Idea of Collateral and Guarantor in Islamic Bank Financing
Journal Title: SEISENSE Journal of Management - Year 2018, Vol 1, Issue 5
Abstract
This study explores the idea of Islamic banks requesting for collateral or guarantee when financing, the rationale for requesting loan security, and its acceptability from Islamic perspectives. The study reviewed the previous literature and Islamic injunctions to study and justify the use of collateral and guarantor to hedge the risk of financing default. It is found that Islamic banks l ike conventional banking system encourage requesting loan security to ensure borrowers’ commitment and protect investors’ wealth. Despite its effect on loan rejection, secured loans are found to be recovered more easily than unsecured loans. Government and Islamic banks are therefore advised to device mean for helping small - scale businesses to access financing, through credit guarantee schemes and participatory financing mechanisms, to enhance financial inclusion.
Authors and Affiliations
Idris Yahaya Adamu
Keywords
Related Articles
- EP ID EP39619
- DOI https://doi.org/10.5281/zenodo.1474664
- Views 254
- Downloads 0
Determinants of Adolescents Well Being
Well - being is a dynamic concept that includes subjective, social, and psychological dimensions as well as health - related behaviors. Adolescents form two - thirds of our population, this is a unique group of...
A Comparative Study of Banking Industry Based on Appraisal System, Rewards and Employee Performance
Purpose - This study was aimed to throw light on the appraisal and reward system, and its effects on job satisfaction and employee performance in the banking sector of Pakistan. Design/Methodology...
An Investigation of the Diversification Roles of Contractor
The construc tion sector is facing a period of change due to the uprising used of new technology and innovation, movement of the industry towards sustainable construction, emphasis on strategic alliances...
The Impact of Strategic Planning on Growth of Small Businesses in Nigeria.
Purpose - T here is a need to develop a framework that will improve the understandings of business planning and performance and its effects on growth particularly during the...
Peer effects, Financial Decisions and Industry Concentration
Purpose - This article reviews literature related to peer effects and different financial decisions. It further summarizes the theory and m otives that drive peer effects. Also, the study...