Work

Favoring the small and the plenty: Islamic banking for MSMEs

Year: 2022

Type: article

Abstract: While MSMEs form the backbone of many countries, most of them suffer from limited access to finance . We extend the literature by examining whether Islamic banks, compared to their conventional peers, favor more the MSMEs credit market segment in Turkey. We do this by considering various aspects of the lending behavior towards MSMEs (total lending, foreign currency lending, loan commitments, loan quality, and revenues) across different MSMEs size categories (micro, small and medium-sized firms). Our results show that once we control for bank-specific characteristics, we find that Islamic banks are more engaged with MSME financing and generate more revenues from servicing MSMEs. Concerning the quality of the MSME lending portfolio, no distinguishable patterns were observed between Islamic and conventional banks.

Source: Economic Systems

DOI: 10.1016/j.ecosys.2022.101051

Authors: Mustafa Disli, Ahmet F. Aysan, Omneya Abdelsalam

Institutions: Hamad bin Khalifa University, Qatar Foundation, Durham University

Language: English

Topic: Islamic Finance and Banking Studies

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $1,540