How Islamic finance can end poverty in Pakistan

How Islamic finance can end poverty in Pakistan

ISLAMABAD (APP): Speakers at a conference Wednesday urged the need for exploiting the emerging potential of Islamic Banking and introducing Shariah complaint financial products for the development of small and medium enterprises (SMEs) as well as promoting the financial inclusion.

They said Islamic finance could play a critical role in economic development, poverty alleviation and enhanced prosperity and stability.

The two-day conference on 'financial inclusion strategies in South Asia: methodology and perspectives' was organized by Zarai Tarqiatie Bank Limited (ZTBL) and World Bank in collaboration with Association of National Development Finance Institutions in Member Countries of the Islamic Development Bank (ADFIMI).

The event was organized with an aim to promote the financial inclusion to eliminating the poverty and promote the micro-finance as well as create awareness of the importance about the financial inclusion.

The other objective of the event was also to review the state of financial inclusion in South Asia and share the good practices of member countries to promote Islamic finance and development of SMEs in the region.

Speaking on the occasion Head of World Bank Global Islamic Finance Development Center Dr Zamir Ahmad said total unbanked population was registered at 73 percent and out of the total 22 percent unbanked 22 percent were in muslim countries.

He said in Pakistan unbanked population was recorded at 5.2 percent, Bangladesh at 3.7 percent, Indonesia 20.6 percent, China at 11 percent and India at 29 percent.

He informed Islamic finance was emerging across the world due to its strong fundamentals and had reached to a certain threshold.

According to a study jointly organizes by World Bank and Islamic Development Bank over 37 percent population refused to enough in conventional banking, he added.

Dr Zamir said currently more than 15 percent of overall banking sector was comprising Islamic finance and it included in the development agenda of G-20.

The interest in Islamic banking and finance was increasing in non-muslim countries including UK, Germany and other countries for its strong fundamentals, he added.

Speaking on the occasion, Ahmad Ali Siddiqui Executive Vice President and Head of Shariah Department of Meezan Bank informed that over 700 Islamic financial institutions were operating as the total size of Islamic finance has reached to $ 1.8 trillion.

He said local share in global Islamic finance was 1 percent which had a huge scope to expend as demand for Shariah complaint financial products were increasing.