Date of Award

1-1-2017

Document Type

Masters Thesis

Degree Name

M.A.

Organizational Unit

College of Arts Humanities and Social Sciences, Economics

First Advisor

Tracy Mott, Ph.D.

Second Advisor

Christine Ngo

Third Advisor

Juan Carlos Lopez

Fourth Advisor

Andrea Stanton

Keywords

Profit-loss sharing, Small and medium enterprises

Abstract

This study aims to explore the role of profit-loss sharing (PLS) models to alleviate access to finance for small and medium enterprises in Saudi Arabia, in the light of the stringent requirements of traditional financial institutions, to ensure the growth and development of the SME sector. A central question of this study is the extent to which Islamic banks can adopt profit-loss sharing modes to finance SMEs. The main results present the barriers preventing Islamic banks from the application of profit-loss sharing that increase incidence of agency problems for such institutions. High asymmetry of information and the nature of Islamic banks as depository institutions place more constraints on extending finance on the basis of profit-loss sharing. Profit-loss sharing dominates the literature of Islamic finance, however, there is a lack of rigorous empirical evaluations of the potential benefits of profit-loss sharing to finance SMEs. There is a need for public intervention to stimulate the role of non-banking institutions that are considered more suitable for long-term, riskier investments to offer alternative finance for SMEs on the basis of profit-loss sharing.

Publication Statement

Copyright is held by the author. User is responsible for all copyright compliance.

Rights Holder

Alhanoof Alghamdi

Provenance

Received from ProQuest

File Format

application/pdf

Language

en

File Size

78 p.

Discipline

Economics, Finance, Entrepreneurship

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