Journal of Business and Social Development Volume 9 Number 2, September 2021: 25-38 eISSN: 2600-9668 © Penerbit UMT Journal of Business and Social Development Volume 9 Number 2, September 2021 : 25-38 Introduction While there are various defnitions of fnancial inclusion, this paper describes it in simple terms as an individual’s access to and use of basic fnancial services. Financial inclusion has become a global agenda and policy priority in many countries (Sarma & Pais, 2011). It has been identifed as one of the drivers of economic growth and plays a critical role in reducing poverty (Abubakar, Daneji, Muhammed & Chekene, 2020). Furthermore, fnancial inclusion enables individuals to manage their daily expenditure and invest in their future, while access to credit facilities provide an opportunity for businesses to grow and create various job opportunities (International Monetary Fund, 2016). FINANCIAL INCLUSION INDEX: THE CASE OF COUNTRIES WITH PRESENCE OF ISLAMIC FINANCE NUR AMIRAH BORHAN * AND SAADIAH MOHAMAD Center for Postgraduate and Professional Studies, Faculty of Business and Management, Universiti Teknologi MARA, 40450 Shah Alam, Selangor, Malaysia. *Corresponding author: nuramirahborhan@yahoo.com Submitted fnal draft: 2 June 2021 Accepted: 14 July 2021 http://doi.org/10.46754/jbsd.2021.09.002 Generally, the global community has made signifcant progress in recent years to enhance the level of fnancial inclusion. The 2017 Global Findex Database reported that 69% of adults now own an account at formal fnancial institutions, an increase from 51% in 2011. In addition, the share of adults reported as having formally saved rose from 23% in 2011 to 27% in 2014. Furthermore, 54% of the adults globally are now able to come up with emergency funds. These statistics shows that improving access and use of fnancial services shall empower the people to improve their lives (Demirguc-Kunt et al., 2018). While remarkable progress has been made, fnancial inclusion remains a major challenge in many countries, particularly among developing economies (MIFC, 2014). Worldwide 1.7 billion adults are still without a formal bank account Abstract: An established measure of fnancial inclusion has still not been found and the link between Islamic fnance and fnancial inclusion has yet to be established. This paper aims to fll the gap in the discourse on Islamic fnance by examining the level of fnancial inclusion in 44 countries in which Islamic fnance has an established presence. A multidimensional Financial Inclusion Index (FII) is constructed, which incorporates four indicators (ATMs, branches, deposits and loans) covering the period from 2013 to 2019. The results show that the average level of fnancial inclusion in these countries is low but with signifcant variation between countries. Muslim countries in general have lower levels of fnancial inclusion than the non-Muslim countries. However, some Muslim countries have managed to achieve medium level of fnancial inclusion by leveraging on Islamic fnance, particularly Islamic fnancial technology (fntech). While the index is easy to compute, the sample is relatively small and the study is unable to include indicators of new fntech channels due to data constraints. Despite this caveat, the fndings of this study provide a bigger case for policymakers to further develop and promote Islamic fnance as a means to improve fnancial inclusion, especially in Muslim countries. Further research in this area is recommended. Keywords: Islamic fnance, fnancial inclusion, fnancial inclusion index, fntech, sustainable development goals.