Islamic Financing and Business Framework: A Survey
European Journal of Social Sciences, Vol. 15, No. 4, 2010
18 Pages Posted: 12 Nov 2009 Last revised: 23 Nov 2011
Date Written: November 10, 2009
This study is conducted to evaluate suitability of existing business environment in Pakistan for application of sharia based financing. Opinion survey of finance professionals, Islamic Bankers, entrepreneurs and academicians is conducted through questionnaire. Findings suggest number of hurdles including dominance of conventional banking, earnings manipulation by firms, higher taxes, weaker auditing, lack of trust and confidence in the abilities of Musharaka partners, riskiness of Musharaka and inability of conventional financial reporting framework to ensure transparency, are in the way of popularity of Musharaka financing. Increased awareness, new products development, capacity building of IFIs, reforms in financial reporting framework and strengthening audit institution, might be helpful in implementation of Musharaka financing.
Keywords: Musharaka, sharia based, sharia compliant, earnings manipulation, financial reporting
JEL Classification: R11, G15, G21
Suggested Citation: Suggested Citation