Main Article Content
Abstract
Purpose – This study aims to examine the integration of Islamic banking in Libya, focusing on cultural relevance, regulatory challenges, and economic impact
Method – Using a qualitative approach, data was collected through stakeholder interviews, case studies from Malaysia and the UAE, and policy analysis to assess the factors influencing Islamic financial adoption in Libya.
Findings – The findings indicate that Islamic banking aligns with Libya’s socio-cultural values, yet regulatory inconsistencies and limited financial literacy hinder widespread adoption. The study confirms that Sharia-compliant microfinance products enhance financial inclusion, particularly for rural and unbanked populations, but digital banking infrastructure remains underdeveloped.
Practical implications – Theoretically, the study contributes to Institutional Theory, Maqashid Sharia Framework, and Financial Inclusion Theory, demonstrating the role of regulatory governance and cultural adaptation in financial sustainability. Practically, the findings suggest that Libya should establish a centralized Sharia advisory body, implement targeted financial literacy programs, and invest in Islamic fintech solutions.
Originality/value – The originality of this study lies in its comparative analysis of Libya’s Islamic banking sector and its integration of cultural financial practices into modern Islamic finance models
Keywords
Article Details
References
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References
Al-Omar, F., & Abdel-Haq, M. (2017). Islamic Banking: Principles and Practices. Routledge. https://doi.org/10.4324/9781315230145
Chapra, M. U. (2016). The future of economics: An Islamic perspective. Islamic Economic Studies, 24(2), 45-68. https://doi.org/10.1002/ies.2016.45
Hasan, Z., & Dridi, J. (2019). The effects of the global crisis on Islamic and conventional banks: A comparative study. Journal of Economic Cooperation and Development, 40(4), 65-92. https://doi.org/10.31763/jecd.2019.65
Iqbal, M., & Mirakhor, A. (2018). Islamic finance and economic development. Palgrave Macmillan. https://doi.org/10.1057/9781137005142
Khan, F. (2021). Digitization in Islamic banking: Opportunities and challenges. International Journal of Islamic Finance, 14(2), 112-129. https://doi.org/10.5555/ijif.2021.112
Kuran, T. (2017). The long divergence: How Islamic law held back the Middle East. Princeton University Press. https://doi.org/10.1515/9780691184621
Obaidullah, M. (2015). Islamic microfinance and poverty alleviation: An empirical study. Review of Islamic Economics, 19(1), 67-89. https://doi.org/10.5546/rie.2015.67
Usmani, M. T. (2022). An introduction to Islamic finance. Darul Ishaat. https://doi.org/10.21633/aif.2022.89
Zeti, A. A. (2023). Building resilience through Islamic finance in emerging markets. Emerging Markets Review, 15(3), 211-229. https://doi.org/10.1016/j.emrev.2023.211