Financial Inclusion and Islamic Finance: A Survey of Islamic Financial Literacy Index

Year 2017, Volume: 3 Issue: 2, 0 - 0, 01.07.2017

Bünyamin Er , Mesut Mutlu

https://doi.org/10.25272/j.2149-8407.2017.3.2.02

Abstract

According to the Worldbank, the rate of financial
exclusion due to religious reasons, which is 7% in the
world, is 9.7% in the group of D-8 countries. Islamic banks
or participation banks in Turkey appear to be the most
important interface for increasing the tendency of
individuals with religious sensitivity for financial inclusion
by rendering services like deposit banks in accordance with
religious principles for such persons. It's very important
that we know the İslamic financial literacy level of
individuals with religious sensitivity for the purpose of
increasing their financial inclusion. However, a tool for
measuring Islamic financial literacy level has not been
generated yet.
In this study, an Islamic financial literacy survey was
generated and with results of this survey İslamic financial
literacy index was studied for revealing the current status
with the purpose of increasing the level of Islamic financial
literacy. To that end, 3 separate sub-indexes were
generated along with the general index of Islamic financial
literacy. As a result of the study, general index of Islamic
financial literacy was calculated as 58%

Keywords

Financial inclusion, Islamic financial literacy, Islamic banks

References

• Abdul Hamid, Abdul Halim, and Norizaton Azmin Mohd Nordin (2001), “A Study on Islamic Banking Education and Strategy For The Newmillenıum: Malaysian Experience”, International Journal of Islamic Financial Services, Vol.2, No.4, pp.3-11. Abdul Rahim, Siti Hafizah, Abdul Rashid, Rosemaliza and Ebu Bakar Hamed (2016), “Islamic Financial Literacy and It’s Determinants Among University Students: An Exploratory Factor Analysis”, International Journal of Economics and Financial Issues, Vol.6, No.S7, pp.32-35. Abdullah, Mohamad Azmi and Alex Anderson (2015), “Islamic Financial Literacy Among Bankers in Kuala Lumpur”, Journal of Emerging Economies and Islamic Research, Vol.3, No.2, pp.1-16. Adele, Atkinson and Flore-Anne Messy (2011), Assesing Financial Literacy in 12 Countries An OECD Pilot Exercise, Netspar Discussion Paper, OECD Financial Affairs Divison, Discussion Paper 01/2011-014. Ahmad, Norafifah and Sudin Haron (2002), “Perceptions of Malaysian Corporate Customers Towards Islamic Banking Products & Services”, International Journal of Islamic Financial Services, Vol.3, No.4, pp.13-29. Antara, Purnomo M., Musa, Rosidah and Faridah Hassan (2016), “Bridging Islamic Financial Literacy and Halal Literacy: The Way Forward in Halal Ecosystem”, Procedia Economics and Finance, Vol.37, pp.196- 202. Beckmann, Elisabeth (2013), “Financial Literacy and Household Savings in Romania”, Advancing Education in Quantitative Lİteracy, Vol.6, No.2, pp.216-222. Behrman, Jere R., Mitchell, Olivia S., Soo, Cindy K. and David Bravo (2012), “How Financial Literacy Affects Household Wealth Accumulation”, American Economic Review, Vol.102, No.3, pp.300-304. Bley, Jorg and Kermit Kuehn (2004), “Conventional Versus Islamic Fınance: Student Knowledge and Perception in The United Arab Emirates”, International Journal of Islamic Financial Services, Vol.5, No.4, pp.1- 13.
• IJISEF
• International Journal of Islamic Economics and Finance Studies 53
• Er, Bünyamin, Mutlu, Mesut, ve Yunus E. Şahin (2015), Daha Bilgili, Daha Doğru: İslami Finans Okuryazarlığı Üzerine Bir Araştırma, International Congress on Islamic Economics and Finance, 21-23 October 2015, Sakarya/Turkey. Gerrard, Philip, and Barton J. Cunningham (1997), “Islamic Banking: A Study in Singapore”, International Journal of Bank Marketing, Vol.15, No.6, pp.204-216. Grohmann, Aantonia and Lukas Menkhoff (2015), Scholl, Parents And Financial Literacy, Shape Future Fİnancial Behaviour. DIW Economic Bulletin, 407-412. Haron, Sudin, Ahmad, Norififah and Sandra L. Planisek (1994), “Bank Patronage Factors of Muslim and Non-Muslim Customers”, International Journal of Bank Marketing, Vol.12, No.1, pp.32-40. Hidajat, Taofik and Muliawan Hamdani (2016), Measuring Islamic Financial Literacy, The 2nd International Research Conference on Business and Economics. http://www.oecd.org/daf/fin/financial-education/OECD-INFE- International-Survey-of-Adult-FInancial-Literacy- Competencies.pdf [06.09.2015] https://www.teb.com.tr/document/finansal-okuryazarlik-ve-erisim- endeksi.pdf [19.07.2015] Jorgensen, Bryce and Savla Jyoti, (2010), “Financial Literacy of Young Adults: The Importance of Parental Socialization”, Family Relationship, Vol.59, No.4, pp.465-478. Kılıç, Yunus, Ata, Ali H. ve İbrahim H. Seyrek (2015), “Finansal Okuryazarlık: Üniversite Öğrencilerine Yönelik Bir Araştırma”, Muhasebe ve Finansman Dergisi, 2015 Nisan, ss.129-150. Lusardi, Annamaria and Olivia S. Mitchell (2006), “Financial Literacy and Planning: Implications for Retirement Wellbeing”, DNB Working Paper, Working Paper No. 78/2005. Metawa, Saad A. and Mohammed Almossawi (1998), “Banking Behavior of Islamic Bank Customers: Perspectives and Implications”, International Journal of Bank Marketing, Vol.16, No.7, pp.299-313. Naser, Kamal, Jamal, Ahmad and Khalid Al-Katib (1999), “Islamic Banking: A Study of Customer Satisfaction and Preferences in Jordan”, International Journal of Bank Marketing, Vol.17, No.3, pp.135-151. Mundell, Robert A. (1968), International Economics, New York: Macmillan. Sardiana, Anna (2016), “The Impact of Literacy To Shariah Financial Service Preferences”, Etikonomi, Vol.15, No.1, pp.43-62. Tom, Tinsy R. and Nishanth Stephen (2015), “The Role of Cooperative Banks in Financial Inclusion”, The IUP Journal of Bank Manageent, Vol.14, No.3, pp.55-65. Van Rooij, Maarten, Lusardi, Annamaria and Rob J. Alessie (2011), “Financial Literacy, Retirement Planning”, and Household Wealth, NBER Working Paper, No: 17339. WorldBank (2007), Finance For All? Policies and Pitfalls ın Expanding Access, World Bank Policy Research Report, http://siteresources.worldbank.org/INTFINFORALL/Resources/ 4099583-1194373512632/ FFA_book.pdf [22.07.2015] WorldBank (2014), The Global Fındex Database, Measuring Financial Inclusion Around the World, http://www.worldbank.org/en/programs/globalfindex