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Islamic Finance: A Catalyst for Shared Prosperity?

Under  a  joint  initiative  of  the  Islamic  Development  Bank  Group  and  the World  Bank  Group,  the  inaugural  Global  Report on Islamic Finance has  been  prepared with a focus on the widening disparity of global wealth and how Islamic finance can  help  in  enhancing  shared  prosperity.

This  Report  is  timely,  as  world  leaders  have  adopted  the  2030  Agenda  for  Sustainable Development, which includes a set of Sustainable Development Goals (SDGs) to end poverty, fight inequality and injustice, and tackle climate  change  by  2030.  The  Islamic  Development Bank Group, in its 2016–25 Strategic Plan, gives priority to inclusive and sustainable socioeconomic development among member countries within its role in advancing Islamic finance globally.

Besides imposing social and environmental costs, severe inequality adversely affects economic growth and wealth creation. The question that needs to be addressed is how to minimize the disparity in wealth and enhance shared prosperity. Given its potential role in economic development, Islamic finance can contribute toward achieving these objectives.

The Global Report provides a comprehensive overview of the existing status of various Islamic finance sectors and identifies major challenges hindering the growth of Islamic finance. It also identifies policy interventions and tools for policymakers to leverage the principles of Islamic finance in an effort to eradicate extreme poverty and work toward a more equitable distribution of wealth. The main message of the Report is that Islamic finance, built on a foundation of social and economic justice, can contribute to shared prosperity through the principles of inclusive participation and risk sharing.

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