EN
Why Do Bank Finance Clients Prefer Mark-up to Profit Loss Sharing Principles? Evidence from Islamic Rural Banks and Small to Medium Enterprises in Indonesia
Abstract
This study examines the preferences of Islamic rural banks clients in choosing Islamic financial contracts to finance their business. Mixed method, combining quantitative and qualitative approaches, was adopted in this study. Quantitative data was gathered from the Indonesian Financial Service Authority to examine the preferences of Small to Medium Enterprises (SMEs) in utilizing types of Islamic financial contracts. Qualitative data was collected by interviewing Islamic Rural Bank (BPRS) managers to investigate the reasons for choices of types of Islamic financing contracts. The finding shows that people prefer to use contracts under mark-up principles rather than Profit Loss Sharing (PLS) principles. Simplicity of the contracts was the main reason for choosing mark-up contracts. This trend affects the growth of mudaraba and musharaka contracts, and ultimately the growth of Islamic banks.
Keywords
Details
Primary Language
English
Subjects
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Journal Section
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Publication Date
September 1, 2016
Submission Date
September 1, 2016
Acceptance Date
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Published in Issue
Year 2016 Volume: 6 Number: 4
APA
Imronudin, -, & Hussain, J. G. (2016). Why Do Bank Finance Clients Prefer Mark-up to Profit Loss Sharing Principles? Evidence from Islamic Rural Banks and Small to Medium Enterprises in Indonesia. International Journal of Economics and Financial Issues, 6(4), 1407-1412. https://izlik.org/JA97YW95CN
AMA
1.Imronudin, Hussain JG. Why Do Bank Finance Clients Prefer Mark-up to Profit Loss Sharing Principles? Evidence from Islamic Rural Banks and Small to Medium Enterprises in Indonesia. IJEFI. 2016;6(4):1407-1412. https://izlik.org/JA97YW95CN
Chicago
Imronudin, -, and Javed Ghulam Hussain. 2016. “Why Do Bank Finance Clients Prefer Mark-up to Profit Loss Sharing Principles? Evidence from Islamic Rural Banks and Small to Medium Enterprises in Indonesia”. International Journal of Economics and Financial Issues 6 (4): 1407-12. https://izlik.org/JA97YW95CN.
EndNote
Imronudin -, Hussain JG (September 1, 2016) Why Do Bank Finance Clients Prefer Mark-up to Profit Loss Sharing Principles? Evidence from Islamic Rural Banks and Small to Medium Enterprises in Indonesia. International Journal of Economics and Financial Issues 6 4 1407–1412.
IEEE
[1]- Imronudin and J. G. Hussain, “Why Do Bank Finance Clients Prefer Mark-up to Profit Loss Sharing Principles? Evidence from Islamic Rural Banks and Small to Medium Enterprises in Indonesia”, IJEFI, vol. 6, no. 4, pp. 1407–1412, Sept. 2016, [Online]. Available: https://izlik.org/JA97YW95CN
ISNAD
Imronudin, - - Hussain, Javed Ghulam. “Why Do Bank Finance Clients Prefer Mark-up to Profit Loss Sharing Principles? Evidence from Islamic Rural Banks and Small to Medium Enterprises in Indonesia”. International Journal of Economics and Financial Issues 6/4 (September 1, 2016): 1407-1412. https://izlik.org/JA97YW95CN.
JAMA
1.Imronudin -, Hussain JG. Why Do Bank Finance Clients Prefer Mark-up to Profit Loss Sharing Principles? Evidence from Islamic Rural Banks and Small to Medium Enterprises in Indonesia. IJEFI. 2016;6:1407–1412.
MLA
Imronudin, -, and Javed Ghulam Hussain. “Why Do Bank Finance Clients Prefer Mark-up to Profit Loss Sharing Principles? Evidence from Islamic Rural Banks and Small to Medium Enterprises in Indonesia”. International Journal of Economics and Financial Issues, vol. 6, no. 4, Sept. 2016, pp. 1407-12, https://izlik.org/JA97YW95CN.
Vancouver
1.- Imronudin, Javed Ghulam Hussain. Why Do Bank Finance Clients Prefer Mark-up to Profit Loss Sharing Principles? Evidence from Islamic Rural Banks and Small to Medium Enterprises in Indonesia. IJEFI [Internet]. 2016 Sep. 1;6(4):1407-12. Available from: https://izlik.org/JA97YW95CN