Only 20% Muslims access financial services, says World Bank

Emir blames poor infrastructure

With prohibitive factors ranging from belief, lack of trust to nearness issues or non-availability of financial institutions, only 20 per cent of Muslims worldwide have access to conventional banking services.

However, the growing development of products in Islamic finance now is offering a new hope in closing the huge gap and the associated financial losses that exist in the Muslim world.

The Vice-President and Treasurer, World Bank, Arunma Oteh, gave the indication, while speaking yesterday at the World Bank / Islamic Financial Services Board high-level seminar on Islamic Finance, in Washington DC, USA.

She noted that 20 per cent of approximately 1.6 billion Muslim faithful worldwide in active financial services shows that “the growth of Islamic finance is critical in closing this gap.”

According to her, the number is scary, but raised the hope that with the emergence of Islamic financing products, there is the tendency that many
Muslims will access financial services of their choice.

But the Emir of Kano, Muhammadu Sanusi, in his keynote address, lamented that poor infrastructure in Africa resulted to assessed two per cent
reduction in growth each year, while estimating the cost of closing the gap at $360 billion between 2011 to 2014.

According to the Emir, Islamic finance facilities can be used in funding various social projects such as immunisation projects, education and green energy among others, with the potential of creating equitable distribution of resources and growth.

On the part of the World Bank, Oteh said during the last fiscal year, it issued $63.5 billion bonds across different markets, 22 different currencies, with some of them being innovative offerings from the developing countries.

“We now manage about $170 billion asset for 62 clients and our own institution. In some cases, people will like to access financial services, but they are unable to do so because of factors that are prohibitive to their faith or lack of financial institutions near their area or lack of trust of financial service providers.

“Many Muslims around the world refrain from actively accessing the conventional financial services around the world due to their beliefs,” she said.

Noting that Islamic finance has emerged a veritable tool for achieving the Sustainable Development Goals (SDGs), she added that investors must apply the ethical and quantitative measures in their investment decisions.

“Islamic finance is uniquely well suited to promote infrastructure development which is critical in promoting many of the SDGs from clean water to energy,” she added.