Persistence of Islamic banks in promoting debt-oriented financing methods: a scrutiny

Sadique, Muhammad Abdurrahman (2023) Persistence of Islamic banks in promoting debt-oriented financing methods: a scrutiny. In: 4th Kuala Lumpur International Conference on Social Sciences, Education and Engineering (KLISEE2023), 30 December 2023, Kuala Lumpur.

Preview	PDF Download (98kB) | Preview
	PDF - Published Version Restricted to Repository staff only Download (574kB) | Request a copy

Abstract

Despite of certain advantages as could be perceived in the equity mode, the conventional system of banking and finance is seen to be founded on debt financing with the interest-based loan as its primary building block, equity financing usually being the last resort. The conventional system has refused to share in the risk of the ventures financed in any manner, sufficing with the risk-free gain through interest income. More surprisingly, adoption of equity financing modes by Islamic banks themselves is noted to be less common than the use of debt-financing modes. The latter usually involve various adaptations of mark-up schemes, and are employed for the most part in short-term financing. Although Islamic banks are allowed to invest in businesses directly in addition to financing third party enterprises, in actual fact, direct investment by Islamic banks is not seen to have flourished due to a variety of factors, not the least among them being the identity inherited from the conventional industry as mere financial intermediaries, and legal impediments resultant of this identity. The current paper seeks to discuss the above issues also exploring root causes and possible solutions.

Item Type:	Proceeding Paper (Plenary Papers)
Uncontrolled Keywords:	debt, financing, Islamic, equity, banking
Subjects:	BPH Islamic Economics BPH Islamic Economics > BPH72 Economic development. Growth. Sustainable development. Sustainability BPH Islamic Economics > BPH754.4 Murabahah - Cost-Plus Financing
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Ahmad Ibrahim Kulliyyah of Laws Ahmad Ibrahim Kulliyyah of Laws > Department of Islamic Law
Depositing User:	Dr Muhammad Abdurrahman Sadique
Date Deposited:	29 Jan 2024 12:04
Last Modified:	29 Jan 2024 12:05
URI:	http://irep.iium.edu.my/id/eprint/110569

Actions (login required)

View Item