IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v4y2020i8p438-443.html
   My bibliography  Save this article

The Potentials of Islamic Banking on Poverty Alleviation in Nigeria

Author

Listed:
  • Rabiu Abubakar Abba

    (Department of Economics, Al-Madina International University, Kualalumpur-Malaysia)

  • Besar Bin Ngah

    (Department of Economics, Al-Madina International University, Kualalumpur-Malaysia)

Abstract

It is a well-known fact that the global financial crisis prompted the establishment of Islamic finance to complement the traditional financial institutions, as a medium to lessen the endemic risk exposure inherent in the financial institutions. The principle goals and functions of the Islamic finance comprises the economic well-being of the populace, through full employment and maximum rate of economic growth, equal distributions of income and wealth and as a result socio-economic justice, and the generation of sufficient savings and their productive mobilization and stability in the value of money (Chapra, 2000). On the other hand, poverty, which is the absence of means to attain a “decent†standard of living, has been found to be very common in the Muslim world. It has been estimated that over 40 per cent of the Muslim population languishes in abject poverty, with nearly 350 million living on less than US$1.25 a day (C0MCEC, 2014). The objective of this study is therefore, to determine whether Islamic banking in Abuja, Nigeria has the potentials to alleviate poverty. The research is exploratory in nature, relying on secondary sources of data such as journals, periodicals, conference proceedings, textbooks, internet search and other source of published data. Findings from the analysis revealed that Islamic Banking is indeed a means of alleviating poverty. The conclusion drawn from the study indicates that the following are the poverty alleviation strategies, methods and instruments used by Islamic banks, these are; Murabaha, Mushraka, Mudaraba, Ijarah, Sukuk, Interest free service, good business ethics, Islamic microfinance and corporate social responsibility. The study further observed that Abuja, Nigeria’s Federal Capital, with its large Muslims population, shifting of attention and growing interest on Islamic banking products by its populace and the promotion of development of infrastructures in Malaysia and other countries presents a great potential for the practicability of Islamic banking products in alleviating poverty in Abuja, Nigeria. The study therefore, recommended that Islamic Banking should be highly encourage by the appropriate authorities in order to assist in the war against poverty in Abuja and Nigeria at large.

Suggested Citation

  • Rabiu Abubakar Abba & Besar Bin Ngah, 2020. "The Potentials of Islamic Banking on Poverty Alleviation in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(8), pages 438-443, August.
  • Handle: RePEc:bcp:journl:v:4:y:2020:i:8:p:438-443
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-4-issue-8/438-443.pdf
    Download Restriction: no

    File URL: https://www.rsisinternational.org/virtual-library/papers/the-potentials-of-islamic-banking-on-poverty-alleviation-in-nigeria/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Pejman Abedifar & Shahid M. Ebrahim & Philip Molyneux & Amine Tarazi, 2015. "Islamic Banking And Finance: Recent Empirical Literature And Directions For Future Research," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 637-670, September.
    2. repec:idn:jimfjn:v:3:y:2018:i:specialissueh:p:1-12 is not listed on IDEAS
    3. Seven, Unal & Coskun, Yener, 2016. "Does financial development reduce income inequality and poverty? Evidence from emerging countries," Emerging Markets Review, Elsevier, vol. 26(C), pages 34-63.
    4. Muhammad Umer Chapra, 1996. "Monetary Management In An Islamic Economy," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 4, pages 2-35.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Perugini, Cristiano, 2020. "Patterns and drivers of household income dynamics in Russia: The role of access to credit," BOFIT Discussion Papers 11/2020, Bank of Finland Institute for Emerging Economies (BOFIT).
    2. Risfandy, Tastaftiyan & Tarazi, Amine & Trinugroho, Irwan, 2022. "Competition in dual markets: Implications for banking system stability," Global Finance Journal, Elsevier, vol. 52(C).
    3. Akisik, Orhan & Gal, Graham, 2023. "IFRS, financial development and income inequality: An empirical study using mediation analysis," Economic Systems, Elsevier, vol. 47(2).
    4. Ferry Syarifuddin, 2022. "Is Islamic Banks Better Than Conventional Banks In The Time Of Uncertainty?," Working Papers WP/06/2022, Bank Indonesia.
    5. Uddin, Md Akther, 2016. "Reemergence of Islamic Monetary Economics: A Review of Theory and Practice," MPRA Paper 72081, University Library of Munich, Germany.
    6. Bilgin, Mehmet Huseyin & Danisman, Gamze Ozturk & Demir, Ender & Tarazi, Amine, 2021. "Economic uncertainty and bank stability: Conventional vs. Islamic banking," Journal of Financial Stability, Elsevier, vol. 56(C).
    7. Noha Emara & Mahmoud Mohieldin, 2020. "Financial inclusion and extreme poverty in the MENA region: a gap analysis approach," Review of Economics and Political Science, Emerald Group Publishing Limited, vol. 5(3), pages 207-230, July.
    8. Haffejee, muhammad Ismail & Masih, Mansur, 2018. "Is the relationship between financial development and income inequality symmetric or asymmetric ? new evidence from South Africa based on NARDL," MPRA Paper 87574, University Library of Munich, Germany.
    9. Chrysovalantis Amountzias, 2024. "Income disparities and financial development: evidence from a panel firm-level analysis," Empirical Economics, Springer, vol. 66(1), pages 175-206, January.
    10. Liu, Dan & Jin, Yanhong & Pray, Carl & Liu, Shuang, 2020. "The Effects of Digital Inclusive Finance on Household Income and Income Inequality in China?," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304238, Agricultural and Applied Economics Association.
    11. Ayşe Aylin Bayar, 2023. "The impact of financial development on income inequality and poverty," PLOS ONE, Public Library of Science, vol. 18(10), pages 1-15, October.
    12. Muhammad Y. Khan & Shahab Ud Din & Majid J. Khan & Anam Javeed, 2021. "Dynamics of selecting Islamic home financing," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5005-5016, October.
    13. Ljerka Cerovic & Stella Suljic Nikolaj & Dario Maradin, 2017. "Comparative Analysis Of Conventional And Islamic Banking: Importance Of Market Regulation," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 26(1), pages 241-263, june.
    14. Edda Claus & Iris Claus, 2015. "SAVINGS AND WEALTH ACCUMULATION: MEASUREMENT, INFLUENCES AND INSTITUTIONS[The views ]," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 587-593, September.
    15. Lucke Bernd, 2024. "EU-Med Capital Market Integration and the EU’s Covered Bonds Directive," Review of Middle East Economics and Finance, De Gruyter, vol. 20(3), pages 267-298.
    16. Duqi, Andi & Jaafar, Aziz & Warsame, Mohammed H., 2020. "Payout policy and ownership structure: The case of Islamic and conventional banks," The British Accounting Review, Elsevier, vol. 52(1).
    17. Eric Fosu Oteng-Abayie & Kofi Amanor & Anthony Kofi Osei-Fosu, 2023. "Spatial analysis of the effect of microfinance on poverty and inequality in Ghana," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 25(1), pages 196-231, June.
    18. Prao Yao Séraphin & Kongoza Kouassi Cyrille, 2023. "Nonlinear Effect of Financial Development on Income Inequality: The Case of Ivory Coast," International Journal of Business and Management, Canadian Center of Science and Education, vol. 17(6), pages 1-57, February.
    19. Kok, Seng Kiong & Akwei, Cynthia & Giorgioni, Gianluigi & Farquhar, Stuart, 2022. "On the regulation of the intersection between religion and the provision of financial services: Conversations with market actors within the global Islamic financial services sector," Research in International Business and Finance, Elsevier, vol. 59(C).
    20. Matabaro Borauzima, Luc & Muller, Aline, 2023. "Bank risk-taking and competition in developing banking markets: Does efficiency level matter? Evidence from Africa," Emerging Markets Review, Elsevier, vol. 55(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:4:y:2020:i:8:p:438-443. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.