Journal of Economic, Finance Research and Review (JEFRR)

Fair Credit Decision Assurance: An Ethical Governance Framework For AI-Based Credit Scoring in Bangladesh with Islamic Finance Duties

Keya, Sumaia Yasmin, Sultana, Niger, Hasan, Md. Baharul, Alamm, Md. Shahed, Islam, Md. Aminul, Sumaiya, Ummey

15 October 2026 · Vol. 2, Issue 10, pp. 693-704

DOI: 10.65150/EP-jefrr/V2E10/2026-02

Abstract

Purpose: Machine-learning credit scoring can extend formal credit to people with thin files, but alternative data can also turn social disadvantage into apparently neutral risk scores. This paper develops a governance framework for AI-based credit scoring in Bangladesh and adapts it to the duties of Islamic financial institutions. Design/methodology/approach: The study is a structured integrative review combined with policy and doctrinal analysis. It synthesizes peer-reviewed research on algorithmic lending, fairness and explainability; international benchmarks (the EU AI Act, U.S. adverse action guidance, the NIST AI Risk Management Framework and the OECD AI Principles); Bangladeshi instruments on e-KYC, credit information, digital nano-loans, e-loans and data protection; and Islamic finance sources on maqasid al-Shariah, gharar and Shariah governance. Findings: Bangladesh now permits fully digital small-value lending, yet its current instruments say little about model validation, bias testing, reason-giving or contestation. Predictive accuracy alone is an inadequate standard because a model can improve portfolio performance while concentrating false rejections on women, rural applicants or new-to-credit borrowers. Originality/value: The paper proposes a Fair Credit Decision Assurance (FCDA) model with six gates: lawful data, feature relevance, fairness testing, explanation, human reconsideration and monitoring. A Shariah overlay adds product-level review and treats unexplained adverse decisions as a governance concern related to gharar. Practical implications: The model gives banks, finance companies, mobile financial service providers and Bangladesh Bank a staged route to supervising algorithmic credit without halting innovation.

Keywords: AI credit scoring, algorithmic fairness, explainability, financial inclusion, Islamic finance, maqasid al-Shariah, Bangladesh

Read the full text on Journal of Economic, Finance Research and Review →The full peer-reviewed article and PDF are hosted on the journal's site (the version of record).

Keya, Sumaia Yasmin, Sultana, Niger, Hasan, Md. Baharul, Alamm, Md. Shahed, Islam, Md. Aminul, Sumaiya, & Ummey (2026). Fair Credit Decision Assurance: An Ethical Governance Framework For AI-Based Credit Scoring in Bangladesh with Islamic Finance Duties. Journal of Economic, Finance Research and Review, 2(10), 693-704. https://doi.org/10.65150/EP-jefrr/V2E10/2026-02

@article{Keya2026,
  title   = {Fair Credit Decision Assurance: An Ethical Governance Framework For AI-Based Credit Scoring in Bangladesh with Islamic Finance Duties},
  author  = {Keya and Sumaia Yasmin and Sultana and Niger and Hasan and Md. Baharul and Alamm and Md. Shahed and Islam and Md. Aminul and Sumaiya and Ummey},
  journal = {Journal of Economic, Finance Research and Review},
  year    = {2026},
  volume  = {2},
  number  = {10},
  pages   = {693-704},
  doi     = {10.65150/EP-jefrr/V2E10/2026-02},
  url     = {https://doi.org/10.65150/EP-jefrr/V2E10/2026-02}
}

← Back to all articles