All Theses and Dissertations


Master of Science in Islamic Banking & Finance


Department of Economics

Date of Award

Spring 2020


Dr. Heman Das Lohano

Committee Member 1

Dr. Heman Das Lohano, Institute of Business Administration, Karachi

Project Type


Access Type

Restricted Access

Document Version



ix, 42


Growth and Development, Financial economics


Islamic banking has emerged as an alternative to conventional banking in recent years. The industry is fast expanding, with various benefits theoretically associated with the Islamic way of banking. The objective of this study is to evaluate the impact of Islamic banking on financial inclusion and economic growth globally thus far. The study analyses panel data from 2013 to 2018 for fourteen countries where Islamic banking is operational. It adopts a Simultaneous Equations Model (SEM) approach to analyse the effect of Islamic banking, using the two-stage least squares (TSLS) estimation method. The study finds that Islamic banking has a significant impact on economic growth at the 1 per cent level. Furthermore, Islamic banking also has a positive effect on financial inclusion, although, this impact is statistically significant only at the 10 per cent level. Based on these findings, various policy measures have been recommended to stimulate economic growth and financial inclusion in the developing world.

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