Islamic Banking and Finance: Promoting Inclusive Development Through Sustainable Practices and Trade Facilitation

Abstract

This study examines the role of Islamic banking and finance in promoting inclusive development through sustainable practices and trade facilitation. Employing a qualitative research approach, the study analyzes academic literature, case studies, and industry reports to explore how Shariah-compliant banking principles such as risk-sharing, ethical investments, and prohibition of riba (interest) are operationalized to support economic participation and equitable growth. Key findings indicate that Islamic financial institutions enhance access to finance for underserved populations, foster ethical trade practices, and contribute to sustainable development objectives. Challenges, including regulatory inconsistencies, limited awareness of Shariah-compliant instruments, and gaps in digital adoption, are identified as constraints to maximizing impact. The study concludes that integrating sustainable and ethical practices within Islamic banking strengthens financial inclusion, supports trade facilitation, and promotes long-term economic resilience, while future research should focus on empirical assessments and digital innovation in Shariah-compliant finance.