The role of micro <i>Takaful</i> industry for the achievement of Islamic financial inclusion in Pakistan

Abstract

Financial inclusion is the provision of financial services at reasonable and affordable cost. Takaful is the Islamic form of insurance which is designed as per Sharia'h principles. Micro Takaful provides financial protection to blue-collared, low-income and under-privileged individuals. It provides financial security against property, health, disability and life. Pakistan is a Muslim country where interest-based financial system is switching towards Islamic. Currently, five Takaful companies are operating in Pakistan which is providing general Takaful and life Takaful services including micro Takaful on a very small scale. It includes financial coverage of low-cost houses, student's healthcare in government schools, financial protection of factory workers and crops-Takaful. Findings of the study reveal that micro Takaful industry is at the beginning stage in the country and Takaful companies must increase the span of their micro Takaful services because it has very important and key role in the achievement of Islamic financial inclusion in Pakistan.