Islamic finance can foster social cohesion in Afghanistan

The attempts to offer conventional financial products in Afghanistan are perceived as yet another foreign attempt to challenge basic tenets of the Afghan society. This perception - shared not only in the countryside but also by sectors of urban society - is fuelling resentment and distrust among people. As a consequence, the already meager financing in the rural areas, where 75% of the population lives, is drying up and almost non-existent. This is undermining any meaningful economic and social take-off. Within this landscape, Islamic finance and takaful represent a necessary tool to address the population's discomfort with the conventional approach, ease cultural tensions and creatively mend social relations.