The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries

Mohieldin, Mahmoud; Iqbal, Zamir; Rostom, Ahmed; Fu, Xiaochen

dc.creator	Mohieldin, Mahmoud
dc.creator	Iqbal, Zamir
dc.creator	Rostom, Ahmed
dc.creator	Fu, Xiaochen
dc.date	2012-03-19T18:06:56Z
dc.date	2012-03-19T18:06:56Z
dc.date	2011-12-01
dc.date.accessioned	2023-02-17T21:01:46Z
dc.date.available	2023-02-17T21:01:46Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111223222517
dc.identifier	http://hdl.handle.net/10986/3692
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244656
dc.description	The core principles of Islam lay great emphasis on social justice, inclusion, and sharing of resources between the haves and the have nots. Islamic finance addresses the issue of "financial inclusion" or "access to finance" from two directions -- one through promoting risk-sharing contracts that provide a viable alternative to conventional debt-based financing, and the other through specific instruments of redistribution of the wealth among the society. Use of risk-sharing financing instruments can offer Shariah-compliant microfinance, financing for small and medium enterprises, and micro-insurance to enhance access to finance. And redistributive instruments such as Zakah, Sadaqat, Waqf, and Qard-al-hassan complement risk-sharing instruments to target the poor sector of society to offer a comprehensive approach to eradicating poverty and to build a healthy and vibrant economy. Instruments offered by Islam have strong historical roots and have been applied throughout history in various Muslim communities. The paper identifies gaps currently existing in Organisation of Islamic Cooperation (OIC) countries on each front, that is, Shariah-compliant micro-finance and financing for small and medium enterprises and the state of traditional redistributive instruments. The paper concludes that Islam offers a rich set of instruments and unconventional approaches, which, if implemented in true spirit, can lead to reduced poverty and inequality in Muslim countries plagued by massive poverty. Therefore, policy makers in Muslim countries who are serious about enhancing access to finance or "financial inclusion" should exploit the potential of Islamic instruments to achieve this goal and focus on improving the regulatory and financial infrastructure to promote an enabling environment.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5920
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ACCEPTABLE COLLATERAL
dc.subject	ACCESS TO CREDIT
dc.subject	ACCESS TO FINANCE
dc.subject	ACCESS TO FINANCIAL SERVICES
dc.subject	ACCESS TO FINANCING
dc.subject	ACCESS TO INSURANCE
dc.subject	ACCESS TO RESOURCES
dc.subject	ACCESSIBILITY
dc.subject	ADMINISTRATIVE COSTS
dc.subject	AFFORDABLE COST
dc.subject	AGRICULTURAL SECTOR
dc.subject	ANTI-MONEY LAUNDERING
dc.subject	AVAILABILITY OF CREDIT
dc.subject	BANK BRANCHES
dc.subject	BANK POLICY
dc.subject	BANKRUPTCY
dc.subject	BANKS
dc.subject	BIASES
dc.subject	BORROWER
dc.subject	BORROWING
dc.subject	BUSINESS CAPITAL
dc.subject	CAPITAL ACCUMULATION
dc.subject	CAPITAL MARKETS
dc.subject	CAPITAL REQUIREMENT
dc.subject	CENTRAL BANKS
dc.subject	COLLATERAL
dc.subject	COLLATERAL REQUIREMENTS
dc.subject	COMMERCIAL BANK
dc.subject	COMMERCIAL BANK BRANCHES
dc.subject	CONSUMER PROTECTION
dc.subject	CONSUMER PROTECTIONS
dc.subject	CONTRACTUAL OBLIGATION
dc.subject	CONVENTIONAL FINANCE
dc.subject	COOPERATIVES
dc.subject	COORDINATION FAILURE
dc.subject	CREDIT ASSESSMENT
dc.subject	CREDIT BUREAU
dc.subject	CREDIT HISTORIES
dc.subject	CREDIT INFORMATION
dc.subject	CREDIT INFORMATION SYSTEM
dc.subject	CREDIT INFORMATION SYSTEMS
dc.subject	CREDIT PROGRAM
dc.subject	CREDIT PROVISION
dc.subject	CREDIT REGISTRY
dc.subject	CREDIT SUBSIDIES
dc.subject	CREDITOR
dc.subject	DEBT
dc.subject	DEBT FINANCING
dc.subject	DEBTOR
dc.subject	DEBTORS
dc.subject	DECEPTIVE PRACTICES
dc.subject	DEPOSIT
dc.subject	DEPOSITORS
dc.subject	DEPOSITS
dc.subject	DERIVATIVE
dc.subject	DEVELOPING COUNTRIES
dc.subject	DIRECT INVESTMENT
dc.subject	DISCRIMINATION
dc.subject	DIVERSIFICATION
dc.subject	ECONOMIC ACTIVITIES
dc.subject	ECONOMIC ACTIVITY
dc.subject	ECONOMIC BARRIERS
dc.subject	ECONOMIC DEVELOPMENT
dc.subject	ECONOMIC GROWTH
dc.subject	ECONOMIC RESOURCES
dc.subject	ECONOMIC SYSTEM
dc.subject	ECONOMIC TRANSACTIONS
dc.subject	EMERGING MARKETS
dc.subject	EMPOWERMENT
dc.subject	ENABLING ENVIRONMENT
dc.subject	ENDOWMENTS
dc.subject	ENTREPRENEUR
dc.subject	ENTREPRENEURS
dc.subject	EQUAL OPPORTUNITIES
dc.subject	EXPENDITURES
dc.subject	EXTREME POVERTY
dc.subject	FAMILIES
dc.subject	FARMERS
dc.subject	FEMALE BORROWERS
dc.subject	FINANCIAL ACCESS
dc.subject	FINANCIAL AGENCIES
dc.subject	FINANCIAL CAPACITY
dc.subject	FINANCIAL DEVELOPMENT
dc.subject	FINANCIAL EXCLUSION
dc.subject	FINANCIAL INFRASTRUCTURE
dc.subject	FINANCIAL INSTITUTIONS
dc.subject	FINANCIAL INSTRUMENTS
dc.subject	FINANCIAL INTERMEDIATION
dc.subject	FINANCIAL LITERACY
dc.subject	FINANCIAL MARKET
dc.subject	FINANCIAL NEEDS
dc.subject	FINANCIAL PRODUCT
dc.subject	FINANCIAL PRODUCTS
dc.subject	FINANCIAL REGULATORS
dc.subject	FINANCIAL RESOURCES
dc.subject	FINANCIAL SECTOR POLICY
dc.subject	FINANCIAL SERVICE
dc.subject	FINANCIAL SERVICE PROVIDERS
dc.subject	FINANCIAL SERVICES
dc.subject	FINANCIAL SYSTEM
dc.subject	FINANCIAL SYSTEMS
dc.subject	FINANCIAL TOOLS
dc.subject	FINANCING NEEDS
dc.subject	FIXED ASSETS
dc.subject	FREE LOAN
dc.subject	FREE LOANS
dc.subject	GROUP LENDING
dc.subject	GROWTH OPPORTUNITIES
dc.subject	HOLDING
dc.subject	HOME OWNERSHIP
dc.subject	HOUSEHOLDS
dc.subject	IMPLICIT INTEREST
dc.subject	INCOME GROUP
dc.subject	INCOME GROUPS
dc.subject	INCOME INEQUALITY
dc.subject	INEQUALITIES
dc.subject	INEQUALITY
dc.subject	INFORMATION ASYMMETRIES
dc.subject	INFORMATION TECHNOLOGY
dc.subject	INSTITUTIONAL INVESTORS
dc.subject	INSTRUMENT
dc.subject	INSURANCE COMPANY
dc.subject	INSURANCE PENETRATION
dc.subject	INSURANCE SERVICES
dc.subject	INTEREST INCOME
dc.subject	INTERNATIONAL BANK
dc.subject	INVESTMENT BANK
dc.subject	INVESTMENT OPPORTUNITIES
dc.subject	ISLAMIC BANK
dc.subject	ISLAMIC BANKS
dc.subject	ISLAMIC ECONOMICS
dc.subject	ISLAMIC ECONOMY
dc.subject	ISLAMIC FINANCE
dc.subject	ISLAMIC FINANCIAL INSTRUMENTS
dc.subject	ISLAMIC INSTRUMENT
dc.subject	ISLAMIC INSTRUMENTS
dc.subject	ISLAMIC LAW
dc.subject	KEY CHALLENGES
dc.subject	LACK OF ACCESS
dc.subject	LACK OF COLLATERAL
dc.subject	LENDER
dc.subject	LENDERS
dc.subject	LEVEL PLAYING FIELD
dc.subject	LEVIES
dc.subject	LIABILITY
dc.subject	LIQUIDITY
dc.subject	LIVING STANDARD
dc.subject	LOAN BALANCE
dc.subject	LOAN COOPERATIVES
dc.subject	MARKET FAILURES
dc.subject	MFI
dc.subject	MFIS
dc.subject	MICRO CREDIT
dc.subject	MICRO ENTERPRISE
dc.subject	MICRO ENTERPRISES
dc.subject	MICRO FINANCE
dc.subject	MICRO FINANCE INSTITUTION
dc.subject	MICRO FINANCE INSTITUTIONS
dc.subject	MICRO-FINANCE
dc.subject	MICRO-INSURANCE
dc.subject	MICROCREDIT
dc.subject	MICROFINANCE
dc.subject	MICROFINANCE INSTITUTIONS
dc.subject	MICROFINANCE LOANS
dc.subject	MICROINSURANCE
dc.subject	MORAL HAZARD
dc.subject	MORTGAGE
dc.subject	NET WORTH
dc.subject	NEW BUSINESS
dc.subject	NEW MARKET
dc.subject	NONPAYMENT
dc.subject	OUTREACH
dc.subject	OUTSTANDING LOAN
dc.subject	PHYSICAL CAPITAL
dc.subject	POOR BORROWERS
dc.subject	PREJUDICE
dc.subject	PRIVATE CREDIT
dc.subject	PROPERTY RIGHTS
dc.subject	PRUDENTIAL REGULATION
dc.subject	PUBLIC CREDIT
dc.subject	REAL ESTATE
dc.subject	RECESSION
dc.subject	REMITTANCE
dc.subject	REMITTANCES
dc.subject	REPAYMENT
dc.subject	REPAYMENT PERIOD
dc.subject	REPAYMENT RATE
dc.subject	RETURN
dc.subject	RETURNS
dc.subject	REVOLVING FUND
dc.subject	RIBA
dc.subject	RIGHT OF POSSESSION
dc.subject	RISK DIVERSIFICATION
dc.subject	RISK MANAGEMENT
dc.subject	RISK MITIGATION
dc.subject	RISK SHARING
dc.subject	RURAL BANKS
dc.subject	RURAL FINANCE
dc.subject	RURAL FINANCIAL ACCESS
dc.subject	SAVINGS
dc.subject	SAVINGS RATE
dc.subject	SMALL BUSINESS
dc.subject	SMALL BUSINESS LOAN
dc.subject	SMALL BUSINESSES
dc.subject	SMALL ENTERPRISES
dc.subject	SMALL FARMERS
dc.subject	SOCIAL DEVELOPMENT
dc.subject	SOCIAL INEQUALITY
dc.subject	SOCIAL JUSTICE
dc.subject	SOCIAL WELFARE
dc.subject	SOURCE OF INCOME
dc.subject	START-UPS
dc.subject	TAX CREDITS
dc.subject	TRADING
dc.subject	TRANSACTION
dc.subject	TRANSACTION COSTS
dc.subject	TRANSACTIONS COSTS
dc.subject	TREASURY
dc.subject	TRUSTEE
dc.subject	UNEMPLOYMENT
dc.subject	VILLAGE
dc.subject	VILLAGE FUNDS
dc.subject	VILLAGES
dc.subject	WEALTH TAX
dc.subject	WOMAN
dc.subject	WOMEN BORROWERS
dc.title	The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	The World Region
dc.coverage	The World Region