Role of Islamic Banking in Promoting Financial Inclusion among Muslim Populations in Sokoto State

Islamic banking principles, which prohibit interest-based transactions, offer an alternative financial services pathway for the significant proportion of the Nigerian Muslim population that avoids conventional banking on religious grounds. This study examines the role of Islamic banking in promoting financial inclusion among Muslim populations in Sokoto State, North West Nigeria. A survey research design was adopted, and data were collected from 320 respondents drawn from urban and peri-urban communities in Sokoto, Wamakko, and Dange-Shuni Local Government Areas. Financial inclusion was measured by formal account ownership, awareness of Islamic banking products, and participation in murabaha, musharakah, and mudarabah financing arrangements. Chi-square tests and binary logistic regression were used for analysis. Results showed that 42% of the respondents who had previously avoided conventional banking reported having opened an Islamic banking account after the entry of Jaiz Bank into Sokoto State. Awareness of Islamic banking products was a significant predictor of formal financial inclusion (OR = 4.18, p < 0.01). Murabaha trade financing was the most utilised product, particularly among market traders. The study concludes that Islamic banking significantly extends the financial inclusion frontier among Muslim populations who are excluded from conventional banking in Sokoto State. It recommends regulatory support for expanding the branch network of non-interest banks in the North West geopolitical zone and public education on Islamic banking product offerings. Keywords: Islamic banking, financial inclusion, Muslim population, Sokoto State, non-interest banking