The World Bank on Thursday said less than 20 per cent of Muslims use conventional banking worldwide, in spite of the ever growing number of Islamic financial products.
The bank’s Vice President and Treasurer, Ms Arunma Oteh, made the remarks in Washington during the World Bank High Level Seminar on Islamic Finance.
She said that a survey done by the bank showed that there were approximately 1.6 billion Muslims in the world and that less than 20 per cent of the population used conventional banking worldwide.
Oteh added that in spite of the increase in the number of Islamic financial products, the huge financial gap that exist in the Muslim world could not be bridged.
She explained that “this statistics is scary but with the emergence of Islamic financial products, there is the tendency that many Muslims will access financial services of their choice.
“During the last fiscal year, the World Bank issued 63.5 billion dollars of bonds across different markets, 22 different currencies and some of them innovative from the developing countries around the world.
“Also, the World Bank manages about 170 billion dollars asset for 62 clients.”
The bank’s vice president said “sometimes, people may like to access financial services but they are unable to do so because of factors that are prohibitive to their faith.
“The lack of trust of financial service providers is another reason for the disparity.
“Islamic finance is a tool for achieving Sustainable Development Goals (SDGs) with Islamic investors applying the ethical and quantitative measures in their investment decisions.
“Islamic finance is uniquely well suited to promote infrastructure development which is critical in promoting many of the SDGs.”
Meanwhile, the Emir of Kano, Muhammadu Sanusi, had lamented that deficient infrastructure cost in Africa result in two per cent reduction in growth each year.
Speaking at the seminar, Sanusi, who was immediate past Govrnor of the Central Bank of Nigeria (CBN), said the growing Islamic financial products present strong potential in closing the huge infrastructure gap.
“There is the need to explore all alternatives in funding the SDGs.
“There is no doubt that large-scale financial resources is needed to mobilise and support the SDGs.
“The funding need is expected to go beyond the available public financial resources and will require the involvement of the private sector,” the Emir said.