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Core Islamic Finance Markets (S&P Expectations for 2020 and 2021)

Core Islamic Finance Markets (S&P Expectations for 2020 and 2021)

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This research aimed at examining the Islamic banking and finance responses to the emerging financial needs of MSMEs in country cases studies (Indonesia, Jordan, Kuwait, Senegal and Russia). Considering that emergence of the Islamic economics movement focused on constituting Islamic development process (Chapra, 1993, 2000; Ahmad, 1979, 1994; Naqvi,...

Contexts in source publication

Context 1
... apart from the uncertainties and economic slowdown, the decrease in oil prices negatively impacted most oil producer jurisdictions offering Islamic finance (IsDB, 2020). Therefore, while the size of Islamic finance assets is expected to shrink significantly in 2020, particularly in the key jurisdictions ( Figure 5), recovery can be seen in the sector in 2021 due to liquidity injected by the governments and central banks through expansionary fiscal and monetary policies. However, the determinant of this recovery's size will depend on the extent to which the global pandemic can be controlled with vaccines and other mechanisms. ...
Context 2
... the participants requested to express their opinions on the ways they considered Islamic banks facilitated MSMEs' expectations under the emerging conditions. For this, they were provided with a number of options, and the results are reported in Figure 15. ...
Context 3
... results show that some Islamic banks in certain jurisdictions opted for providing 'good financing'. As shown in Figure 15, about 16 percent of the participants observed Islamic banks in their jurisdictions facilitating the financial needs of MSMEs through 'qard al-hassan', and around 18 percent of the participants observed the 'use of zakat funds to alleviate the financial difficulties of MSMEs'. It is also important to note that about 10 percent of the participants observed that Islamic banks in their resident country 'allocated a larger share of portfolio for the financing of MSMEs', which shows proactivity on the side of Islamic banks despite being a very small percentage. ...
Context 4
... shown in Figure 45, the declining trend from 2019 is further visible in 2020, with the economic growth rate declining to the 2017 level, which is due to the COVID-19 impact as a result of the lockdown of the country. The new low in the economy is similar to the global economy. ...
Context 5
... Source: IFSB Database Figure 50 depicts the trends in the financing contracts used by Islamic banks in Kuwait, which can provide an indication of the financing extended to SMEs. As can be seen, the available financing is mainly debt-based mudarabah, and musharakah is hardly visible as musharakah is about 0 percent and mudarabah is around 0.3 percent in the entire Islamic financing options. ...
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... furthering the analysis, the distribution of the financing extended by Islamic banks is examined in relation to the economic sectors, which can provide an understanding of SMEs financing. Figure 51 depicts the trends in sectorial financing by Islamic banks. ...
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... can be seen in Figure 51, the household and the real estate sector gets the lion's share from ...
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... structure COVID-19 has hit Senegal hard like almost every other world economy, plunging a once growing and stable economy into recession. As shown in Figure 52, After an increase of about 6.4% in 2018 and 4.8% in 2019, economic growth contracted by 0.7% in 2020 due to the closure of Senegalese borders and containment of populations. However, the economic recovery indications have been seen, as Senegal's real GDP rose by 0.9% in the first quarter of 2021 (National Agency for Statistics and Demography, ANDS). ...
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... terms of comparing the impact of two different crises, as can be seen from Figure 52, due to the 2008 Global Financial Crisis, economic growth declined to 2.8% in 2009 from 3.7% in 2008. However, the economy experienced another decline in its economic growth rate in 2011 with 1.3%. ...
Context 10
... the economy experienced another decline in its economic growth rate in 2011 with 1.3%. However, as shown in Figure 52, the adverse impact of COVID-19 on economic growth has been more than the one led by the 2008 financial crisis. ...
Context 11
... 2021 due to a capital increase, the market share of BIS may be evaluated around 5% as they have become the third largest bank in Senegal in assets. As regards to the performance of Islamic banking, Table 32 and Figure 55, ...
Context 12
... Source: IFSB Database As can be seen in Figure 55 and Table 32, the performance of Islamic banking has been stable but in all the measures a slight decreasing trend is observed. This decreasing trend seems to have continued in 2020 which is the COVID-19's first year. ...
Context 13
... eight districts, there are 85 federal subjects, including two internationally not recognized territories, Sevastopol and the Republic of Crimea. The Russian Federation includes these two subjects in their statistics under the Southern Federal District (Figure 57). ...
Context 14
... some regions include companies from economically different sectors, some regions have a small number of SMEs. A similar situation is observed in the federal republics, where Muslims live in the majority (Figure 58). In the Volga Federal Region, which ranks second in terms of the total number of SMEs, there are two Muslim-majority republics: Tatarstan and Bashkortostan. ...
Context 15
... are 15,078 SMEs in the Republic of Adygea, which is located in the Southern Federal Region. On the other hand, as shown in the Figure 58, individual entrepreneurs and micro-enterprises constitute the majority of the SME segments in all mentioned republics. The number of small and medium-sized companies is very small. ...
Context 16
... Kalimullina (2020) Although Islamic finance is huge potential in Russia, this is not realized yet, and the development level of the sector is in infancy level. Kalimullina (2020) indicates that the size of the sector's total assets has significantly increased in recent years and reached 5,179 million RUB ( Figure 59). According to her latest estimate, while the number of employees of Islamic finance institutions in Russia is at least 150, the total number of clients is around 40,000. ...

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