Islamic Finance and Financial Inclusion: Measuring Use of and Demand for Formal Financial Services among Muslim Adults
By Asli Demirgüç-Kunt, L. Klapper, Doug Randall. 2013
192 citations recorded by the source corpus.
Abstract In recent years, the Islamic finance industry has attracted the attention of policymakers and international donors as a possible channel through which to expand financial inclusion, particularly among Muslim adults. Yet cross-country, demand-side data on actual usage and preference gaps in financial services between Muslims and non-Muslims have been scarce. This paper uses novel data to explore the use of and demand for formal financial services among self-identified Muslim adults. In a sample of more than 65,000 adults from 64 economies (excluding countries where less than 1% or more than 99% of the sample self-identified as Muslim), the analysis finds that Muslims are significantly less likely than non-Muslims to own a formal account or save at a formal financial institution after controlling for other individual- and country-level characteristics. But the analysis finds no evidence that Muslims are less likely than non-Muslims to report formal or informal borrowing. Finally, in an extended survey of adults in five North African and Middle Eastern countries with relatively nascent Islamic finance industries, the study finds little use of Sharia-compliant banking products, although it does find evidence of a hypothetical preference for Sharia-compliant products among a plurality of respondents despite higher costs.
Subfields: Accounting, Economics and Econometrics, Sociology and Political Science
View Paper: https://www.semanticscholar.org/paper/37fe3dc2c7f12879dba9e0590b7933ac7c7776ff
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Citations in the corpus
- Financial Inclusion, Financial Literacy and Economically Vulnerable Populations in the Middle East and North Africa (2019, unknown): “…a respondent’s preference for and usage of conventional banking and financial services, especially since the principles of Shari’ah (Islamic law) prohibit the payment or acceptance of interest charges (i.e., riba) (e.g., Demirgüç-Kunt, Klapper, and Randall 2013; Naceur, Barajas, and Massara 2015).”
- Analysis of the determinants of financial inclusion in Central and West Africa (2016, unknown): “…the few recent studies conducted on financial inclusion using the World Bank Global Findex database, e.g., Allen, Carletti, et al. (2013); Allen, Demirguc-Kunt, et al. (2012); Anson et al. (2013); Demirguc-Kunt and Klapper (2012a, 2012b); Demirguc-Kunt et al. (2013); Klapper and Singer (2013).”
- Is financial inclusion good for bank stability? International evidence (2017, methodology): “…papers assess the effect of financial inclusion on various socio-economic indicators (e.g., Butler and Cornaggia, 2011; Allen et al., 2013; Demirgüç-Kunt et al., 2013a; Demirgüç-Kunt et al., 2013b), or use disaggregated single indicator of financial inclusion (e.g., BDM, 2007), this paper…”