Accessing the Synergy between Islamic Finance and Economic Development: A Systematic literature Review (2021–2024)
DOI:
https://doi.org/10.32350/ibfr.131.05Keywords:
economic development, financial inclusion, Islamic banking, Islamic finance,, meta-analysis, Shariah compliance, sustainable growthAbstract
Recent years have seen a rise in scholarly and policy interest in the connection between Islamic finance and economic development; yet, empirical results are still conflicting and context-dependent. In order to evaluate the overall influence of Islamic financing on economic development across various economies, this study does a meta-analytical evaluation of material produced between 2021 and 2024. This paper finds regional differences, methodological trends, and recurrent themes in the relationship between Islamic financing and growth by combining findings from theoretical and empirical research. The analysis shows that Islamic finance's profit-and-loss sharing, risk-sharing procedures, and ban on interest (riba) all have a favorable impact on social inclusion, financial stability, and economic growth. Research indicates that Islamic financial institutions also contribute to sustainable development by encouraging ethical investment, financial intermediation, and poverty reduction, especially through Islamic microfinance, zakat, and waqf. Financial market maturity, regulatory frameworks, and institutional quality all affect how strong and consistent these effects are. The results highlight the need for more uniform approaches in future studies and emphasize the necessity for further integrating Islamic finance into larger economic systems. All things considered, this article adds to the expanding conversation on the complementary role that Islamic finance plays in attaining sustainable and inclusive economic growth.
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