M. N. Alam and N. B. Noor “Islamic banking financing to SME: a unique tool to develop different new work relations (Case study on Sudan, Kenya, Cyprus and Bangladesh)”
Islamic Banking Finance to the rural-based SME owners is gaining an enormous popularity in many developing nations of the world. The article demonstrates the result of an empirical study on how and to what extent the shariah-based Islamic financing to the rural-based SME owners in different countries contribute in promoting different network relationships between the lenders and borrowers and other related economic actors in a society. The study is mainly concerned with the financing of rural-based SMEs in Sudan, Kenya, Cyprus and Bangladesh by Islamic banks through their specific investment modes. “An Institutional-Network” theoretical approach is used to study this phenomenon. The article is consisting of different sections like, introduction, theoretical and methodological approaches, concepts of different networks, lending procedures used by Islamic banks while lending funds to rural-based SME owners under the Musharaka (partnership) and Bai Muajjal (Cost Plus Sale under Deferred payment)’ modes of investments, and the critical analysis with the end result derived from the study. The research methodology applied in the study is of a qualitative nature (Jick 1979, Merriam 1998, Sherman and Webb1988, Patton 1985). The study of lender-borrower network relationships between rural-based SME owners and Islamic banks was conducted through ‘in-depth’ interviews with respondents under review. A case study (Yin 1994) method was adopted as a research strategy in order to focus on contemporary phenomenon within the real-life context of different rural-based SCI owners under various SCI systems and their relationships with financing organizations within the Islamic financing systems.
Keywords: Small and Medium Industries (SMEs), Islamic Bank, Musharaka, Bai Muajjal, networks, institutions, lender borrower relationships, Sudan, Kenya, Cyprus, Bangladesh.