Enhancing Financial Inclusion through Islamic Finance, Volume II

Description

https://www.palgrave.com/gp/book/9783030399382 This book is the second of two volumes which highlight the concept of financial inclusion from the Islamic perspective. An important element of the Sustainable Development Goals (SDGs), financial inclusion has been given significant prominence in reform and development agendas proposed by the United Nations and G-20. The significance of Islamic financial inclusion goes beyond improved access to finance to encompass enhanced access to savings and risk mitigation products, as well as social inclusion that allows individuals and companies to engage more actively in the real economy. It represents one of the important drivers of economic growth. This volume explores the financial risks associated with lending to low-income groups due to high poverty levels and the lack of collateralization mechanisms. The first book on the market to provide empirical evidence of Islamic microfinance, deposit insurance and micro-entrepreneurship through the analysis of models and country case studies, this edited collection will be of value to those researching development finance, financial inclusion and Islamic finance. Preface Acknowledgments Contents Notes on Contributors List of Figures List of Tables Part I: Islamic Financial Inclusion for Sustained Growth and Poverty Alleviation Chapter 1: Introduction References Chapter 2: Financial Inclusion for Poverty Alleviation: The Role of Islamic Finance in Bangladesh 2.1 Introduction 2.2 Literature Review 2.3 Objective of the Study 2.4 Theoretical Underpinning of Financial Inclusion 2.4.1 Defining Financial Inclusion 2.4.2 Islamic Concept of Financial Inclusion 2.5 Where Do We Stand Globally? 2.6 Access to Financial Services in Bangladesh 2.7 Methodology 2.8 Financial Sector in Bangladesh 2.8.1 Banking Sector of Bangladesh 2.8.2 Non-bank Financial Institutions 2.8.3 Microfinance Institutions 2.9 Role of Agriculture in Achieving Financial Inclusions in Bangladesh 2.9.1 Agricultural Credit Program Banks in Bangladesh in FY2017 2.9.2 Credit Disbursement to Agriculture 2.9.3 Bangladesh Bank’s Refinance Against Agricultural Loans 2.9.3.1 Special Refinance Scheme for Share-croppers 2.9.3.2 Special Refinance Scheme for the Jute Sectors 2.9.3.3 Special Refinance Scheme for Dairy Farming 2.10 Role of Microfinance Institutes (MFIs) in Achieving Financial Inclusion in Bangladesh 2.10.1 Area Covered by MFIs 2.10.2 Members of MFIs 2.10.3 Allocation of Microcredit by Economic Activities 2.10.4 Micro-enterprise Program of MFIs 2.10.5 MFIs Loan to Micro-enterprises 2.10.6 Micro-insurance for Clients of MFIs 2.10.7 Employment Generation by MFIs 2.10.8 Social Services by MFIs 2.11 Role of the SME Sector in Achieving Financial Inclusion in Bangladesh 2.11.1 Bangladesh Bank Refinance for SMEs 2.11.2 Refinance Scheme for Agro-based Product Processing Industries 2.11.3 Refinance Fund for New Entrepreneurs Under Cottage, Micro, and Small Categories 2.11.4 Islamic Shariah-Based Refinance Scheme 2.11.5 Refinance for Women Entrepreneurs 2.11.6 Urban Building Safety Project (UBSP) 2.11.7 Financial Inclusion of Garment Workers 2.12 Corporate Social Responsibility in Achieving Financial Inclusion in Bangladesh 2.12.1 CSR Activities of Banks and NBFIs 2.12.2 CSR activities of Islami Bank Bangladesh Limited 2.12.3 ‘No Poverty’ and ‘Zero Hunger’ for Financial Inclusion 2.12.4 No-Frill Accounts (NFAs) for Farmers and the Underprivileged Group of the Society 2.12.5 School Banking 2.12.6 Banking for Working/Street Children 2.12.7 Agent Banking 2.12.8 Bangladesh Bank Refinance Scheme for BDT 10 A/C Holders 2.13 Mobile Financial Services (MFS) 2.14 Causes of Financial Exclusion 2.15 Conclusion and Recommendations References Chapter 3: Does Bank Concentration and Financial Development Contribute to Economic Growth? Evidence from OIC Countries 3.1 Introduction 3.2 Literature Review 3.3 Data and Methodology 3.3.1 Baseline Empirical Models 3.3.2 Estimation Method 3.3.2.1 Variables 3.3.3 Data 3.3.3.1 Sample Selection and Data Collection 3.3.3.2 Descriptive Analysis: Overview 3.4 Empirical Results 3.4.1 Linear Model 3.4.2 Non-Linear Model 3.4.3 Interaction Term Model 3.4.4 Low-Income Countries Model 3.4.5 Corrupted Countries Model 3.5 Concluding Remarks References Chapter 4: Using Islamic Banking to Improve Financial Inclusion in Selected States of Northern Nigeria: The Case of Jaiz Bank PLC 4.1 Introduction 4.2 A Review of Concept of Financial Inclusion: Conventional Perspective 4.3 Empirical Review on Financial Inclusion via Islamic Banking Linkages 4.4 Methodology 4.5 Measuring Financial Inclusion 4.5.1 Empirical Model 4.6 Data Presentation 4.6.1 Response Rate 4.6.2 Individual Item Reliability 4.6.3 Regression Models for Financial Inclusion 4.7 Discussion of Findings 4.8 Conclusion 4.9 Recommendations Appendix: Summary of Measurement Scales References Chapter 5: Financial Inclusion Disclosure in Islamic Microfinance: The Case of Baitul Mal Wa Tamwil 5.1 Introduction 5.2 Literature Review 5.2.1 Financial Inclusion in Islamic Microfinance 5.2.2 Theoretical Framework 5.3 Importance of Financial Inclusion Disclosure for Islamic Cooperative 5.4 Description of Data and Variables 5.4.1 Dependent Variable 5.4.2 Independent Variable Operational Definition 5.5 Results and Discussion 5.5.1 Descriptive Analysis 5.5.2 The Extent and Quality of Financial Inclusion Disclosure by Information Dimension 5.5.3 Relationship Between Extent and Quality of Financial Inclusion in the Annual Report in BMT 5.5.3.1 Correlation Analysis 5.5.4 Relationship of the Level of Financial Inclusion with Financial Performance 5.5.4.1 Hypothesis 1: ROE 5.5.4.2 Hypothesis 2: Leverage 5.5.4.3 Hypothesis 3: Size of BMT 5.6 Conclusion Appendix: Holistic Financial Inclusion Disclosure Items References Chapter 6: Public Awareness and the Role of Islamic Deposit Insurance in Promoting Financial Inclusion 6.1 Introduction 6.2 Literature Review 6.3 Purpose of the Study 6.4 Research Methodology 6.4.1 Population and Sampling 6.4.2 Measures 6.5 Data Analysis 6.5.1 Demographic Profile 6.5.2 Awareness Level 6.5.3 Relationship Between Awareness, Confidence in the Financial System, Increased Participation and Increased Savings 6.5.4 Awareness and Confidence in the Financial System 6.5.5 Awareness and Increased Participation in the Financial System 6.5.6 Awareness and Increased Household Savings 6.6 Conclusion References Chapter 7: Islamic Financial Inclusion for Agriculture Development: The Case of South Al-Dweim Agricultural Microfinance Projects in the White Nile State, Sudan (2016–2018) 7.1 Introduction 7.2 Literature Review 7.2.1 Islamic Wholesaling Banks and Microfinance 7.2.2 The CBOS Standard Restricted Mudaraba Wholesale Lending Contract 7.2.3 Microfinance Wholesaling via Portfolios 7.2.4 Technology Transfer and Extension 7.2.5 Agricultural Credit 7.2.6 Islamic Financial Inclusion for Agriculture Development 7.3 Data Sources 7.3.1 Primary Source of Data 7.3.1.1 Questionnaire 7.3.1.2 Secondary Data Sources 7.4 Discussion 7.4.1 Characteristics of Respondents 7.4.2 Questionnaire 7.4.3 Network Performance Indicators in Sudan 7.4.4 Financial Performance Summary of AL-FAL Islamic Microfinance Company 7.5 Conclusion 7.5.1 Summary of Major Findings 7.5.2 Recommendations References Chapter 8: Enhancing Financial Inclusion Through Sustainable Islamic Microfinance in Pakistan: A Participatory Products Development Perspective 8.1 Introduction 8.1.1 Socioeconomic Profiles of Pakistan and State of Financial Inclusion 8.1.2 Analysis of Microfinance Sector 8.1.3 Objective of the Research 8.2 Review of Literature 8.3 Case Studies 8.4 Conclusion References Part II: Islamic Finance for Financial Inclusion: Countries Diagnostics Chapter 9: Enabling Mobile Microfinance: Opportunities and Challenges 9.1 Introduction 9.2 Literature Review 9.2.1 The Context of Microfinance in Sudan 9.2.2 Opportunities for MFI Services in Sudan 9.2.3 Challenges Faced by Microfinance in the RoS 9.3 Objectives and Methodology 9.3.1 Objectives 9.3.2 Methodology 9.3.3 Limitations of the Methodology and Ethical Considerations 9.4 Survey Results 9.5 Conclusion References Chapter 10: The Role of Islamic Finance in Achieving Economic Growth: An Econometric Analysis of Pakistan 10.1 Introduction 10.2 Literature Review 10.3 Data and Methodology 10.3.1 Econometric Methodology 10.3.2 Model Specification 10.4 Results and Discussion 10.4.1 Descriptive Analysis 10.4.2 Unit Root Analysis 10.4.3 Ordinary Least Square Method (OLS) 10.4.4 Granger Causality Analysis 10.5 Conclusion and Recommendations Appendix: Data of Variables References Chapter 11: The Impact of the Islamic Banking Industry on Economic Growth and Poverty Reduction in Pakistan 11.1 Introduction 11.2 Literature Review 11.2.1 Summary 11.3 Data 11.4 Measurement of Economic Growth and Poverty 11.5 Methodology 11.5.1 Model and Estimation: Islamic Banking Development and Poverty 11.5.2 Model and Estimation: Islamic Banking Development and Economic Growth 11.6 Conclusion References Chapter 12: Alleviating Poverty Through Islamic Microfinance: Factors and Measures of Financial Performance and Roles of Islamic Values and Financial Policies 12.1 Introduction 12.2 Literature Review 12.2.1 The Theory of Informal Credit Market 12.2.2 Financial Inclusion and Alleviation of Poverty Issues 12.2.3 Roles of BMT in Indonesia 12.3 Methodology 12.3.1 Data 12.3.2 Method 12.3.3 Empirical Model 12.4 Results and Findings 12.5 Conclusion References Chapter 13: Achieving Sustainability in Sudan Through Microfinance and Mobile Banking 13.1 Introduction 13.2 Sudan Knowledge Economy Foundations 13.3 ICT Development in East Asian Countries 13.4 Total Factor Productivity Implications 13.5 Sudanese Microfinance Sector 13.6 Mobile Banking 13.7 The Model of the Study 13.8 Results and Discussion 13.8.1 Microfinance Customer 13.8.2 Microfinance Service Providers (MFPs) 13.8.3 Interview Interpretation 13.8.4 Empirical Findings Discussion 13.9 Conclusion and Policy Implications References Chapter 14: Success Factors of the i-Taajir Micro-Entrepreneurship Model: Lessons for Islamic Banks and Muslim Universities 14.1 Introduction 14.2 CIE, IIUM-CIMB Islamic Entrepreneurship Program 14.3 The Partners in i-Taajir 14.4 The Objectives of i-Taajir 14.5 The i-Taajir Logo 14.6 i-Taajir Organizational Structure 14.7 Functions of the Executives 14.7.1 Planning 14.7.2 Organizing 14.7.3 Controlling 14.7.4 Selection of Participants 14.7.5 The Soft Launch for Selecting Potential Participants 14.7.6 Training 14.7.7 Preparation of Business Proposals 14.7.8 Preliminary and Final Presentations 14.7.9 Selection of Successful Candidates for Award of Contracts 14.7.10 Financing Modes 14.7.11 Launching for the Award of Contracts to Successful Candidates 14.7.12 Summary of i-Taajir Financing Processes 14.8 Conclusion References Chapter 15: An Empirical Study on the Role of Islamic Microfinance in Enhancing Financial Inclusion in Bauchi State, Nigeria 15.1 Introduction 15.2 Literature Review 15.2.1 Concept of Microfinance 15.2.2 Concept of Islamic Microfinance 15.2.3 Concept of Financial Inclusion 15.2.4 Microfinance in Nigeria 15.2.5 Empirical Literature 15.3 Research Methodology 15.3.1 Population 15.3.2 The Sampling Technique and Sample Size 15.3.3 Model Specification 15.3.4 Methods of Data Collection 15.3.5 Techniques of Data Analysis 15.4 Findings and Discussions 15.4.1 Socio-economic Characteristics of the Respondents 15.4.2 Correlation Analysis 15.5 Conclusion and Recommendations References Index