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Can Islamic Banking Increase Afghans’ Access to Finance?

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The World Bank estimates that only 10 percent of Afghans hold an account with a financial institution, far below the average of 22 percent for low-income nations. The reasons for this are numerous: many Afghans report mistrust of banks, some lack the proper documentation to access financial services, and those living outside major population centers find great difficulty in even traveling to a bank. Of particular note from the World Bank’s Global Findex is that nearly one-quarter of those surveyed in Afghanistan responded that religious reasons play a role in their choice not to have a bank account. Similarly, a majority of business owners responded in a separate survey that they prefer non-interest-based financial products that are sharia-compliant. These findings suggest that a critical barrier to expanding Afghans’ access to finance is the availability of services and products that they feel comfortable using — that is to say, Islamic banking.

For more on this story visit the following link: Can Islamic Banking Increase Afghans’ Access to Finance? 

Source: Chemonics

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