ISLAMIC ASSET-BACKED FINANCING MODES AND GROWTH OF MANUFACTURING BUSINESSES IN MOGADISHU- SOMALIA
Abstract views: 15
/ 
PDF downloads: 4
DOI:
https://doi.org/10.5281/zenodo.16479164Keywords:
Islamic Asset-backed financing, Murabaha, Ijarah , Istisna, Growth of Manufacturing BusinessesAbstract
This study was carried out to examine the relationship between Islamic asset-backed financing modes and growth of the manufacturing businesses in Mogadishu, Somalia. It was conducted under three specific objectives namely; (i) to examine the relationship between Murabaha financing and growth of the manufacturing businesses in Mogadishu, Somalia, (ii) to examine the relationship between Ijarah financing and growth of the manufacturing businesses in Mogadishu, Somalia and (iii) to examine the relationship between Istisna financing and growth of the manufacturing businesses in Mogadishu, Somalia. The researcher adopted a correlational research design. Data was collected by use of closed ended questionnaires from 136 respondents who were selected out of a total population of 209 by use of a simple random sampling technique. Pearson’s correlation coefficients were used to establish the relationship between the study variables. The correlations revealed that; (i) there is a strong positive relationship between Murabaha financing and growth of the manufacturing businesses in Mogadishu (r = .744, Sig. value < 0.01), (ii) there is a strong positive relationship between Ijarah financing and growth of the manufacturing businesses in Mogadishu (r = .540, Sig. value < 0.01) and (iii) there is a strong positive relationship between Istisna financing and growth of the manufacturing businesses in Mogadishu (r = .719, Sig. value < 0.01). Consequently, the study concluded that provision of Islamic asset-backed financing modes can facilitate growth of the manufacturing businesses in Mogadishu. This implies that attention should be paid to Islamic asset-backed financing modes in efforts geared towards growth of the manufacturing businesses in Mogadishu.
References
Abdullahi, G. A. (2021). Lean supply management practices and performance of manufacturing businesses in Mogadishu Somalia. Research Report – University of Nairobi Kenya.
Adeinat, I., Al Rahahleh, N., & Bhatti, M. I. (2019). Customer satisfaction with Ijarah financing: The mediating role of clarity and accuracy for services offered. Qualitative Research in Financial Markets, 11(2), 227–243.
African Development Bank. (2021). East Africa Economic Outlook 2021. https://www.afdb.org/en/news-and-events/events/east-africa-economic-outlook-2021-46473
Aktepe, İ. E., & Dereci, M. (2019). İslam hukukunda akit teorisi ve katılım bankacılığında akitler, Yaşayan ve Gelişen Katılım Bankacılığı, Görmüş, Ş./Albayrak, R. A. (Ed.), İstanbul, TKBB.
Al Farisi, MZN, Hasbi, Cahyani, YT, & Kusbiantoro, S. (2021). Business Marketing Strategy Pp. Riyadlul Jannah Pacet Mojokerto Islamic Economics Perspective. Journal of Entrepreneurship Research, 4(2), 19.
Alzoubi, T. (2017), “Profitability of Islamic financing tools”, Banking and Finance Review, Vol. 9No. 1, pp. 75-83.
Ascarya. (2017). Monetary Policy Transmission Mechanism Under Dual Financial System In Indonesia; Interest-Profit Channel. International Journal of Economics, Management And Accounting, 22(1), 1-32.
Aslam, E., & Haron, R. (2021). Corporate governance and risk-taking of Islamic banks: evidence from OIC countries. Corporate Governance: The International Journal of Business in Society, 21(7), 1460–1474. https://doi.org/10.1108/CG-08-2020-0311
Babbie, E. (2007). The practice of social research. Belmont, CA: Thompson, Wadsworth Pp. 89.
Babbie, E., & Mouton, J. (2006). The practice of social research. New York: Oxford University Press.
Bhatti, M. (2015). Taxation treatment of Islamic finance products in Australia. Deakin Law Review, 20(2), 263- 298.
Bank Negara Malaysia (2015), Draft Shariah Parameter Reference 5: Istisna Contract RAFT (SPR5) [Online] available from: http://www.bnm.gov.my/guidelines/05_shariah/06_concept_paper_shariah_para_ref_5_draft.pdf [Accessed on 12 Dec 2023].
Canbaz, M. (2016). Katılım bankacılığı, First Edition, İstanbul: Beta
Central Bank of Somalia (2021). Quarterly Economic Review (2021Q1): Mogadishu – Somalia
Cooper, D. R., & Schindler, P.S. (2013). Business Research Methods. New York: McGraw Hill.
Creswell, J.W. (2014). Research design: Qualitative, quantitative and mixed method approaches, London: Sage.
Ehsan Wahla, A., Hasan, H., & Bhatti, M. I. (2018). Measures of customers’ perception of car Ijarah financing. Journal of Islamic Accounting and Business Research, 9(1), 2–16.
Ergün, T. (2022). The Relationship between Murabaha and Macroeconomic Dynamics. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi • Cilt: 44 • Sayı: 1 • Haziran 2022, ISSN: 2587-2672, ss/pp. 119-136
Global Islamic Finance Report (2016). Islamic Microfinance: From A Market Niche to A Growing Industry, London: Edbiz Consulting Limited.
Grandy, C. (1999). Through a Glass: An Economic View of Fairness, Globalization and States. In Dator, J., Pratt, D., & Seo, Y. (Eds.), Fairness, Globalization, and Public Institutions: East Asia and Beyond (pp. 49-60). Honolulu, HI: University of Hawai’i Press. https://doi.org/10.2307/j.ctv3zp081.9
Grossman, G., & Helpman, E. (1991). Innovation and Growth in the World Economy. Cambridge, MA: MIT Press.
Habib, S. F. (2018), “Istisna”, in: Habib, S. F. (Ed.), Fundamentals of Islamic Finance and Banking, pp. 155-168. https://doi.org/10.1002/9781119371076.ch9
Hasmawati, A. and Mohamad, A. (2019), “Potential application of Istisna’ financing in Malaysia”, Qualitative Research in Financial Markets, Vol. 11, No. 2, pp.211-226. https://doi.org/10.1108/QRFM-07-2018-0083
IFSB-Islamic Financial Services Board (2021). https://www.ifsb.org/sec03.php, (Accessed on 16.10.2023).
Intellecap (2022). Promoting a Resilient and Inclusive Private Sector in Fragile Contexts – Somalia, www.intellecap.com
International Labour Organization, ILO (2020). Sectoral Assessment of Women’s Entrepreneurship Development in the Agriculture and Renewable Energy Sectors in Somalia, ILO, Turin – Italy
Junankar, P. N. (2019). Monetary policy, growth and employment in developing areas: A review of the literature. IZA Discussion Paper No. 2197.
Kalim, R., & Arshed, N. (2023). Exploring Stability of Ijarah Financing Market in Full Fledged Islamic Banks. International Journal of Contemporary Economics and Administrative Sciences, 13(1), 22–46.
Kombo, D. K., & Tromp, D. L. (2011). Proposal and Thesis Writing; An Introduction. Nairobi: Paulines Publications, Africa.
Kothari, C. R. (2004). Research Methodology: Methods and Techniques. Mumbai: New Age
Krejcie, R., V. & Morgan, D., W. (1970). Determining The Sample Size For Research Activities. Education And Psychological Measurement, Vol. 30 Pp 607 - 610.
Lucas, R. E. (1988). On the Mechanics of Economic Development. Journal of Monetary Economics, 22, 3-42.
Mankiw, N., Romer, D., and Weil, D. (1992). A Contribution to the Empirics of Economic Growth. Quarterly Journal of Economics, 107, 407-437.
Mohamed, M. M., Isak, N. N., & Roble, D. H. (2019). Private Sector Developments in Somalia: Analysis on Some Major Sectors. International Journal of Economics, Commerce and Management. Vol. VII, Issue 12, December 2019
Musiita, B., et al., (2023). Productivity Factors and the Growth of the Manufacturing Sector among the East African Community Members States: Testing the Adequacy of the Endogenous Growth Hypothesis American Journal of Economies, Vol. 7, Issue 1, pp 33 – 52, 2023
Nasucha, M. N., Ahmed, R., & Barre, G. M. (2019). Examining the Viability of Istisna for Project Financing: An Economic Perspective. International Journal of Management and Applied Research, 2019, Vol. 6, No. 4
Nawaz, A. & Kundi, G. M. (2010). Demographic implications for the eLearning user perceptions in HEIs of NWFP, Pakistan. EJISDC. 41(5): 117.
Onyango, R. A., & Were, M. (2015). Determinants of Economic Growth in East African Community. International Journal of Economics, Commerce and Management, 3, 1183-1196.
Onyimadu, C.O. (2015). An Overview of Endogenous Growth Models: Theory and Critique. International Journal of Physical and Social Sciences, 5 (3),
Rahim, S. A., & Ahmad, N. (2015). Forecasting Volatility using Bootstrap MCEWMA Following Sukuk Ijarah Issuances. International Business Management, 9(4), 581–589.
Rahmani, A., & Avdukic, A. (2022). A Maqasid-ul-Shari’ah Analysis of the Permissible Futures Trading in Islamic Financial Markets. European Journal of Islamic Finance, 9(3), 1-13.
Rofiq, N., & Hasbi, M. Z. N. (2021). Implementasi Akad Bai` Bitsaman Ajil Pada BMT UGT (Usaha Gabungan Terpadu Sidogiri Cabang Pembantu Asembagus Situbondo) Perspektif Hukum Islam. Literasi Hukum, 5(2), 81–87.
Romer, P. (1986). Increasing Returns and Long Run Growth. Journal of Political Economy, 94 (2), pp.1002-1037
Sawang, S. (2019). Why middle-aged entrepreneurs are better than young ones. The Conversation. 2019 [cited 2018 SRC - BaiduScholar; Available from: http://theconversation.com/why-middle-agedentrepreneurs-are-better-than-young-ones-96297
UNIDO (2020). World Manufacturing Production - Statistics for Quarter II, 2019. UN Industrial Development Organization
World Bank (2023). Somalia Economic Update, Eighth Edition: Integrating Climate Change with Somalia’s Development: The Case for Water. The World Bank, 1818 H Street NW, Washington DC
Yurttadur, M., & Yıldız, İ. (2017). Faizsiz finans, First Edition, İstanbul: Beta.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Daha International University Academic Journal (DIUAJ)
This work is licensed under a Creative Commons Attribution 4.0 International License.
