The Role of Islamic Banking Toward Promoting Human Development in Malaysia: What Can Nigeria Learn?

Abstract

The role of the Islamic banking industry in promoting human development is crucial. Stimulating human development in terms of education and health has been the aspiration of many nations globally. The main objective of this study is to explore the role of the Islamic banking system in stimulating human development in Malaysia, with a particular focus on education. The study could serve as a reflection for the Nigerian Islamic banking industry. The methodology engaged in the study is a qualitative approach. The instruments employed for the data collection are document and interview techniques. This study selects a sample of twelve (12) participants from five universities situated within the location of Kuala Lumpur, In addition to the two (2) Shari'ah advisory council members, two (2) participants were selected from each university. The contents documents were synthesized according to the demand of this study. The data were analyzed using a thematic and descriptive approach where themes and sub-themes emerged and presented the evidence from the participants accordingly. This study finds that the Islamic banking system positively stimulates human development in Malaysia through funding (Zakat funds, endowment funds, scholarships, etc.); staff training and development (seminars, workshops in service training, and in house training). The study further reveals that the system creates new knowledge in Islamic finance and banking, promotes human capital development, and establishes educational institutions that offer various courses for expertise and professional purposes.