Islamic Financing Effects on Small Medium Enterprises Competitiveness

Islamic financing has been identified as an alternative to conventional financial services. However, the extent to which the Islamic financing model could drive small and medium enterprises' (SMEs) competitiveness has been a significant concern in the existing literature. Hence, this study investigates the impact of Islamic financing on SMEs' competitiveness.Adopting the survey research design, the study investigated 400 SME owners/managers in the Southern part of Nigeria. The study employed the ordinary least square regression in the analysis of data. The result establishes that Islamic finance is a significant driver of SMEs' competitiveness. The results specifically reveal that Islamic finance is critical in driving product price, customer experience, and quality of products. The practical implication of Islamic finance may reduce its operational cost since it comes at a no-interest rate while giving room for more innovative prices and customer-centric products at competitive prices. SMEs are to leverage on the opportunities provided by Islamic finance for them to adopt sustainable business practices

Curbing Unemployment and Brain Drain Among Nigerian Youths Through Islamic Financing Instruments

The alarming increase in graduates/youths unemployment across the globe is disturbing. Graduates/youths unemployment that leads to brain drain is a complex problem facing developing countries, of which Nigeria is not spared. It is on this premise that necessitated the purpose of writing this paper is to ameliorate the issue of graduate/youth unemployment through the adoption of Islamic financing instruments as a solution to curb this high rate of graduates/youths unemployment in Nigeria. Going by the focus of this paper, Islamic financing instruments which have been seen to be under-utilized but if aggressively encouraged by the Nigerian government through easy access to funding by graduates/youths, which is a catalyst to entrepreneurship among graduates/youths to reduce unemployment that has been combating them and the nation at large. The method employed for this study is conceptual in nature. It reviewed previous literature whereby understanding the roles played by Islamic financing in curbing the menace of brain drain and unemployment among graduates/youth were gained. Based on the understanding of reviewed literature, this study has documented that Islamic finance instrument has played a significant role in SMEs. The study also found out that the impact of harnessing SMEs through Islamic finance instruments cannot be ignored in any society. Thus, it is suggested that the Nigerian government should embrace Islamic financing to reduce the population of graduates/youths who have recently, as a matter of no job, partake in ENDSARS protests and roaming the streets aimlessly across Nigeria. The implication of study on the Nigeria government and policymaker in term of adoption of Islamic finance instruments was to address the issues of SMEs in order to tame the menace on unemployment and brain drain, thereby retaining our graduate/youths to contribute their quotas through their skills/potentials for the betterment of the country.

Perceived Social Support as Moderator Variable Between the Attitude of Becoming A Social Entrepreneur (ATB) On Social Entrepreneurial Intention

This research is motivated by the development of the social entrepreneurship topic among students. This research focused on analyzing the antecedents of social entrepreneurial intention by involving attitudes towards becoming a social entrepreneur (ATB) and social support. A total of 208 students at Universitas Bung Hatta became respondents with the criteria of having taken lectures for at least two semesters. Moderated Regression Analysis (MRA) method was used to test the moderating hypothesis (perceived social support). This research shows that the higher the perceived social support perceived by students, the stronger the influence between ATB on social entrepreneurial intention. In this research, perceived social support plays a moderator role (purely moderated) in the relationship between ATB and social entrepreneurial intention. In addition, interesting findings of the moderating effect by gender where women have a higher moderating effect than men. One of the limitations of this research is that the sample was only within the scope of students. Hopefully, future researches can expand the scope of the sample, such as involving social entrepreneurs, so that the generalization of research results can be better. In addition, this research still has not linked several elements of context and factors, including culture, gender differences, personality characteristics, to the context of differences in developed and developing countries (local wisdom).

Prospects for Interest-Free Micro Finance in India: An Empirical Study

Despite the growth of Islamic banking and finance, in recent times due attention were given to the issue of Islamic microfinance. It is so because, as per various estimates over two billion people across globe are still living in a miserable poverty which is a global challenge and India not being an exception. Since the Poverty remains, a continuous challenge throughout the human history so as the efforts to overcome poverty. Among various efforts a conventional micro finance a “new model” received global recognition and a hope. But even if successful stories in bringing development and eradicating poverty by small credit tool to poor and by gaining growing attentions by world bank , still millennium development goal remains unachieved. The critics’ remains not only restricted to, in reaching all forms of poor rather high unbearable interest rates and avoidance by Muslims due to interest are on debate. As an alternative, Islamic finance has its operations both in Islamic and Non-Islamic countries along Islamic Micro finance. It is so because Islamic microfinance programs are complement to Islamic banking, both in ideological and in practical terms. Although IMF is still in infancy stage even though growing rapidly. Various experiments either on individual level or group level are mostly practicing Islamic micro credit products. But Islamic micro crediting has not been yet formally reached to people for India. Therefore this study aims to investigate the prospects based on determinants. The target population has been taken a potential benifacries of interest free micro finance. The paper adopts a Quantifiable approach as a Questionnaire distributed in paper format based on stratified sampling with 602 as final responses. The findings shows that in general the community is cognizant of the various terms used in Interest free microfinance but in respects of products/services existing by Islamic microfinance institutes, it indicates the level of awareness is very low.

Does Financing Structure Relates to Liquidity Risk? A Comparative Study of Islamic and Conventional Banks of Pakistan

The purpose of this paper is to find out whether financing in specific sectors increase bank liquidity risk and how this goes on with both Islamic and conventional banks. The paper used pooled regression, fixed effect model and random effect model decided on the basis of dummy joint significant test. The result shows that only financing concentration (SPEC) proved to have significant association with Islamic and overall banking sector for short run. And all other banks specific variables are unable to show a significant result. While the macroeconomic variable GDP and Inflation have a strong relationship in both long run and short run time period. This paper add value to the existing literature on liquidity risk under the new indicators issued by Basel III.

The Efficacy of Entrepreneurship Orientation on SMEs' Performance

Entrepreneurial Orientation is a key source of intangible value for organizations to sustain the competitive advantage through highlighting the new opportunities available in the business environment, exploiting them optimally and making them successful especially in a highly competitive business environment. EO has emerged as an area of research and EO impact studies have become a sub-field in Entrepreneurship Education research. The objectives of the study are to determine the effect of Organizational Culture on EO and also to examine the effect of Entrepreneurship Orientation (EO) on firm performance. The study population refers to the managers of SMEs that are registered with the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) in Lagos State. Analysis of variance (ANOVA), correlation efficient and regression analysis was adopted. The research found that organizational culture is EO driven. Entrepreneurial orientation can be supported through organizational culture hence; organizational culture may have the capability to influence SMEs performance and therefore can lead to enhancement in competitiveness. The study also found a positive relationship between EO and firm performance which can be interpreted by the fact that a high EO level in firms shows that the firm is highly innovative, proactive and capable of undertaking risky activities. The study recommends that Entrepreneurial Orientation should be encouraged in the SME sector by undertaking different policy measures, there by resulting in better performance. The firm’s performance can be leveraged to enhance organizational learning processes, creative performance, corporate performance, improved decision making processes and adaptation to a rapidly changing work environment.

Financing Supply of Islamic Banking During COVID-19 Outbreak in Indonesia

This study aims to analyze the factors that affect the financing supply of Islamic banking during pandemic COVID-19 outbreak in Indonesia. The variable of financial performances of Islamic banking such as Return on Assets (ROA), Capital Adequacy Ratio (CAR), Financing to Deposit Ratio (FDR) and Non-Performing Financing (NPF) are used as the independent variables. Meanwhile, the impact of COVID-19 pandemic is analyzed using dummy variable. Furthermore, each of the independent variables and the dummy variable are tested its influence to the dependent variable, namely the financing supply of Islamic banking by using a proxy of the total financing. Ordinary Least Square (OLS) with double log model used as a data analysis technique with the results of the study show that the variable of ROA has a positive but not significant effect to the financing supply. Variable CAR and FDR each shows a negative and not significant effect to the financing supply. Whereas, the variable of NPF shows a negative and significant effect to the financing supply. Meanwhile, COVID-19 pandemic contributes in giving a positive and significant difference effect to the financing supply than before the presence of COVID-19 in Indonesia. The results of this study prove that the phenomenon of credit crunch in Islamic banking relative can be addressed during pandemic COVID-19 outbreak in Indonesia.

Making Indonesia as Integrated Halal Zone and World Halal Sector Hub Through the Implementation of Halal Supply Chain

Halal supply chain management is one of the implementations that has been undertaken by several countries in the world, and even countries with a majority non-Muslim population. The halal sector in the world has developed quite rapidly. It has penetrated to all fields, one of which is Islamic banking and finance which has evolved quite well in helping the economy of a country. The research used in this research is descriptive qualitative research as an illustration in the Halal Supply Chain process that has been used by several states that have successfully implemented this system. Halal Supply Chain is a cycle that has been set by each country and has standards that guide the processing of a product, so it reaches the consumer. Indonesia is determined to become the centre of the halal world through the implementation of the halal supply chain in the form of Integrated Halal Zone (IHZ), IHZ is one of the functions to encourage the halal industry to develop and be able to compete with other countries quickly. Additionally, the Indonesian Ulema Council and the Ministry of Religion can easily oversee halal product standards from upstream to downstream. Hopefully the results of this research will contribute to the academic world and practitioners of Islamic economics.