How does the World Bank support Islamic finance?

The World Bank supports Islamic finance primarily by developing frameworks and promoting financial inclusion within this sector. This involvement involves not just facilitating the growth of Islamic finance products and services but also ensuring that they are accessible to a wider population, including those who may not have traditionally accessed banking services.

By fostering an environment conducive to Islamic finance, the World Bank aims to align economic development with the principles of Sharia law, which emphasizes ethical investment and financial practices. This effort contributes to the global financial ecosystem, encouraging both economic growth and social responsibility.

In contrast, while the World Bank may engage in activities related to issuing Islamic bonds or creating Sharia-compliant investment funds, its primary role has been more focused on promoting and developing the overall infrastructure and framework necessary for Islamic finance to thrive, rather than directly participating as an issuer or fund manager. Regulation of Islamic financial institutions typically falls within the purview of national regulatory bodies rather than the World Bank itself.