Banks are defined as “institutions whose primary function is to accept deposits for use in banking operations, such as providing loans and advances, issuing and collecting cheques, trading in foreign currencies and precious metals, and the other credit operations.”
Banks are divided into two types, conventional banks and Islamic banks, and while both of these types of banks provide a wide range of banking services, the main difference between them is that Islamic banks take into account that their business does not involve anything contrary to the rules and regulations of Islamic Sharia, by relying on Sharia-compliance contracting forms such as murabahah, musharakah and mudarabah. To ensure that their actions comply with the rules and regulations of Islamic Sharia, they form Sharia supervisory bodies.
Financial inclusion means the ability of individuals and companies to access financial products and services such as payment, savings, credit, insurance and other services, at an affordable cost, to meet their needs in a responsible and sustainable manner.
In doing so, financial inclusion helps households and businesses, whether to plan for long-term goals, or address the unexpected emergencies. Financial services such as credit and insurance also help start up and expand businesses, invest in education or health, manage risks and overcome financial shocks, for better quality of people's lives.
Access to a bank account is the main pillar of financial inclusion because it allows bank account holders to hold money, and send/receive any cash amount. Therefore, financial inclusion is the gateway to the other financial services.
According to World Bank data, levels of financial inclusion in the State of Kuwait exceed the global average, as 72.9% of the population hold bank accounts, against a global average of 62%. However, Kuwait is still striving to achieve higher levels of financial inclusion.