The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries
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...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | 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 http://hdl.handle.net/10986/3692 |
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okr-10986-3692 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCEPTABLE COLLATERAL ACCESS TO CREDIT ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES ACCESS TO FINANCING ACCESS TO INSURANCE ACCESS TO RESOURCES ACCESSIBILITY ADMINISTRATIVE COSTS AFFORDABLE COST AGRICULTURAL SECTOR ANTI-MONEY LAUNDERING AVAILABILITY OF CREDIT BANK BRANCHES BANK POLICY BANKRUPTCY BANKS BIASES BORROWER BORROWING BUSINESS CAPITAL CAPITAL ACCUMULATION CAPITAL MARKETS CAPITAL REQUIREMENT CENTRAL BANKS COLLATERAL COLLATERAL REQUIREMENTS COMMERCIAL BANK COMMERCIAL BANK BRANCHES CONSUMER PROTECTION CONSUMER PROTECTIONS CONTRACTUAL OBLIGATION CONVENTIONAL FINANCE COOPERATIVES COORDINATION FAILURE CREDIT ASSESSMENT CREDIT BUREAU CREDIT HISTORIES CREDIT INFORMATION CREDIT INFORMATION SYSTEM CREDIT INFORMATION SYSTEMS CREDIT PROGRAM CREDIT PROVISION CREDIT REGISTRY CREDIT SUBSIDIES CREDITOR DEBT DEBT FINANCING DEBTOR DEBTORS DECEPTIVE PRACTICES DEPOSIT DEPOSITORS DEPOSITS DERIVATIVE DEVELOPING COUNTRIES DIRECT INVESTMENT DISCRIMINATION DIVERSIFICATION ECONOMIC ACTIVITIES ECONOMIC ACTIVITY ECONOMIC BARRIERS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC RESOURCES ECONOMIC SYSTEM ECONOMIC TRANSACTIONS EMERGING MARKETS EMPOWERMENT ENABLING ENVIRONMENT ENDOWMENTS ENTREPRENEUR ENTREPRENEURS EQUAL OPPORTUNITIES EXPENDITURES EXTREME POVERTY FAMILIES FARMERS FEMALE BORROWERS FINANCIAL ACCESS FINANCIAL AGENCIES FINANCIAL CAPACITY FINANCIAL DEVELOPMENT FINANCIAL EXCLUSION FINANCIAL INFRASTRUCTURE FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIATION FINANCIAL LITERACY FINANCIAL MARKET FINANCIAL NEEDS FINANCIAL PRODUCT FINANCIAL PRODUCTS FINANCIAL REGULATORS FINANCIAL RESOURCES FINANCIAL SECTOR POLICY FINANCIAL SERVICE FINANCIAL SERVICE PROVIDERS FINANCIAL SERVICES FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL TOOLS FINANCING NEEDS FIXED ASSETS FREE LOAN FREE LOANS GROUP LENDING GROWTH OPPORTUNITIES HOLDING HOME OWNERSHIP HOUSEHOLDS IMPLICIT INTEREST INCOME GROUP INCOME GROUPS INCOME INEQUALITY INEQUALITIES INEQUALITY INFORMATION ASYMMETRIES INFORMATION TECHNOLOGY INSTITUTIONAL INVESTORS INSTRUMENT INSURANCE COMPANY INSURANCE PENETRATION INSURANCE SERVICES INTEREST INCOME INTERNATIONAL BANK INVESTMENT BANK INVESTMENT OPPORTUNITIES ISLAMIC BANK ISLAMIC BANKS ISLAMIC ECONOMICS ISLAMIC ECONOMY ISLAMIC FINANCE ISLAMIC FINANCIAL INSTRUMENTS ISLAMIC INSTRUMENT ISLAMIC INSTRUMENTS ISLAMIC LAW KEY CHALLENGES LACK OF ACCESS LACK OF COLLATERAL LENDER LENDERS LEVEL PLAYING FIELD LEVIES LIABILITY LIQUIDITY LIVING STANDARD LOAN BALANCE LOAN COOPERATIVES MARKET FAILURES MFI MFIS MICRO CREDIT MICRO ENTERPRISE MICRO ENTERPRISES MICRO FINANCE MICRO FINANCE INSTITUTION MICRO FINANCE INSTITUTIONS MICRO-FINANCE MICRO-INSURANCE MICROCREDIT MICROFINANCE MICROFINANCE INSTITUTIONS MICROFINANCE LOANS MICROINSURANCE MORAL HAZARD MORTGAGE NET WORTH NEW BUSINESS NEW MARKET NONPAYMENT OUTREACH OUTSTANDING LOAN PHYSICAL CAPITAL POOR BORROWERS PREJUDICE PRIVATE CREDIT PROPERTY RIGHTS PRUDENTIAL REGULATION PUBLIC CREDIT REAL ESTATE RECESSION REMITTANCE REMITTANCES REPAYMENT REPAYMENT PERIOD REPAYMENT RATE RETURN RETURNS REVOLVING FUND RIBA RIGHT OF POSSESSION RISK DIVERSIFICATION RISK MANAGEMENT RISK MITIGATION RISK SHARING RURAL BANKS RURAL FINANCE RURAL FINANCIAL ACCESS SAVINGS SAVINGS RATE SMALL BUSINESS SMALL BUSINESS LOAN SMALL BUSINESSES SMALL ENTERPRISES SMALL FARMERS SOCIAL DEVELOPMENT SOCIAL INEQUALITY SOCIAL JUSTICE SOCIAL WELFARE SOURCE OF INCOME START-UPS TAX CREDITS TRADING TRANSACTION TRANSACTION COSTS TRANSACTIONS COSTS TREASURY TRUSTEE UNEMPLOYMENT VILLAGE VILLAGE FUNDS VILLAGES WEALTH TAX WOMAN WOMEN BORROWERS |
| spellingShingle |
ACCEPTABLE COLLATERAL ACCESS TO CREDIT ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES ACCESS TO FINANCING ACCESS TO INSURANCE ACCESS TO RESOURCES ACCESSIBILITY ADMINISTRATIVE COSTS AFFORDABLE COST AGRICULTURAL SECTOR ANTI-MONEY LAUNDERING AVAILABILITY OF CREDIT BANK BRANCHES BANK POLICY BANKRUPTCY BANKS BIASES BORROWER BORROWING BUSINESS CAPITAL CAPITAL ACCUMULATION CAPITAL MARKETS CAPITAL REQUIREMENT CENTRAL BANKS COLLATERAL COLLATERAL REQUIREMENTS COMMERCIAL BANK COMMERCIAL BANK BRANCHES CONSUMER PROTECTION CONSUMER PROTECTIONS CONTRACTUAL OBLIGATION CONVENTIONAL FINANCE COOPERATIVES COORDINATION FAILURE CREDIT ASSESSMENT CREDIT BUREAU CREDIT HISTORIES CREDIT INFORMATION CREDIT INFORMATION SYSTEM CREDIT INFORMATION SYSTEMS CREDIT PROGRAM CREDIT PROVISION CREDIT REGISTRY CREDIT SUBSIDIES CREDITOR DEBT DEBT FINANCING DEBTOR DEBTORS DECEPTIVE PRACTICES DEPOSIT DEPOSITORS DEPOSITS DERIVATIVE DEVELOPING COUNTRIES DIRECT INVESTMENT DISCRIMINATION DIVERSIFICATION ECONOMIC ACTIVITIES ECONOMIC ACTIVITY ECONOMIC BARRIERS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC RESOURCES ECONOMIC SYSTEM ECONOMIC TRANSACTIONS EMERGING MARKETS EMPOWERMENT ENABLING ENVIRONMENT ENDOWMENTS ENTREPRENEUR ENTREPRENEURS EQUAL OPPORTUNITIES EXPENDITURES EXTREME POVERTY FAMILIES FARMERS FEMALE BORROWERS FINANCIAL ACCESS FINANCIAL AGENCIES FINANCIAL CAPACITY FINANCIAL DEVELOPMENT FINANCIAL EXCLUSION FINANCIAL INFRASTRUCTURE FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIATION FINANCIAL LITERACY FINANCIAL MARKET FINANCIAL NEEDS FINANCIAL PRODUCT FINANCIAL PRODUCTS FINANCIAL REGULATORS FINANCIAL RESOURCES FINANCIAL SECTOR POLICY FINANCIAL SERVICE FINANCIAL SERVICE PROVIDERS FINANCIAL SERVICES FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL TOOLS FINANCING NEEDS FIXED ASSETS FREE LOAN FREE LOANS GROUP LENDING GROWTH OPPORTUNITIES HOLDING HOME OWNERSHIP HOUSEHOLDS IMPLICIT INTEREST INCOME GROUP INCOME GROUPS INCOME INEQUALITY INEQUALITIES INEQUALITY INFORMATION ASYMMETRIES INFORMATION TECHNOLOGY INSTITUTIONAL INVESTORS INSTRUMENT INSURANCE COMPANY INSURANCE PENETRATION INSURANCE SERVICES INTEREST INCOME INTERNATIONAL BANK INVESTMENT BANK INVESTMENT OPPORTUNITIES ISLAMIC BANK ISLAMIC BANKS ISLAMIC ECONOMICS ISLAMIC ECONOMY ISLAMIC FINANCE ISLAMIC FINANCIAL INSTRUMENTS ISLAMIC INSTRUMENT ISLAMIC INSTRUMENTS ISLAMIC LAW KEY CHALLENGES LACK OF ACCESS LACK OF COLLATERAL LENDER LENDERS LEVEL PLAYING FIELD LEVIES LIABILITY LIQUIDITY LIVING STANDARD LOAN BALANCE LOAN COOPERATIVES MARKET FAILURES MFI MFIS MICRO CREDIT MICRO ENTERPRISE MICRO ENTERPRISES MICRO FINANCE MICRO FINANCE INSTITUTION MICRO FINANCE INSTITUTIONS MICRO-FINANCE MICRO-INSURANCE MICROCREDIT MICROFINANCE MICROFINANCE INSTITUTIONS MICROFINANCE LOANS MICROINSURANCE MORAL HAZARD MORTGAGE NET WORTH NEW BUSINESS NEW MARKET NONPAYMENT OUTREACH OUTSTANDING LOAN PHYSICAL CAPITAL POOR BORROWERS PREJUDICE PRIVATE CREDIT PROPERTY RIGHTS PRUDENTIAL REGULATION PUBLIC CREDIT REAL ESTATE RECESSION REMITTANCE REMITTANCES REPAYMENT REPAYMENT PERIOD REPAYMENT RATE RETURN RETURNS REVOLVING FUND RIBA RIGHT OF POSSESSION RISK DIVERSIFICATION RISK MANAGEMENT RISK MITIGATION RISK SHARING RURAL BANKS RURAL FINANCE RURAL FINANCIAL ACCESS SAVINGS SAVINGS RATE SMALL BUSINESS SMALL BUSINESS LOAN SMALL BUSINESSES SMALL ENTERPRISES SMALL FARMERS SOCIAL DEVELOPMENT SOCIAL INEQUALITY SOCIAL JUSTICE SOCIAL WELFARE SOURCE OF INCOME START-UPS TAX CREDITS TRADING TRANSACTION TRANSACTION COSTS TRANSACTIONS COSTS TREASURY TRUSTEE UNEMPLOYMENT VILLAGE VILLAGE FUNDS VILLAGES WEALTH TAX WOMAN WOMEN BORROWERS Mohieldin, Mahmoud Iqbal, Zamir Rostom, Ahmed Fu, Xiaochen The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5920 |
| 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. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Mohieldin, Mahmoud Iqbal, Zamir Rostom, Ahmed Fu, Xiaochen |
| author_facet |
Mohieldin, Mahmoud Iqbal, Zamir Rostom, Ahmed Fu, Xiaochen |
| author_sort |
Mohieldin, Mahmoud |
| title |
The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries |
| title_short |
The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries |
| title_full |
The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries |
| title_fullStr |
The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries |
| title_full_unstemmed |
The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries |
| title_sort |
role of islamic finance in enhancing financial inclusion in organization of islamic cooperation (oic) countries |
| publishDate |
2012 |
| url |
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 http://hdl.handle.net/10986/3692 |
| _version_ |
1764387840478674944 |
| spelling |
okr-10986-36922021-04-23T14:02:12Z The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries Mohieldin, Mahmoud Iqbal, Zamir Rostom, Ahmed Fu, Xiaochen ACCEPTABLE COLLATERAL ACCESS TO CREDIT ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES ACCESS TO FINANCING ACCESS TO INSURANCE ACCESS TO RESOURCES ACCESSIBILITY ADMINISTRATIVE COSTS AFFORDABLE COST AGRICULTURAL SECTOR ANTI-MONEY LAUNDERING AVAILABILITY OF CREDIT BANK BRANCHES BANK POLICY BANKRUPTCY BANKS BIASES BORROWER BORROWING BUSINESS CAPITAL CAPITAL ACCUMULATION CAPITAL MARKETS CAPITAL REQUIREMENT CENTRAL BANKS COLLATERAL COLLATERAL REQUIREMENTS COMMERCIAL BANK COMMERCIAL BANK BRANCHES CONSUMER PROTECTION CONSUMER PROTECTIONS CONTRACTUAL OBLIGATION CONVENTIONAL FINANCE COOPERATIVES COORDINATION FAILURE CREDIT ASSESSMENT CREDIT BUREAU CREDIT HISTORIES CREDIT INFORMATION CREDIT INFORMATION SYSTEM CREDIT INFORMATION SYSTEMS CREDIT PROGRAM CREDIT PROVISION CREDIT REGISTRY CREDIT SUBSIDIES CREDITOR DEBT DEBT FINANCING DEBTOR DEBTORS DECEPTIVE PRACTICES DEPOSIT DEPOSITORS DEPOSITS DERIVATIVE DEVELOPING COUNTRIES DIRECT INVESTMENT DISCRIMINATION DIVERSIFICATION ECONOMIC ACTIVITIES ECONOMIC ACTIVITY ECONOMIC BARRIERS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC RESOURCES ECONOMIC SYSTEM ECONOMIC TRANSACTIONS EMERGING MARKETS EMPOWERMENT ENABLING ENVIRONMENT ENDOWMENTS ENTREPRENEUR ENTREPRENEURS EQUAL OPPORTUNITIES EXPENDITURES EXTREME POVERTY FAMILIES FARMERS FEMALE BORROWERS FINANCIAL ACCESS FINANCIAL AGENCIES FINANCIAL CAPACITY FINANCIAL DEVELOPMENT FINANCIAL EXCLUSION FINANCIAL INFRASTRUCTURE FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIATION FINANCIAL LITERACY FINANCIAL MARKET FINANCIAL NEEDS FINANCIAL PRODUCT FINANCIAL PRODUCTS FINANCIAL REGULATORS FINANCIAL RESOURCES FINANCIAL SECTOR POLICY FINANCIAL SERVICE FINANCIAL SERVICE PROVIDERS FINANCIAL SERVICES FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL TOOLS FINANCING NEEDS FIXED ASSETS FREE LOAN FREE LOANS GROUP LENDING GROWTH OPPORTUNITIES HOLDING HOME OWNERSHIP HOUSEHOLDS IMPLICIT INTEREST INCOME GROUP INCOME GROUPS INCOME INEQUALITY INEQUALITIES INEQUALITY INFORMATION ASYMMETRIES INFORMATION TECHNOLOGY INSTITUTIONAL INVESTORS INSTRUMENT INSURANCE COMPANY INSURANCE PENETRATION INSURANCE SERVICES INTEREST INCOME INTERNATIONAL BANK INVESTMENT BANK INVESTMENT OPPORTUNITIES ISLAMIC BANK ISLAMIC BANKS ISLAMIC ECONOMICS ISLAMIC ECONOMY ISLAMIC FINANCE ISLAMIC FINANCIAL INSTRUMENTS ISLAMIC INSTRUMENT ISLAMIC INSTRUMENTS ISLAMIC LAW KEY CHALLENGES LACK OF ACCESS LACK OF COLLATERAL LENDER LENDERS LEVEL PLAYING FIELD LEVIES LIABILITY LIQUIDITY LIVING STANDARD LOAN BALANCE LOAN COOPERATIVES MARKET FAILURES MFI MFIS MICRO CREDIT MICRO ENTERPRISE MICRO ENTERPRISES MICRO FINANCE MICRO FINANCE INSTITUTION MICRO FINANCE INSTITUTIONS MICRO-FINANCE MICRO-INSURANCE MICROCREDIT MICROFINANCE MICROFINANCE INSTITUTIONS MICROFINANCE LOANS MICROINSURANCE MORAL HAZARD MORTGAGE NET WORTH NEW BUSINESS NEW MARKET NONPAYMENT OUTREACH OUTSTANDING LOAN PHYSICAL CAPITAL POOR BORROWERS PREJUDICE PRIVATE CREDIT PROPERTY RIGHTS PRUDENTIAL REGULATION PUBLIC CREDIT REAL ESTATE RECESSION REMITTANCE REMITTANCES REPAYMENT REPAYMENT PERIOD REPAYMENT RATE RETURN RETURNS REVOLVING FUND RIBA RIGHT OF POSSESSION RISK DIVERSIFICATION RISK MANAGEMENT RISK MITIGATION RISK SHARING RURAL BANKS RURAL FINANCE RURAL FINANCIAL ACCESS SAVINGS SAVINGS RATE SMALL BUSINESS SMALL BUSINESS LOAN SMALL BUSINESSES SMALL ENTERPRISES SMALL FARMERS SOCIAL DEVELOPMENT SOCIAL INEQUALITY SOCIAL JUSTICE SOCIAL WELFARE SOURCE OF INCOME START-UPS TAX CREDITS TRADING TRANSACTION TRANSACTION COSTS TRANSACTIONS COSTS TREASURY TRUSTEE UNEMPLOYMENT VILLAGE VILLAGE FUNDS VILLAGES WEALTH TAX WOMAN WOMEN BORROWERS 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. 2012-03-19T18:06:56Z 2012-03-19T18:06:56Z 2011-12-01 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 http://hdl.handle.net/10986/3692 English Policy Research working paper ; no. WPS 5920 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |