Potential of Islamic banks as financial inclusion for poverty alleviation: Somalia as a case study

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This dissertation aims to study Islamic banks' potential in contributing to the access of financial services to alleviate poverty in Somalia using a structured questionnaire. We used stratified and purposive random sampling techniques to select the respondents for the questionnaire. The respondents consisted of Islamic bankers across the country, students, and academicians in the field of Islamic banking and finance. After the data was collected, we employed Ordinary Least Square (OLS) to analyse. The findings indicate a strong association between the presence of Islamic banks and financial inclusion. Signalling that the diversity of its products has a substantial effect on access to financial services, especially among poor people. It reduces poverty by eliminating society's inequalities and improving the overall standard of living. We further observed that low-income and high value of the required collateral and lack of enough retail products in the banking portfolio are main obstacles that make it challenging for the poor to access financial services. The finding also indicates that Islamic banks are hesitant to use fintech to overcome the trust issue to expand their services to financially excluded households and businesses with low incomes, mainly due to political instability and lack of historical data.
Islamic banks , OLS , Current products , Financial inclusion , Poverty reduction , Project paper (MSc)
Mohamed Ali, M. (2021). Potential of Islamic banks as financial inclusion for poverty alleviation: Somalia as a case study (Master dissertation). INCEIF, Kuala Lumpur. Retrieved from

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