The Role of Islamic Banks in Funding Small Enterprises: A Case Study Targeting the Jordanian Islamic Bank

Abstract

The present study aimed to explore the role of Islamic banks in funding small enterprises in Jordan. A questionnaire was used for collecting data. The sample consists from 100 individuals. Those individuals are customers of the branches of the Jordanian Islamic bank located in Amman. Those individuals also own enterprises. It was found that the customers of the Jordanian Islamic bank who own enterprises have positive attitudes towards Murabaha-based funding. It was found that the customers of the Jordanian Islamic bank who own enterprises have positive attitudes towards Musharaka-based funding. It was found that the customers of the Jordanian Islamic bank who own enterprises have positive attitudes towards the funding provided for small and medium enterprises. The following hypothesis was rejected: (H0: The role of Islamic banks doesn’t have any statistically significant impact –at the statistical significance level of α ≥ 0.5- on funding small enterprises in Jordan).Several recommendations were suggested. For instance, the researcher recommends funding small enterprises by Islamic banks. He recommends enforcing terms that are more concessional on the granting loans to the owners of small enterprises.

Keywords: Islamic banks, funding of small enterprises, Islamic funding

DOI: 10.7176/JEP/11-26-12

Publication date:September 30^th 2020