Empowering energy access: the influence of Islamic banking and Fintech on sustainable energy in MENA

Purpose This study aims to examine the impact of financial inclusion through Islamic banking and fintech-driven digital financial services on sustainable energy access (SEA) in the Middle East and North African (MENA) region. Despite the region’s abundant energy resources, persistent challenges of energy poverty remain. This study explores how complementary financial mechanisms can address financing gaps in clean energy initiatives. Design/methodology/approach This study explores the influence of Islamic banking and fintech on energy poverty in the MENA region. Using the entropy weight approach, the authors uniquely construct composite SEA indices for individual MENA countries and ascertain how these SEAs are influenced by Islamic banking (FI1) and fintech-driven financial inclusion (FI2). Findings The findings reveal an average SEA value of 0.25, indicating that MENA countries face energy poverty. The analysis shows the influence of banking infrastructure and Islamic financial services on SEA in the Islamic MENA region, highlighting the complexity of the issue. From an aggregate view, both aspects of financial infrastructure improve SEA. The results show that unemployment, trade openness, urbanization and inflation significantly predict SEA. Originality/value The findings apply to the Islamic MENA region because of the larger sample of countries than the single-country studies primarily found in the relevant literature. The findings underscore the complementary roles of Islamic banking and fintech-based financial inclusion in addressing energy poverty, presenting essential implications for policymakers and governments in the MENA region.