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. 2024 Jul 25;10(15):e35164.
doi: 10.1016/j.heliyon.2024.e35164. eCollection 2024 Aug 15.

Unconventional banking and poverty reduction: A regression analysis with policy recommendations for Hail

Sulaiman Mohammed  1 , Saleh Saud Alsaif  1 , Attallah Alqataan  2 , Abdelhaleem Abdelhalee  3 , Moawia Farah  4
Affiliations

Unconventional banking and poverty reduction: A regression analysis with policy recommendations for Hail

Sulaiman Mohammed et al. Heliyon. .

Abstract

The present study addresses a significant omission in the literature by examining the role of non-traditional financial organizations in poverty reduction. Previous research has primarily focused on the direct impact of commercial banks on poverty, neglecting the contribution of other types of financial institutions. This research posited that Islamic banks are anticipated to assume a pivotal function in mitigating poverty; nonetheless, more studies on the topic need to be conducted. This research used the Partial Least Squares Regression technique to investigate the impact of Islamic banks on poverty alleviation in several developing nations from 2013 to 2019. The empirical data demonstrates a direct correlation between the overall assets of Islamic banks and some evident characteristics. The heightened acquisition of holdings by Islamic banks indicates a decrease in poverty. Furthermore, a statistically significant correlation exists between the legal framework and poverty alleviation. It is crucial to acknowledge that the research is limited by the intrinsic limits imposed by the accessible information on Islamic banks and the specific temporal limitations of the study. Future academic research should aim to increase the sample size and cultural and social factors and expand the time frame to understand the intricate function of Islamic banks in reducing poverty entirely. This paper is helpful to many policymakers in developing countries, including Hail development plans in Saudi Arabia.

Keywords: Bank performance; Competitive advantage; Economic growth; Financial development; GDP; Hail development; Legal origin; Poverty.

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Conflict of interest statement

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Figures

Fig. 1
Fig. 1
Islamic finance growth.
Fig. 2
Fig. 2
Stakeholder theory in banking, clients as one of the stakeholders.
Fig. 3
Fig. 3
Conceptual model of the study.
See this image and copyright information in PMC

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