Islamic Finance and Sustainable Economic Development: Exploring the Role of Shariah-Compliant Financial Systems in Promoting Inclusive Growth
DOI:
https://doi.org/10.63544/ijss.v5i3.285Keywords:
Economic Development, Ethical Finance, Financial Inclusion, Inclusive Growth, Islamic Finance, Sustainable DevelopmentAbstract
Islamic finance emerged as a rapidly growing ethical financial system that supported sustainable economic development and inclusive growth through Shariah-compliant principles. This study examined the role of Islamic finance in promoting financial inclusion, economic stability, and sustainable development outcomes. A quantitative descriptive design was applied, and primary data was collected from a sample of 300 respondents working in Islamic banking and financial institutions. The findings showed high mean values for Islamic finance practices (4.18 ± 0.62), sustainable economic development (4.12 ± 0.65), inclusive economic growth (4.05 ± 0.68), financial inclusion (4.20 ± 0.60), and ethical investment practices (4.10 ± 0.66). The results indicated that Islamic finance significantly contributed to SME development (4.22 ± 0.61), poverty reduction (4.14 ± 0.63), infrastructure financing (4.16 ± 0.64), and alignment with Sustainable Development Goals (4.23 ± 0.58). The study also found strong perceptions regarding economic stability (4.19 ± 0.60) and social welfare enhancement (4.21 ± 0.59), highlighting the broader developmental impact of Islamic financial systems. Islamic finance demonstrated a strong role in promoting equitable income distribution, financial access, and sustainable investment practices. The study concluded that Shariah-compliant financial systems functioned as a viable framework for achieving inclusive and sustainable economic development, particularly in emerging economies where financial exclusion remained a key challenge.
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Copyright (c) 2026 Muhammad Ali, Sarah Abro, Awais Ahmed Awan, Saeed Ahmed
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