Empowering Communities

Abstract

This chapter offers a comprehensive examination of the intersection of Islamic finance and financial inclusion, shedding light on how Islamic financial principles can contribute to expanding financial access and promoting economic inclusivity. Examining the fundamental principles of Islamic finance reveals the inclusive foundations upon which this financial system is constructed. It has also examined the case studies and real-world examples to illustrate the tangible effects of Islamic finance on marginalised populations and economies. This chapter investigates the impact of financial technology (Fintech) and Islamic microfinance institutions on the availability of Islamic financial products. The chapter discussed the limitations of Islamic finance, which include a prohibition on interest, restrictions on loans and investments, and sector limits. Innovative products provide financing alternatives. In addition, the chapter discuss how the challenges of standardisation, regulatory compliance, and consumer awareness impede the widespread adoption of Islamic finance in practise. For Islamic financial services to contribute more effectively to financial inclusion, addressing these issues requires industry cooperation, regulatory support, and consumer education.