While sharia-compliant financial services develop, including in the West, a study by the World Bank undermine their effectiveness against financial exclusion of Muslims.

With less than a month of the announcement by the British finance minister, George Osborne, the intent of London to issue next year Koranic bonds ( sukuk ) for 200 million pounds to become ” the first Western center for Islamic finance ” , a study by the World Bank reopened the debate. The development of financial services compatible with the Sharia can he have a real impact on the access to finance of Muslims?

Nothing less certain, the researchers conclude that, in order to better distinguish between religious identification and other national characteristics, have chosen to conduct a comparison between Muslims and non-Muslims in a country, choosing those where more than 1% less than 99% of the population claims to this confession.


Muslims do not borrow less than other

Of course, Muslims are less likely to have a bank or savings institution with a formal account, reveals the analysis of data from a sample of over 65,000 adults (based Global Findex) , from 64 countries that include 75% of the world’s Muslims, however, at the global level, only 7% of Muslims unbanked cite religion as an obstacle to the opening: as far as non-Muslims.

The cost, distance or lack of documentation seem more influence among the causes of financial exclusion, regardless of religious affiliation. Moreover, Muslims do not seem less likely than other segments of the population to borrow, including from formal institutions.

” Of course, the absence of differences in borrowing behavior can be explained by the multitude of existing products and trivialization, but given the relatively small sector of Islamic finance size, it seems more plausible that the vast majority of Muslims financially included using products and conventional banking ” , observe the researchers.

The structure of supply pet need could weigh more than Sharia

If these results vary significantly by region, however they seem independent of other individual and social variables as well as the expansion of Islamic finance or percentage of Muslims in the country. May therefore need to push beyond any religious considerations and the structure of the supply of financial services in predominantly Muslim regions would eventually play more than demand, so think the authors, who have yet not been able to verify such assumptions and therefore require further research.

As for the use of Islamic financial services, which better meet the precepts of Islam in the sharing of profits and losses, avoiding interest-bearing loans, only 2% of the population in five countries (Algeria, Egypt, Morocco, Tunisia and Yemen) said in use despite their higher costs, while 48% know they exist. 37% expressed a preference for cheaper conventional loan or have no preference.