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- Towards a Better Financial Inclusion in Maghreb Countries: Insights on the Role of Islamic Microfinance and Fintech
Towards a Better Financial Inclusion in Maghreb Countries: Insights on the Role of Islamic Microfinance and Fintech
Contrary to what might be assumed, dealing with people at the “bottom of the pyramid” provides tremendous business opportunities if the right approach to engage them profitably is followed. Through an innovative business model, Microfinance has been, to some extent, successful in addressing the needs of poor people in terms of financial services’ provision. Rooted in ethics, Islamic Finance has the legitimacy to lead the microfinance industry and to bring new perspectives into the economic empowerment of low-income populations in OIC countries. However, despite the abundant literature on the fit between sustainable development and Islamic Finance as well as some successful impact finance initiatives especially in South East Asia, the market has not yet seen the full potential of the Islamic Microfinance industry in driving socio-economic outcomes at scale for populations at the “bottom of the pyramid”. This is particularly true for Maghreb countries, where financial inclusion levels remain insufficient as compared to similar regions. This document focuses on financial inclusion’s current situation and challenges in Maghreb countries (Morocco, Algeria, and Tunisia) and how to leverage formal and informal mechanisms in this context. It specifically proposes practical strategies to revamp financial inclusion in the Maghreb from the Islamic microfinance perspective.