The Importance of Islamic Financial Literacy for Muslims: A General Review

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Hossain Biplob Md Faruk Abdullah

Abstract

The rapid growth of the financial system is a factor central to the development of the global economy. Despite undergoing such growth, however, the global economy has experienced several financial crises, such as the US financial crisis in 2008 and the Asian financial crisis in 1997-1998. There are several reasons behind these crises. A common reason appears to be a lack of financial education and literacy. Due to poor financial education and literacy, people become over-spenders and fail to manage their debts, investments and savings. Hence, this paper discusses the importance of Islamic financial education and literacy for Muslims as a means of promoting awareness of Islamic financial guidance, including how this guidance ensures individual and social well-being. Several articles have been reviewed to construct the philosophy of this paper. Also, several verses from the Qur’an and related Hadiths are used as references of the shariah. It is expected that this study will encourage Muslims to become more literate in Islamic finance and observe Islamic financial behaviours.

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