KUWAIT CITY: The head of the International Monetary Fund says Islamic finance offers the possibility of extending banking services to many who are underserved in the Muslim world.

Christine Lagarde, the IMF’s managing director, told an audience in Kuwait City that only a quarter of Muslim adults have access to a bank account.

Lagarde said on Wednesday that “Islamic finance has the potential to contribute to higher and more inclusive economic growth by increasing access of banking services to underserved populations.

“Lagarde took no questions at the end of her speech. In an interview published Tuesday with the Kuwaiti daily newspaper Al-Qabas, she said Kuwait should consider imposing taxes on commercial profits and address the massive subsidies the oil-rich tiny country offers its citizens in the wake of low global oil prices.

Financial inclusion rising: Dar

Pakistan is using multipronged strategies to enhance financial inclusion, Finance Minister Ishaq Dar said in a panel discussion along with Deputy Prime Minister and Minister of Finance of Kuwait Anas Al Saleh, Governor Saudi Arabian Monetary Agency Dr Fahad Abdullah Al-Mubarak, Governor Central Bank of Turkey Dr Erdem Basci, President IDB Dr Ahmad Mohammad Ali Al-Madani and others.

“Many developing and Muslim majority countries are faced with the challenge of low financial access with significant proportion of their population remaining unbanked due to voluntary and involuntary reasons, Dar said.

“Specifically in Muslim majority countries, it is highly likely that a significant proportion of their population may be self-excluded due to limited supply of Shariah-compliant financial products and services.”

Therefore, promotion of Islamic financial services can play an important role in minimising the incidence of both voluntary and involuntary financial exclusion by catering to the unserved segments, he added.

Published in Dawn, November 12th, 2015

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