on their businesses and the stability of the whole system.

Practical implications – Islamic finance can not only enhance financial inclusion but also create financial migration.

The two implications can vary from one context to another.

Social implications – Islamic finance can contribute in the effort of including “self-excluded” people with religious concerns as well as people without access to financial services.

Originality/value – This paper promotes the idea that Islamic finance is not exclusively a way to enhance financial inclusion.