Can Islamic Philanthropy Increase Financial Inclusion?

Abdul Ghafar Ismail (), Muhammad Hasbi Zaenal () and Umar Taufiq
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Muhammad Hasbi Zaenal: Universiti Kebangsaan Malaysia

No 1437-2, Working Papers from The Islamic Research and Teaching Institute (IRTI)

Abstract: Financial inclusion has become an integral part of many development institutions and multilateral development banks (MDBs) in an effort to promote inclusive growth. Many countries introduce their financial inclusion policy and strategy. The study that reports on the financial insclusion are not many. Furthermore, the study that specifically aims to address the financial inclusion for Islamic financial system is very limited. This study is limited to banking services. From the institutional perspective, it only looks at the partial aspects of Islamic finance. Whereas the definition of Islamic finance should institutionally cover the philanthropy. This study is aimed to explain theoretically on how the philanthropy instruments can increase the financial inclusion. Our study show that: first, philanthropy instruments increase the range of financial services available to underserve markets. Second, the more philanthropy instruments, they increase the number poor to have an account with Islamic financial institutions and at the same time the poor also get access to financings from the Islamic financial instututions.

Keywords: financial institutions; financial inclusion; philanthropy; financial services (search for similar items in EconPapers)
Pages: 17 pages
Date: 2016-01-10
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Persistent link: https://EconPapers.repec.org/RePEc:ris:irtiwp:1437_002

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