The Development of Islamic Finance: The Need for Islamic Financial Literacy

Dr. Hassan Shakeel

Abstract

With the rapid development of Islamic finance in the last four decades, there are many questions which arise and need to be solved because of the failure to meet the goal of Islamic Banking and Finance in relation with the conventional system. It could be because of the lack of Islamic financial literacy at the basic level which has to be considered seriously. Having a clear understanding about Islamic finance will develop confidence and build public trust in it. Consequently, the more people rely on the Sharīʿah-compliant business, the more they will come to invest their money in Islamic banks. It is argued that the Muslims in general are very committed to their religion. Islamic financial industry, therefore, can be widely developed through the spread of Islamic financial literacy. Multimedia can be used as one of the important tools for the issues under discussion. The governments, regulatory authorities and the management of the Islamic financial institutions have a significant role in the effort to build awareness of the Islamic financial system for the public in general. This paper aims to explore the importance of Islamic financial literacy and see how it can enhance the viability of Islamic financial institutions and develop the industry. Moreover, this paper also suggests how Islamic financial education can be effectively taught.