IMPACT ANALYSIS OF ISLAMIC FINANCE ON FINANCIAL INCLUSION AND ECONOMIC GROWTH IN SELECTED MUSLIM COUNTRIES: LESSONS FOR NIGERIA

This study makes an impact analysis of Islamic Finance (IF) on economic growth and financial inclusion in selected Muslim countries, designated as the nine core markets of IF. This is in view of the prominence and enabling environment IF enjoys in the sampled countries. The core markets of investigation are: Saudi Arabia, Malaysia, UAE, Kuwait, Qatar, Turkey, Indonesia, Bahrain, and Pakistan. This study draws lessons from the experiences of the sampled countries on how Nigeria, with her enormous resources, can efficiently utilize Islamic Banking and Finance (IBF) for financial inclusion and economic growth. In this connection, the study adopts Simultaneous Equations Model (SEM) approach with panel data from 2011 to 2014. Basically, the major findings indicate that positive and significant impacts exist between IF and economic growth. Also, financial inclusion is positively impacted upon by IF but not significant. This study therefore recommends that governments of the sampled countries should continue to strengthen the growth of IF for more developmental opportunities and gains, especially for more inclusive economic growth. The Nigerian government should provide concrete supports to IBF operations through a robust institutional framework and enduring political backing. This is to also enable Nigeria benefit from IBF, especially in economic growth and financial inclusion, which are germane to economic growth and developmentof developing economies and the sampled countries, which are known as the nine core markets of IF.