Transnational Marketing Journal

ISSN: 2041-4684 | e-ISSN: 2041-4692

The Proposed Adoption of Islamic Banking and Finance in Jordan

Sonia Al Barghuthi
Harcharanjit Singh
Zaid Othman Dannoun
Nedaa Al Barghuthi
Keywords: Islamic Banking, Finance, SMEs, Knowledge awareness, cost-benefit, Business support, Reputation.

Abstract

Small & Medium Enterprises (SMEs) are commonly acknowledged as the economic drivers and the key contributors to gross domestic product (GDP) around the globe. These businesses create employment opportunities for both skilled and unskilled people. The growths of SME businesses are mainly dependent on lending or financing offered by commercial banks in the city. However, more and more business has been dwindling downwards due to exorbitant interest rates that have locked many companies. While most of these studies have been performed in Muslim and other nations (i.e., with regards to a country with a mainly Islamic finance framework and in a nation with a dual financial system), there are yet numerous nations where the Islamic financial system is at its inception phase, and techniques for introduction should be examined. The research aims to achieve the following objectives concerning Jordan SMEs and determine the influence of the factors (knowledge awareness, religious responsibilities, cost advantages, entrepreneurship support, repute, government support) of the inclination to follow the Islamic finance principles among SMEs in Jordan. This study contributes to the state-of-the-art research by accomplishing two basic tasks from a theoretical and practical viewpoint. The expected contributions are represented by adding to the knowledge of the consultant and researchers. For a long time, most research methods had been founded on a quantitative methodology in conducting and obtaining scientific understanding. In this study, the target population is SMEs in Jordan, and the sample was from workers in such companies. The result showed that (Knowledge awareness, cost-benefit, Business support, Reputation) has a significant effect on adopting Islamic finance. While (Religion obligation, Government support) has not had a substantial impact on adopting Islamic finance. Consequently, this research work has obtained all its objectives and answered its research questions thoroughly. Furthermore, this work has laid a foundation for future studies in this research area by recommending many possibilities and open questions. The scope of the research is currently limited to SMEs only, but it can be extended to larger organizations and the government sector, and there can be more variables.

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Keywords

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