Publication:
Potentials of musyarakah as a financing mechanism for SMES in Malaysia

dc.contributor.affiliation#PLACEHOLDER_PARENT_METADATA_VALUE#en_US
dc.contributor.authorNur Hasnida binti Abd. Rahmanen_US
dc.date.accessioned2024-10-08T05:16:03Z
dc.date.available2024-10-08T05:16:03Z
dc.date.issued2017
dc.description.abstractSmall and medium enterprise (SMEs) has been recognised as an important component that contributes towards the economic growth of many countries around the world. Despite its importance, SMEs have limited access to external financing, which is dominated by debt financing. They have difficulties in fulfilling debt requirements, particularly in (i) providing collateral (ii) coping with high interest or profit payment and (iii) adapting to credit rationing. Such limitations hamper their growth and expansion and therefore they are in need for an alternative financing that is more accessible by them. This study examines the viability of Musyarakah as an alternative financing for SMEs. For this purpose, three main features of Musyarakah financing, namely banks’ participation in SMEs business operations, risk-sharing and profit and loss sharing were identified as potential instruments in assisting SMEs to have better access to financing. Moreover, three moderating factors, namely expertise, incentive-compatible contract and mutual trust, were identified to have potential in strengthening the effect of the main features of Musyarakah financing towards SMEs access to financing. A Musyarakah financing mechanism for SMEs is developed on the basis of these main features of Musyarakah and its moderating factors. Subsequently, the financing mechanism is further validated from both the supply and demand sides using a mixed-method approach. A quantitative method via a survey questionnaire was conducted on SMEs firms to validate the Musyarakah financing mechanism from the demand side. The results were analysed using structural equation modelling and the findings revealed that the Musyarakah financing mechanism is valid and has potential in providing SMEs with better access to financing. Concurrently, semi-structured interviews were conducted to obtain the bankers’ views of the said mechanism. The result of these interviews, note that the mechanism is acceptable and has potential in assisting SMEs to have better access to financing. These findings from both the demand and supply side suggest that Musyarakah financing is a viable alternative for SMEs. Greater access to financing will facilitate SMEs` growth and development which in turn, contributes to the economic growth of the country. Thus, financial institutions are proposed to give foremost attention to the development and offering of Musyarakah financing for SMEs.en_US
dc.description.callnumbert BPH 322.3 N87 2017en_US
dc.description.degreelevelDoctoral
dc.description.identifierThesis : Potentials of musyarakah as a financing mechanism for SMES in Malaysia /by Nur Hasnida binti Abd. Rahmanen_US
dc.description.identityt11100361395NurHasnidaen_US
dc.description.kulliyahIIUM Institute of Islamic Banking and Financeen_US
dc.description.notesThesis (Ph.D)--International Islamic University Malaysia, 2017.en_US
dc.description.physicaldescriptionxvi, 221 leaves :illustrations ; 30cm.en_US
dc.description.programmeDoctor of Philosophy in Islamic Banking and Financeen_US
dc.identifier.urihttps://studentrepo.iium.edu.my/handle/123456789/8172
dc.language.isoenen_US
dc.publisherKuala Lumpur :Institute of Islamic Banking and Finance, International Islamic University Malaysia, 2017en_US
dc.rightsCopyright International Islamic University Malaysia
dc.subject.icsiMusharakahen_US
dc.subject.lcshSmall business -- Malaysiaen_US
dc.subject.lcshBanks and banking -- Religious aspects -- Islamen_US
dc.titlePotentials of musyarakah as a financing mechanism for SMES in Malaysiaen_US
dc.typeDoctoral Thesisen_US
dspace.entity.typePublication

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