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Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development
Abstract
In most countries, the main financing source for local governments for infrastructure projects comes from the central government’s budget. However, considering the growing urban population, this source will be insufficient to meet the likely increasing infrastructure expenditures in the future as it is now. Local governments must explore alternative financing methods, including accession to capital markets. Nevertheless, most local governments, especially the small and medium-sized ones, do not have access to capital markets, due to their low creditworthiness and insufficient technical and administrative capacity. For this reason, some supportive mechanisms to increase the creditworthiness of local governments within the scope of the conventional financial system have been developed in many countries. Aspired by the well-proven methods of the conventional financial system, this paper proposes some supportive financing mechanisms for local governments based on Islamic financial principles. These mechanisms could help local governments to access capital with higher creditworthiness and contribute to the development of Islamic capital markets. In order to lower the borrowing costs for local governments by giving them direct or indirect access to capital markets, this study suggests five possible Islamic financing methods. However, because to the novelty of the subject, it attempts to lay the groundwork for future research that will yield fresh perspectives on this issue.
Keywords
References
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Details
Primary Language
English
Subjects
Finance
Journal Section
Research Article
Authors
Publication Date
April 28, 2023
Submission Date
October 6, 2022
Acceptance Date
February 1, 2023
Published in Issue
Year 2023 Volume: 22 Number: 2
APA
Tekdoğan, Ö. F. (2023). Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development. Gaziantep Üniversitesi Sosyal Bilimler Dergisi, 22(2), 565-578. https://doi.org/10.21547/jss.1185404
AMA
1.Tekdoğan ÖF. Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development. GAUN-JSS. 2023;22(2):565-578. doi:10.21547/jss.1185404
Chicago
Tekdoğan, Ömer Faruk. 2023. “Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development”. Gaziantep Üniversitesi Sosyal Bilimler Dergisi 22 (2): 565-78. https://doi.org/10.21547/jss.1185404.
EndNote
Tekdoğan ÖF (April 1, 2023) Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development. Gaziantep Üniversitesi Sosyal Bilimler Dergisi 22 2 565–578.
IEEE
[1]Ö. F. Tekdoğan, “Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development”, GAUN-JSS, vol. 22, no. 2, pp. 565–578, Apr. 2023, doi: 10.21547/jss.1185404.
ISNAD
Tekdoğan, Ömer Faruk. “Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development”. Gaziantep Üniversitesi Sosyal Bilimler Dergisi 22/2 (April 1, 2023): 565-578. https://doi.org/10.21547/jss.1185404.
JAMA
1.Tekdoğan ÖF. Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development. GAUN-JSS. 2023;22:565–578.
MLA
Tekdoğan, Ömer Faruk. “Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development”. Gaziantep Üniversitesi Sosyal Bilimler Dergisi, vol. 22, no. 2, Apr. 2023, pp. 565-78, doi:10.21547/jss.1185404.
Vancouver
1.Ömer Faruk Tekdoğan. Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development. GAUN-JSS. 2023 Apr. 1;22(2):565-78. doi:10.21547/jss.1185404