Craig M. Allen
Market Acceptance of a MurabahaBased Finance Structure within a Social Network of NonIslamic Small and Medium Enterprise Owners in African Procurement
441 - 446
2019
13
4
International Journal of Economics and Management Engineering
https://publications.waset.org/pdf/10010237
https://publications.waset.org/vol/148
World Academy of Science, Engineering and Technology
Twenty two African entrepreneurs with Small and
Medium Enterprises (SMEs) in a single social network centered
around a nonMuslim population in a smaller African country,
selected an Islamic financing structure, a form of Murabaha,
based solely on market rationale. These entrepreneurs had all won
procurement contracts from major purchasers of goods within their
country and faced difficulty arranging traditional bank financing
to support their supplychain needs. The Murabahabased structure
satisfied their marketdriven demand and provided an attractive
alternative to the traditional bankoffered lending products. The
Murabahastyled tradefinancing structure was not promoted with any
religious implications, but solely as a market solution to the existing
problems associated with bankrelated financing. This indicates the
strong market forces that draw SMEs to financing structures that are
traditionally considered within the framework of Islamic finance.
Open Science Index 148, 2019