Islamic Banking and Finance: Acceptance and Implementation in Maldives

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Islamic Banking and Finance

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Introduction
This research paper gives an insight on the Islamic Financial system and how it can be
introduced in Maldives. Islamic Financial system has a lot of differences in its features from
the conventional financial system. Financial products which follow Islamic law is provided
by Islamic Finance. Islamic Financial system is generally described as an interest free
financial institute (Abbasi, Saeed, Ambreen & Yousaf, 2012). A unique feature which is
followed by the Islamic Financial Institution is the borrowing and lending of any financial
assets is not allowed for debt creation. Islamic Finance ensures that there exists a
proportionality between sharing of risk and profit (Wahab, Aziz, Abuzraida, Sanousi, Hinai
& Ibrahim, 2014).
Acceptance of Islamic Financial system in Maldives
According to a survey conducted by world bank the financial exclusion for religious reasons
is 7% (Er & Mutlu, 2017). Islamic Financial system can be easily implemented in Maldives
and the rate of acceptance can be increased among the population because 80% of the
population of Maldives are Muslim. To implement this financial system a proper
comprehensive plan has to be formulated so that its unique features gets highlighted among
the people. The comprehensive plan has to set up in such a way that the population of
Maldives can understand the difference between the conventional financial system and the
Islamic Financial system. Public can only think of accepting this system if they are properly
aware of the financial products that the Islamic Financial system is offering. So, now various
methods are discussed below through which the Islamic Financial system can be promoted in
Maldives
Advertisement and Campaign
A wide range of population across Maldives can be addressed through advertisement and
public campaign. The entire population of Maldives should be aware of the Financial

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products that the Islamic Financial systems consists of. This can only be done by providing
advertisement though various media. Advertisement is one of the useful process which can
address a wide range of population across the whole country. People around Maldives should
be familiar with various terms which are generally used in the Islamic Financial System.
Islamic Financial system use various names for their financial products like Al-Wadiah Yad
Dhamanah, Mudarabah, Murabah and many more. This terms are generally not understood
by Non-Muslim as well as Muslim population. So, public campaign should be conducted
where proper explanation of this financial product should be provided to the entire
population. They should understand the features that the financial products of the Islamic
Financial systems are offering (Razmi, Romle & Jumahat, 2017).
Educating the population
The population of Maldives should be well aware of the features of the financial product that
are being offered by various Islamic Finance Institutes. Financial advisors should educate the
entire population about the unique feature that they are offering. The Islamic Finance
institutes should educate the population of Maldives about the difference between the
conventional financial system and the Islamic Financial system. People should be aware of
the advantages of investing in Islamic Financial product. Knowledge should be developed
among the graduate students and the post graduate students should be aware of various
banking product because they will be more interested in various banking product in the future
(Razmi, Romle & Jumahat, 2017).
Increase and involvement of expert persons
More expert financial advisors should be included so that they can give a proper advice to the
entire population of Maldives regarding the financial products that are being offered by the
various Islamic Financial institutions. Expert financial advisors will help to increase the
confident of various customers to engage themselves in the products and services offered by