Role of Islamic Banks to Increase Financial Inclusion in Southeast Asia, the Middle East, and North Africa
DOI:
https://doi.org/10.22555/ijelcs.v9i1.1125Keywords:
Financial inclusions , Islamic banks , Financial services, Financial markets, Traditional bankingAbstract
This article investigates the contribution of Islamic banks to enhancing access to financial services by looking at their unique method of offering Sharia-compliant goods and services. Islamic banking principles, the study claims, encourage profit-and-loss sharing and forbid riba (interest), which increases access to financial services, particularly for devout Muslims. In particular, this paper looks at how Islamic banks affect financial inclusion in Southeast Asia, the Middle East, and North Africa. This is accomplished by assessing academic literature, industry reports, and statistical data. It looks at potential substitutes, including mobile banking and microfinance, to reach those who need access to traditional banking services and delves into the difficulties Islamic banks have, such as a lack of knowledge about money and location. Data indicate that Islamic banks support economic development and stability by establishing trust via Sharia governance structures. In its last part, the report offers some suggestions on how governments may utilize Islamic banking to increase public access to financial services and promote social change.
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