Impact of Financing on Small and Medium Enterprises (SMEs) Profitability with Moderating Role of Islamic Finance
Abstract
Small and medium enterprises (SMEs) are the very significant for the development of economy of the country, grasp the attention of government and policy makers in developed as well as in developing countries. SMEs in Pakistan have their vital role in economic growth. Therefore, it is essential that SMEs have right to use sources of finance. The study used the quantitative approach that was accomplished by survey questionnaires. Two hundred SMEs and seventy bank branches were selected in Faisalabad region in Pakistan, to get response on questionnaires about their financing patterns and effects of Islamic financing as moderator in their fixed assets, set up and current assets financing. The study showed that fixed assets, set up and current asset financing have positive relation with the growth of SMEs and Islamic modes of financing was not behaved as moderator in Faisalabad city in Pakistan.
Downloads
References
Aggarwal, R. K. & Yousef, T. (2000). Islamic banks and investment financing. Journal of money, credit and banking, 93-120 292
Ahmed, A. (2010). Global financial crisis: an Islamic finance perspective. International Journal of Islamic and Middle Eastern Finance and Management, 3(4), 306-320.
Ahmed, S. (2009). Islamic banking finance and insurance A global overview. A.S. Noordeen.
Al-Disi, E. O. (2010). Developmental role for Waqf to support entrepreneurship and small and medium enterprises. Dubai International conference for Awqaf.
Al-jarhi, M. A. (2013). Gaps in the Theory and Practice of Islamic Economics. JKAU Islamic Econ., 26(1).
Al-Wugayan, A. & Alshimmiri, T. (2010). Encouragement of Entrepreneurship in Affluent Economies: The Case of Kuwait. International Business & Economics Research Journal (IBER), 9(6).
Ardic, O. P., Mylenko, N. & Saltane, V. (2011). Small and medium enterprises: a cross-country analysis with a new data set. World Bank Policy Research Working Paper Series.
Ayyagari, M., Beck, T. & Demirguc-Kunt, A. (2005). Small and medium enterprises across the globe. Small Business Economics, 29(4), 415-434.
Beaver, G. & Prince, C. (2004). Management, strategy and policy in the UK small business sector: a critical review. Journal of Small Business and Enterprise Development, 11(1), 34-49
Beck, T. & Demirgüç-Kunt, A. (2006). Small and medium-size enterprises: Access to finance as a growth constraint. J. Bank. Finance, 30(11), 2931–2943.
Beck, T., Demirgue, A. & Peri, M. S. M. (2011). Bank financing for SMEs: Evidence across countries and bank ownership types. Journal of Financial Services Research, 39(1-2), 35-54.
Bonds-Raacke, J. & Raacke, J. (2010). My Space and Facebook: Identifying dimensions of uses and gratifications for friend networking site. Individual Differences Research, 8(1), 27-33
Cowling, M., Liu, W. & Ledger, A. (2012). Small business financing in the UK before and during the current financial crisis. International Small Business Journal, 30(7), 778-800
Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests. Psychometrika, 16.
Dong, Y. & Men, C. (2014). SME Financing in Emerging Markets: Firm Characteristics, Banking Structure and Institutions. Emerging Markets Finance and Trade, 50(1), 120-149.
Emine, D. (2012). Financial Challenges that impede increasing the productivity of SMEs in the Arab region.
Ernst &Young. (2014). The World Islamic Competitiveness Report.2014-2015.
Gheeraert, L. (2014). Does Islamic finance spur banking sector development? Journal of Economic Behavior & Organization, 4(2).
Harvie, C. & Lee, B. C. (2002). East Asian SMEs: Contemporary Issues and Developments-An Overview. The role of SMEs in national economies in East Asia, 1-9.
Imam, P. A. & Kpodar, K. (2015). Is Islamic Banking Good for Growth? IMF Working Papers.
Islam, M. A., Yousuf, S. & Rahman, M. I. (2014). SME Financing in Bangladesh: A Comparative Analysis of Conventional and Islamic Banks. Journal of Islamic Banking and Finance, 2(1), 79-92.
Investigation of Banker’s Lending Criteria to SMEs and Assessment There off 297–334.
Karadag, H. (2015). Financial Management Challenges In Small And Medium-Sized Enterprises: A Strategic Management Approach. EMAJ: Emerging Markets Journal, 5(1), 26-40
Khan, M. M. & Bhatti, M. I. (2008). Islamic banking and finance: On its way to globalization. Managerial Finance, 34(10), 708-725.
La Rocca, M., La Rocca, T. & Cariola, A. (2011). Capital structure decisions during a firm's life cycle. Small Business Economics, 37(1), 107-130. Doi:10.1007/s11187-009-9229-z
Lazaridis, I. & Tryfonidis, D. (2006). Relationship between working capital management and profitability of listed companies in the Athens stock exchange. Journal of Financial Management and Analysis, 19(1), 26-35.
Mathuva, D. M. (2009). The Influence of working capital management components on corporate profitability: A survey on Kenyan Listed Firms. Research Journal of Business Management, 4(1), 1 – 11.
Mohammad, H. K. (2007). A Shari‘ah Analysis of Issues in Islamic Leasing. J.KAU: Islamic Econ., 20(1), 3-22
Mohammed, A. Q. (2015 a). Talent Attraction and Retention in Saudi Arabian Family Owned Small and Medium Scale Enterprises (SME’s). Journal of Business Management & Social Sciences Research, 4(2), 182-189.
Mohammed, A. Q. (2015 b). Employee recruitment, selection and retention in Saudi Arabian family owned Small and Medium Scale Enterprises (SMEs) Kuwait Chapter of Arabian. Journal of Business and Management Review, 4(6).
Muneer, S. & Rehman, S. U. (2012). Materialization of Behavioral Finance and Behavioral Portfolio Theory: A Brief Review. Journal of Economics and Behavioral Studies, 4(8), 431-435
Naceur, S. B., Barajas, A. & Massara, A. (2015). Can Islamic Banking Increase Financial Inclusion? No.15–81
Nurul, M. M. (2014). Issues and Prospects of Islamic Hire Purchase Financing: Malaysian Evidence. Journal of Management Research, 6(1).
OECD. (2006). Financing SMEs and Entrepreneurs 2006
Rocha, R. D. R., Farazi, S., Khouri, R. & Pearce, D. (2011). The status of bank lending to SMEs in the Middle East and North Africa region: The results of a joint survey of the Union of Arab Banks and the World Bank. World Bank Policy Research Working Paper Series.
Sadi, M. A. & Henderson, J. C. (2010). Franchising and small medium-sized enterprises (SMEs) in industrializing economies: A Saudi Arabian perspective. Journal of Management Development, 30(4), 402-412.
Shaban, M., Duygun, M., Anwar, M. & Akbar, B. (2014). Diversification and banks’ willingness to lend to small businesses: Evidence from Islamic and conventional banks in Indonesia.
Steijvers, T., Voordeckers, W. & Vanhoof, K. (2010).Collateral, relationship lending and family firms. Small Business Economics, 34(3), 243-259.
Vasilenko, L. & ArbaÄiauskas, V. (2012).Obstacles and drivers for sustainable innovation development and implementation in small and medium sized enterprises. Environmental Research, Engineering and Management, 60(2), 58-66.
Vatavu, S. (2012). Trade-off versus pecking order theory in listed companies around the world. Annals of the University of Petrosani Economics, 12(2), 285-292.
World Bank, Islamic Development Bank, Islamic Research and Training Institute, 2015d. Leveraging Islamic finance for SMEs. Joint WB-IDB Policy Report.
Zeitouni, I.Q. (2012). The role of Waqf in Funding Small project. Journal specialized in Waqf & Charitable Activities, Kuwait Waqf Public Foundation.
Zubair, A. K. I. (2014). Entrepreneurship and Economic Development in Nigeria: Evidence from Small and Medium Scale Enterprises (SMEs) Financing.
Copyright (c) 2017 Information Management and Business Review
This work is licensed under a Creative Commons Attribution 4.0 International License.
Author (s) should affirm that the material has not been published previously. It has not been submitted and it is not under consideration by any other journal. At the same time author (s) need to execute a publication permission agreement to assume the responsibility of the submitted content and any omissions and errors therein. After submission of revised paper in the light of suggestions of the reviewers, the editorial team edits and formats manuscripts to bring uniformity and standardization in published material.
This work will be licensed under Creative Commons Attribution 4.0 International (CC BY 4.0) and under condition of the license, users are free to read, copy, remix, transform, redistribute, download, print, search or link to the full texts of articles and even build upon their work as long as they credit the author for the original work. Moreover, as per journal policy author (s) hold and retain copyrights without any restrictions.
