Abstract
According to Global Financial Development Report 2014, the proportion of adult population holding bank accounts in 25 out of 48 Organization of Islamic Cooperation (OIC) member countries surveyed stands below 20 %. Part of the reason is Muslims’ voluntary exclusion of interest-based financial services. On average, 28 % adults in the OIC countries hold a bank account at a formal financial institution. On the other hand, only 7.7 % of the poorest 40 % people in the OIC countries borrow from financial institutions. Furthermore, in the OIC countries, like Guinea-Bissau, Gabon, Chad, Sudan, Syria, Mozambique, Gambia, and Iraq, microfinance outreach are not even catering to the 1 % of the poor people in these countries. In 26 out of 36 OIC countries where sufficient data are available, we find that not even 10 % of the poor people are under the microfinance radar. Thus, this presents a challenge as well as an opportunity for Islamic banks to increase their outreach toward fostering inclusive finance in the OIC countries.
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Shaikh, S.A., Ismail, M.A., Mohd. Shafiai, M.H., Ismail, A.G., Shahimi, S. (2017). Role of Islamic Banking in Financial Inclusion: Prospects and Performance. In: Alam, N., Rizvi, S. (eds) Islamic Banking . Palgrave CIBFR Studies in Islamic Finance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-45910-3_3
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DOI: https://doi.org/10.1007/978-3-319-45910-3_3
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