Islamic Finance in Sub-Saharan Africa: Status and Prospects

Gelbard, Enrique; Hussain, Mumtaz; Maino, Rodolfo; Mu, Yibin; Yehoue, Étienne B.; Gulde-Wolf, Anne-Marie

doi:10.2139/ssrn.2489212

Cited by 14 publications

(17 citation statements)

References 12 publications

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“…The situation worsened in 2016 as the rate increases from 39.5 per cent to 41.6 per cent (EFInA, 2017). Existing literature had established that Islamic financial instruments offer a comprehensive approach to poverty eradication and enhance access to finance among the vulnerable poor, especially Muslims communities in Nigeria, and ultimately build a healthy and vibrant economy (Gelbard et al, 2014). Similarly, the instruments offered by the modern-day Islamic financial service providers have strong historical pedigrees as evidenced by their application throughout history in various Muslim communities ( Cihák and Hesse, 2010).…”

Section: Financial Inclusion In Nigeriamentioning

confidence: 99%

“…Both risk-sharing financing instruments and redistributive instruments such as Zakat, Sadaqah and Qardhul Hassan complement each other to offer a comprehensive approach to poverty eradication and enhance access to finance among the vulnerable poor especially Muslims communities in Nigeria and ultimately build a healthy and vibrant economy (Gelbard et al, 2014;Zauro et al, 2016). The people affected by the problems of financial exclusion are usually individuals and social groups at the bottom of the social ladder, because of their poor economic conditions such as low income and perhaps lack of financial literacy ( Conková et al, 2013).…”

Section: Financial Inclusion In Nigeriamentioning

confidence: 99%

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Enhancing socio-economic justice and financial inclusion in Nigeria

Zauro¹,

Saad

Sawandi

2020

JIABR

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Purpose The purpose of this paper is to discuss the roles of Zakat, Sadaqah and Qardhul Hassan within the context of the existing literature as major Islamic financial instruments for enhancing socio-economic justice amongst Muslims haves and have-nots as these enhance financial inclusion in Nigeria. Design/methodology/approach The discussion in this paper is based on secondary sources such as the divine knowledge contained in the Qur’an, Hadiths and the existing literature, such as previously conducted empirical studies and Islamic world view (Tawhidi epistemology). Findings This paper implores Islamic societies to use Zakat, Sadaqah and Qardhul Hassan as instruments that encourages wealth redistribution that promotes efficient and effective wealth redistribution between haves and have-nots as part of the vicegerent (khaliphah) role between mortal being (human) and his immortal creator (Allah). This paper concludes by suggesting the use of these Islamic financial instruments as means to enhance socio-economic justice and financial inclusion in the Nigeria’s Muslims’ communities that are negatively affected by the high rate of financial exclusion and poverty as had been previously practiced in the Muslim world throughout the Islamic history. Research limitations/implications This paper provides critical suggestions on the ways Zakat, Sadaqah and Qardhul Hassan will contribute significantly towards assisting Nigeria in achieving its vision of reducing the financial exclusion rate that is currently put at 41.6% to 20% by the year 2020 and may foster inclusive growth and sustainable development. However, the limitation is that it is a mare conceptual study, and the future researchers may subject it to the scientific test to offer empirical evidence regarding the roles of Zakat, Sadaqah and Qardhul Hassan towards closing the gap of financial exclusion in Nigeria. Originality/value This paper contributes to the existing literature on the doctrine of the Islamic moral economy by recommending the adoption of Islamic financial instruments as tools for enhancing income redistribution and financial inclusion.

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Section: Financial Inclusion In Nigeriamentioning

confidence: 99%

Section: Financial Inclusion In Nigeriamentioning

confidence: 99%

Enhancing socio-economic justice and financial inclusion in Nigeria

Zauro¹,

Saad

Sawandi

2020

JIABR

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“…That financial inclusion can be addressed either by promoting risk-sharing contracts or through the use of specific instruments of redistribution of wealth among the members of the society (Askari et al, 2010;Iqbal and Mirakhor, 2013). Both risk-sharing financing instruments and redistributive instruments such as Zakat, Sadaqah and Qardhul Hassan complement each other to offer a comprehensive approach to poverty eradication and enhance access to finance among the vulnerable poor especially Muslims communities in Nigeria and ultimately build a healthy and vibrant economy (Gelbard et al, 2014;Zauro et al, 2020). The people affected by the problems of financial exclusion are usually individuals and social groups at the bottom of the social ladder, due to their poor economic conditions such as low income and perhaps lack of financial literacy ( Conkov a et al, 2013).…”

Section: Islamic Perspective On Financial Inclusionmentioning

confidence: 99%

Integration of Waqf towards enhancing financial inclusion and socio-economic justice in Nigeria

Zauro¹,

Saad

Ahmi

et al. 2020

IJOES

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Purpose This paper aims to discuss the role of Waqf as a means of enhancing financial inclusion and socio-economic justice in Nigeria. Design/methodology/approach The methodology in this paper is that the data were elicited from secondary sources such as the Al-Qur’an, Hadiths and other empirical studies in the existing literature. The Tawhidi epistemology (Islamic world view) also has been obtained to deliver better understanding on the findings. Findings The paper implores Islamic societies to take advantages of integrating Waqf to support the financing needs of disadvantaged members of the Muslims communities, especially the Muslims, dominated northern Nigeria with a high level of financial exclusion. The Waqf funds if integrated and institutionalized will support the region by making the fewer privilege members of that community-engaged thereby economically and enhancing the financial inclusion. This will also lead to economic growth and socio-economic development of Nigeria. Practical implications The paper concludes by suggesting the establishment of Waqf funds to supports the less privileged people through Islamic Microfinance as means of enhancing socio-economic justice in Nigeria’s Muslims’ communities, which is negatively affected by the high rate of financial exclusion and poverty. This paper also provides critical suggestions on the ways the integration of Waqf funds will contribute significantly towards assisting Nigeria in achieving its vision of reducing the financial exclusion rate and may foster inclusive growth and sustainable development. Originality/value This paper is a conceptual study and, therefore, limited to the content of the existing literature. Hence, the future researchers may replicate and test it empirically for a more scientific justification regarding the roles of Waqf towards enhancing financial inclusion in Nigeria.

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“…The average real GDP growth in the MENA region has been about 4 percent, with the highest growth rate of 11 percent in Qatar and 5.2 percent in Saudi Arabia. Although some argue that rising oil revenues and the real estate boom in some GCC countries may have also helped the industry to grow, pointedly, real non-oil GDP of GCC countries has expanded, on average, by only 3 percent, while the Islamic finance industry has seen double-digit growth in the past 25 See for example, Gelbard et al, (2014) and Khan and Porzio (2010). 10 years.…”

Section: Growth Drivers Of Islamic Financementioning

confidence: 99%

An Overview of Islamic Finance

2015

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Islamic finance has started to grow in international finance across the globe, with some concentration in few countries. Nearly 20 percent annual growth of Islamic finance in recent years seems to point to its resilience and broad appeal, partly owing to principles that govern Islamic financial activities, including equity, participation, and ownership. In theory, Islamic finance is resilient to shocks because of its emphasis on risk sharing, limits on excessive risk taking, and strong link to real activities. Empirical evidence on the stability of Islamic banks, however, is so far mixed. While these banks face similar risks as conventional banks do, they are also exposed to idiosyncratic risks, necessitating a tailoring of current risk management practices. The macroeconomic policy implications of the rapid expansion of Islamic finance are far reaching and need careful considerations.

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Islamic Finance in Sub-Saharan Africa: Status and Prospects

Cited by 14 publications

References 12 publications

Enhancing socio-economic justice and financial inclusion in Nigeria

Enhancing socio-economic justice and financial inclusion in Nigeria

Integration of Waqf towards enhancing financial inclusion and socio-economic justice in Nigeria

An Overview of Islamic Finance

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