The relationship between financial inclusion and financial stability in Muslim countries in comparison with OECD countries: the role of institutions
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The world is striving towards eradicating poverty via inclusive growth. Financial inclusion is seen as an important tool towards getting the unbanked, poor population into the financial system. Does greater financial inclusion create financial stability? Engaging the less financially capable people into the financial system is not a risk-free undertaking. Relaxation of rules and regulations which trigger sub-prime crisis in 2007-2008 has proven that more exposure to 'unfit' borrowers may lead to financial instability. Our study focuses on OIC countries for the impressive growth of lslamic finance during the past decade where 95% of the assets reside in the majority-Muslims countries yet their financial inclusion still within the lower range. We benchmark all the Research Questions against OECD countries which represent the advanced economies with higher level of financial development. Our first objective of the study is to identify the key determinants of financial inclusion. Following which, this study also analyses the impact of financial inclusion on financial stability. Succeeding the financial crisis in 2007-2008, the literature has been relating the important influence of institutional quality in maintaining financial stability. This brings us to our third objective of the study, which is to examine the role of institutional quality as a mediator for maintaining financial stability in both regions ...
Financial inclusion , Financial stability , Muslim countries , OECD countries
Tengku Zainal Abidin, T. R. (2019). The relationship between financial inclusion and financial stability in Muslim countries in comparison with OECD countries: the role of institutions (Doctoral dissertation). INCEIF, Kuala Lumpur. Retrieved from https://ikr.inceif.org/handle/INCEIF/3150