Prof. Gatsi Advocates for Islamic Microfinance to Combat Poverty, Increase Financial Inclusion
Prof. John Gatsi has called for the integration of Islamic microfinance into Ghana’s financial landscape, arguing that it holds the key to poverty alleviation and women’s empowerment.
Delivering a keynote address at an International Conference hosted by Academic City University College in Accra, Prof Gatsi highlighted Islamic microfinance as a critical tool for global financial diversity, transcending its earlier focus on Muslim-majority nations like Indonesia, Pakistan, and Bangladesh.
According to Prof Gatsi, Islamic microfinance offers a solution to the financial instability caused by the collapse of over 347 microfinance institutions in Ghana, which has deepened poverty and stifled small business growth.
He stressed that the introduction of Islamic microfinance could provide the much-needed financial choice, particularly for women, and aid in the sustainable fight against poverty.
Prof Gatsi also pressed regulators to act swiftly in overseeing the nascent Islamic microfinance sector and Islamic fintech businesses, warning that delays in regulation could leave consumers vulnerable, noting that entrepreneurs would not wait for a “slow-paced regulator,” emphasizing the importance of regulatory frameworks in ensuring consumer protection.
Recognizing the global stature of Islamic banking, which has garnered support from institutions like the IMF and the World Bank, Prof Gatsi underscored the opportunity for Ghana to adopt Islamic finance. He pointed to its potential to drive inclusive growth and combat poverty, aligning with broader international efforts toward socioeconomic development.
Islamic banking, which prohibits interest and operates on profit-and-loss sharing principles, has seen significant global growth.
Between 2015 and 2021, Islamic financial assets expanded from $2.17 trillion to $4 trillion, with projections of $5.9 trillion by 2026, according to a report by the Islamic Corporation for the Development of Private Sector (ICD) and Refinitiv.
