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Edited by Dr Masudul Alam Choudhury
1. Introduction
Attacking persistent poverty and overcoming low levels of social and economic development of Muslims worldwide are the greatest challenges in facing the global development community as the world has already moved into the new millennium. Despite progress during the last three decades, witnessing a revolution in providing finance for alleviating poverty across the globe, the battle is far from won. Consequently, the issue of financial inclusion has emerged as a policy concerns primarily to ensure provision of credit to small and medium enterprises that are normally denied access to credit mainstream financial institution and market. The emerging microfinance revolution with appropriate designed financial products and services enable the poor to expand and diversify their economic activities, increase their incomes and improve their social well-being ([14] Bennett and Cuevas, 1996; [37] Ledgerwood, 1999).
The concern over poverty reduction via microfinance initiative is also of relevance to Islamic banks. As business entity established within the ambit of Shariah (Islamic law), Islamic banks are expected to be guided by an Islamic economic objectives, among others, to ensure that wealth is fairly circulated among as many hands as possible without causing any harm to those who acquired it lawfully (Ibn Ashur, 2006). Indeed, Islamic banking industry is one of the fastest growing industries, having posted double-digit annual growth rates for almost 30 years ([33] Iqbal and Molyneux, 2005). What started as a small rural banking experiment in the remote villages of Egypt in the early 1970s, has now reached a level where many mega-international banks worldwide offering Islamic banking products. While the estimates about the exact magnitude of the Islamic banking market vary, one can safely assume that it presently exceeds US$150 billion and is poised for further growth ([33] Iqbal and Molyneux, 2005).
With such an impressive growth of Islamic banking over the last 30 years, this paper argues that it is time for the industry to be reoriented to emphasize on issues relating to social and economic ends of financial transactions, rather than overemphasizing on making profits and meeting the bottom line alone. Islamic banks should endeavour to be the epicentre in the financial business galaxy of promoting financial inclusive by engaging with community banking and microfinance programme.
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