Religion and Finance: The Case of Muslim World
Utilizing the most recent macro and micro-economic data available and calculating the modern measures of financial sector development, this extensive inquiry purports to determine the current state of finance, both in terms of depth (size) and breadth (diffusion) dimensions, at the 57 OIC countries vis-à-vis their income and regional counterparts in the world. After controlling for country size and density factors, it also tries to investigate the association between financial development and other country traits. It is astonishing to see that three out of four adults in the Islamic world are excluded from the financial system. Furthermore, the size of the financial industry in a typical Muslim country is almost fifty percent smaller than the typical country in the world. Such level of financial exclusion and financial underdevelopment is an incredible waste of valuable development resources.
Index Terms- OIC, Islamic finance, financial development, financial access