The Impact of Capital Structure on the Credit Policy of Islamic Banks in Syria
Year: 2026
Type: article
Abstract: Amidst the complex economic challenges facing the Syrian economy—including prolonged conflict, sanctions, and currency collapse—there is a growing need for financing models that are both flexible and effective in risk management. This study aims to analyze the impact of capital structure, represented by paid-up capital, reserves, and shareholders’ equity, on the credit policy of Syrian Islamic banks listed on the Damascus Securities Exchange, with a particular focus on Islamic credit instruments such as mudarabah and musharakah. The research adopts a descriptive-analytical methodology and tests its hypotheses using various regression models (linear, sigmoid, cubic, compound, and power), drawing on financial data spanning the years 2014 to 2023. Findings reveal a statistically significant effect of capital structure on credit policy, with variations in impact depending on the chosen performance indicator (deferred sale receivables or assets under investment/liquidation). The statistical models also indicate that reserves and equity play a complex role in shaping credit policy through profit distribution strategies and the retention of provisions aimed at enhancing financial stability. The study recommends expanding the use of profit-and-loss sharing instruments, relying on long-term deposits and sukuk to finance productive projects, and promoting waqf-based mechanisms to support socio-developmental activities—positioning Islamic finance as a strategic pillar in mitigating the systemic repercussions of Syria’s economic crises.
Institution: Al Wataniya Private University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7203585656