Libyan Business Firm Attitudes Towards Islamic Methods of Finance

16 Pages Posted: 30 Mar 2009

See all articles by Alsadek Gait

Alsadek Gait

affiliation not provided to SSRN

Andrew C. Worthington

Griffith University

Date Written: March 30, 2009


This paper investigates the attitudes of Libyan business firms towards Islamic methods of finance. A sample of 296 firms is surveyed using phone interviews during December 2007 and January 2008 to gather information on their awareness and perceptions of Islamic finance. The results indicate that most firms have knowledge about the existence of Islamic banking and finance, while more than two-thirds of respondents know the specific products of Musharakah (full-equity partnerships) and Quard Hassan (interest-free benevolent loans), often through personal informal lending. However, many respondents are uninformed regarding most other Islamic financing methods. Factor analysis is used to reduce the large number of explanatory variables used to determine business firm attitudes to just four determinants: namely, religion, profitability, business support, and unique services. Discriminant analysis shows that religion remains the primary motivation for the potential use of Islamic finance among business firms in Libya.

Keywords: Islamic methods of finance, Islamic banking, business attitudes and perceptions

JEL Classification: G21, L20, O16

Suggested Citation

Gait, Alsadek and Worthington, Andrew C., Libyan Business Firm Attitudes Towards Islamic Methods of Finance (March 30, 2009). Available at SSRN: or

Alsadek Gait

affiliation not provided to SSRN ( email )

Andrew C. Worthington (Contact Author)

Griffith University ( email )

170 Kessels Road
Nathan, Queensland 4111
+61 (0)7 3735 4273 (Phone)
+61 (0)7 3735 3719 (Fax)

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