Testing the ability of Islamic finance to enhance financial inclusion: An econometric study of a sample of countries during the period 2017-2021

Abstract

The research paper aims to forecast the Islamic finance probability to increase the level of financial inclusion in a sample of Organization of Islamic Cooperation countries (OIC) during the period 2017-2021, based on cross-sectional time series analysis (Panel), by estimating a
probabilistic model to examine Islamic finance opportunities with its various components to raise levels of financial inclusion. The results of the study revealed that levels of financial inclusion tend to rise with an increase in Islamic financing in general. It appears that an increase in both the size
of Islamic assets, Islamic financial development, and the issuance of sukuks by one unit increases the probability of the dependent variable reaching the value 1, which corresponds to an increase in the level of inclusion to a higher value. Thus, it represents an effective means of raising the level of financial inclusion. While it has been proven that there are no opportunities to raise it by increasing the number of Islamic banks and the takaful ratio