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Can Islamic banking increase financial inclusion?
Open accessAbstract
Financial inclusion has become an increasingly important concern for a vast number of countries worldwide. At the same time, a fast-growing amount of literature has emerged to examine its measurement, determinants and impacts. Governments have made the promotion of it a priority. For example, the World Bank’s 2014 Global Financial Development Report (GFDR), devoted to financial inclusion, reports that more than two-thirds of regulatory and supervisory agencies have been tasked with encouraging financial inclusion, and more than 50 countries have set formal targets. Last year, the World Bank President announced a global target of universal financial access by 2020. Defined as the share of the population who use financial services, financial inclusion has proven to be linked to desirable economic outcomes above and beyond those associated with the more familiar concept of financial depth. In this chapter, we analyse the existing country-level information on both financial inclusion and the penetration or presence of Islamic banking in order to ascertain the extent to which Islamic banking has contributed to financial inclusion. This chapter tests for a possible financial inclusion of Islamic banking relationships across a wide variety of measures. Our findings suggest a weak and tentative evidence of Islamic banking’s positive impact on some types of inclusion. This weakness in the results may be partially related to data issues, including the limited coverage of Islamic banking indicators and of financial inclusion indicators among the Organization for Islamic Cooperation (OIC) countries.
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“Financial inclusion raises household income and thereby improves the economic well-being of households and enhances the business activities of small enterprises (Naceur et al. 2017).”
From Financial Inclusion and Economic Growth in Sub-Saharan Africa—A Panel ARDL and Granger Non-Causality Approach (2023) · cites this paper as Naceur et al. 2017
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Metadata
- Authors
- Ben Naceur, S., Barajas, A., & Massara, A.
- Venue
- Handbook of Empirical Research on Islam and Economic Life
- Publisher
- Edward Elgar Publishing
- Published
- 2017-01-27
- OpenAlex
- W3125683373
- Cited by
- 34
- References
- 17
- Citations by year
- 2024: 3 · 2023: 5 · 2022: 5 · 2021: 3 · 2020: 5 · 2019: 2 · 2018: 5 · 2017: 2
- FWCI
- 43.23
- Type
- book chapter
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- Edward Elgar Publishing eBooks (publishedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Accounting › Islamic Finance and Banking Studies
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Microfinance and Financial Inclusion
- Social Sciences › Business, Management and Accounting › Management Information Systems › FinTech, Crowdfunding, Digital Finance
- Keywords
- Islamic banking, financial inclusion, financial inclusion indicators, access to finance, financial depth, cross-country analysis
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