INTEREST-FREE LOAN AS A MEANS OF FINANCIAL INCLUSION AND SOCIALINTEGRATION: AN ISLAMIC PERSPECTIVE

Abstract

Obviously, the sustainability and development of human beings are contingent upon material
resources, thus individuals of any given society are in need of one another to achieve their financial
and social goals respectively. Undoubtedly, human societies are largely constituted by the less
privileged and venerable persons that needed to be catered for. Therefore, Islam places a great
emphasis on distributive justice and social equity, and as such, relevant provisions are put in place to
ensure that people are financially included and socially integrated. Significantly, interest-free loan
within the ambit of Islamic ethics, is a vital instrument for achieving financial inclusion and social
integration. Hence, none of the members of the society would be impartially left out. It is against this
background that the study attempts to examine the role of interest-free loan in promoting financial
inclusion and social integration in Islam. To achieve this, the paper adopts an analytical method of
research to analyze the Islamic perspective of loan contracts and how it has maximized it in solving
financial and social challenges. The work stresses the significance of loans in turning around
people's economic fortunes and fulfilling their social engagements. The paper concludes that
individuals should imbibe and explore the advantage of interest-free loan to immensely strengthen
the financial and social activities. To this end, the paper recommends the employment of interest-free
loan as entrenched in Islam to enhance financial inclusion and social integration.