Access to Islamic Finance: A Case Study of Muslim Community Enterprises in Southernmost Provinces of Thailand

Abstract

Many advocates argue that access to finance is an important component of economic prosperity in a community. In Muslim communities, financial services must conform to the Islamic principles. In line with this, one may conclude that access to Islamic financial services in the southernmost provinces of Thailand may play a key role in the improvement of well-being of the Muslims in the area. This article investigates the access to Islamic financial services among Muslim community enterprises that was supported by an international development organization. A quantitative survey method was adopted using questionnaires as the tool for data collection. The data was descriptively analyzed. The findings in this study show that the members of Muslim community enterprises are aware of the existence of Islamic financial institutions and have general information about their services. They, however, do not have detailed information about these services. At the moment, they do not apply for any of the Islamic financial services because they do not need one. This is an important factor for voluntary financial exclusion. Furthermore, they are in the opinion that involuntary exclusion factors such as risk, discrimination, contractual information and product features do not contribute towards their unwillingness to use Islamic financial services. Hence, it may be concluded that the issue of access to finance among the Muslim community enterprises in the southernmost provinces of Thailand is a voluntary exclusion, and not supply-side factors as being evident in some other countries. It is recommended that other sources of Islamic finance such as zakat, waqf, sadaqah could be suitable financing sources for the community enterprises in the southernmost provinces of Thailand since these sources are available for improving the welfare of the poor who constitutes the majority of members of these enterprises.