Title: Mastering the Art of Islamic Banking and Finance Literature Review

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After that, timeous remedial action should be implemented to address customer complaints or
concerns. However, there is no assessment made on evaluating the quality of supervision by Sharia
Supervisory Board (SSB) members. Moreover, Selim (2020) ascertained that implementing FinTech
in foreign currency transactions by Islamic banks would increase their market share. In other words,
the conventional thinking of banking has an existence in Islamic Banking and only profit
maximization concept is being considered rather than the concept of profit maximization with social
welfare. PDF A systematic literature review of risks in Islamic banking system A systematic
literature review of risks in Islamic banking system: research agenda and future research directions
M. Objectives of Islamic banking, customer satisfaction and customer 2. In addition, Mohd Nor et al.
(2021) stated that the usage of blockchain technology could be improved by socializing and
educating the community regarding the significant advantages and convenience of utilizing
blockchain on Islamic social finance such as zakat. The methodology of the study is descriptive by
comparing efficiency, asset quality and stability between Islamic banks and conventional banks.
Nevertheless, the contribution of sharia banks in improving social welfare has an essential role
because the higher the income received, the higher the zakat issued by Islamic banks. Thus there is
no leveraged credit creation” (van Greuning and Iqbal, 2007, chapter 2 ). Overall, these findings
point to the many favorable effects of Islamic banking. Hence, the key implication drawn from these
studies is the importance of user experience in using Islamic FinTech. In modern-day Jerusalem. B. In
modern-day Saudi Arabia. C. In modern-day Egypt. 14. What does it take to convert to being a
Muslim? A. There are some causes of sharia banking weakness such as of Information Technology
that still behind of conventional banking, competency, and experience of human resources and the
consciousness of the Muslim community to use sharia banking products for their primary financial
transaction. Non-probability sampling techniques, particularly purposive and snowball sampling,
were used to identify the respondents, as a sampling frame could not be produced. Doumpos,
Hasan, and Pasiouras ( 2017 ) further emphasize the mixed results in the literature in their focus on
the relative financial strength of Islamic and conventional banks. After that, the second part of the
analysis considered the results related to the relationships as shown in the structural model. Another
fruitful avenue of future research could be to assess the extent to which Islamic banks contribute to
project financing. For example, the research on customer perceptions conducted by Els et al. (2017)
and Roberts-Lombard (2020) focused on customers’ commitment and its influence on factors such
as satisfaction and loyalty. What are the similarities between Shia Islam and Sunni Islam? 7. He
received his Ph.D. in Islamic Economics and Finance from Istanbul University. Instead, our system
considers things like how recent a review is and if the reviewer bought the item on Amazon. In 2000,
a website named AristShare was designed to provide a platform for artists to raise funds. Islamic
assets also managed to expand over 10% in 2020, despite the pandemic. Proper handling can
minimize the risks so that Islamic banking can continue to develop. For Islamic Banking in
Indonesia, this sharia risk rating approach can be combined with applicable internal and external risk
rating techniques, to provide the promising quality of service and ensure that the offering of various
produc. This research used secondary data based on Financial Statement derived from the Financial
Service Authority (Otoritas Jasa Keuangan or OJK). Contrast the role of the Qur'an and the Hadith
within Islam. For example, while conventional banks are able to use both debt and equity to finance
their asset portfolios, Islamic banks can only use equity financing and deposits, which limits their
liquidity on the asset side. Table 6 provides a list of future research directions.
Lastly, empirical evidence during the policy uncertainty period, Hasan et al. (2021) portrayed the
positive and significant relationship between cryptocurrency policy uncertainty towards gold, Sukuk,
and the DJ Islamic index return, which indicates the existence of diversification benefit between
those assets during bearish, normal, and bullish market period. Their evidence also suggests that
Islamic banks were able to mobilize the savings of Muslim individuals. Central Bank of Nigeria:
Guidelines for the Regulation and Supervision of Institutions Offering Non-interest Financial
Services in Nigeria. All controls are lagged one year, and all columns include year and country fixed
effects. A recent multi-country report (IMF, 2017 ) identifies persistent differences in the extent to
which different countries adapt their prudential, consumer protection, liquidity management, safety
nets, and resolution frameworks to the specificities of Islamic banking and the standards issued by
IFSB and AAOIFI. Islam is the world's largest religion. B. Islam is the world's second largest
religion. C. Islam is the world's third largest religion. 13. Where did Islam begin? A. Demirguc-Kunt,
A., Klapper, L., Randall, D.: Islamic Finance and Financial Inclusion: Measuring Use of and
Demand for Formal Financial Services among Muslim Adults. This is now one of the fastest growing
sectors within the market place and has, so far, remained on the sidelines of this unrest. However,
they also counterargue that Islamic banks may have less financial strength, given their restrictions to
certain asset classes, prohibition from using derivatives as hedging instruments, and the moral hazard
issues embedded in Islamic contracts. Furthermore, they found a significant positive bilateral causal
relationship between client satisfaction and banking efficiency. Amin et al. (2013) analysed the
relationship between customer satisfaction at Islamic banks with image, trust and customer loyalty
for Muslim and non-Muslim customers. And, according to Yahya, Muhammad, and Hadi ( 2012 )
and di Mauro et al. ( 2013 ), there was no efficiency gap between Islamic banks and conventional
banks before the GFC. Furthermore, feedback from customers should be sought and welcomed on
any aspect related to the Islamic bank’s operations or products and services. He argues that FinTech-
based microfinance can generate enormous employment and economic prosperity for the poor.
Previous studies on crowdfunding, P2P lending, blockchain, and financial inclusion were mainly
qualitative. Other recent survey papers include Alzahrani and Megginson ( 2017 ) and Narayan and
Phan (2019). Consequently, an implied value of the profit margin could be computed. The Sharia
board’s role is to advise Islamic banks and to supervise their operations and performance. The
unbanked population of the world is dominated by the Muslim countries with countries like Pakistan
and Bangladesh with 5.2% and 3.7% of the worlds unbanked population respectively. Contrary to
the conventional banks, Islamic banks are required to operate according to the principles of
Muammalat, which are identified as the avoidance of Riba', Gharar, Maysir, Hilah, and the
promotion of ethical business practices such as justice, fairness and transparency. When considering
geographic location, Doumpos, Hasan, and Pasiouras ( 2017 ) observe that conventional banks
perform better than Islamic banks or banks with Islamic branches in Asia and the GCC. Moreover,
there are differences in the degree of permissibility of some Sharia -compliant products from one
country to another (Song and Oosthuizen, 2014 ). In addition, no significant relationship was found
between a customer’s competence and co-production of services, which implies that a customer did
not need to be an expert in the principles of Islamic banking to be loyal to an Islamic bank. These
results suggest that faith-driven investors prefer Islamic banks’ stocks, and disregard what they
consider to be “sin stocks” (i.e., some of those offered by conventional banks), which do not conform
to their religious beliefs. As can be seen, the number reporting to Bankscope increased from thirty-six
in 1999 to 104 in 2014, with a peak of 116 in 2011. Figure 12.3 plots the total assets of Islamic
banks. Investopedia is part of the Dotdash Meredith publishing family. GIFs Highlight your latest
work via email or social media with custom GIFs. Money in classical Islam: legal theory and
economic practice. These findings broadly confirm prior literature (e.g., Olson and Zoubi, 2008; Turk-
Ariss, 2010; Hasan and Dridi, 2011; Abedifar, Molyneux, and Tarazi, 2013 ). This type of contract is
essentially an asset-backed loan plus a deferred payment sale transaction. From an Islamic law
perspective, the classification of cryptocurrency still needs further analysis.
In result, at the first stage of data curation, we obtain 265 documents. We conclude with a discussion
of avenues for future research. 12.1 Introduction The last two decades have witnessed dramatic
global growth in Islamic finance and banking. Islamic banks offer services that cater to religious
sensitivities, for example, honouring financial and moral obligations to God and stakeholders.
Developing bankable business planDeveloping bankable business plan. This book deals with
conceptual, theoretical, and empirical framework of the Islamic banking system. As such, it is
supposed to embed ethics and social responsibility in Islamic banks’ activities (Abdelsalam et al.,
2016 ). The Islamic Finance Outlook ( 2018, p. 4) outlines the “natural connection between Islamic
finance principles, responsible finance, Sustainable Development Goals (SDGs), and impact
investing. Islamic banking is well-defined as consistent with Sharia ( Kettell, 2011; Oshodi, 2014;
Zaman, 2015 ). Thus, because money cannot reward money, Islamic transactions must be backed by
tangible assets. These countries have a strong connection with Malaysia, Saudi Arabia, and Italy as
their research partners. Teams Enable groups of users to work together to streamline your digital
publishing. The term “Islamic” stands to differentiate between conventional and shariah-compliant
FinTech operators. The mapping analysis visualises the most common topic based on the co-
occurrences of keywords ( Baker et al., 2020 ). Figure 4. describes the keyword occurrence: author
keywords by setting the minimum occurrence of word is two times. Even though there was rapid
emergence of new banks, this expansion had not always corresponded to an improvement in the
financial health of these institutions. They further draw a conclusion that the Muslim population is
finically excluded due to their religious beliefs because Islam prohibits riba and Australia is not
governed by the Islamic financial system. There is still debate amongst the scholars and practitioners
about whether religiosity drives the customers to use Islamic banking, a study by Baber (2020b) and
Marzuki and Nurdin (2020) proved that Islamic banking customers have a strong concern toward
shariah -compliance of FinTech products. The development of the crowdfunding market depends on
the market structure and economic development, advancement in the regulatory framework, and IT
infrastructure. The list of articles in this stream is presented in Table 3. Table 2 further summarizes the
prior literature in this stream. This study elaborated the urgency of handling problematic financing in
Islamic banks in the development of the Indonesian Islamic economy. Lastly, in the green cluster:
Crowdfunding, Islamic crowdfunding, Indonesia, TAM, and SME are the most appear keywords.
According to Hussain, Shahmoradi, and Turk ( 2015, p. 9), “Such transactions were originally
allowed to meet the financing needs of small farmers as they were unable to yield adequate returns
until several periods after the initial investment.” To be Sharia -compliant, payment under these
contracts must be made in full at the beginning of the contract period. Most respondents fell
between 18 to 40?years (55%) and 41 to 55?years (37%). Second, the platform is the agent who
bridges the publisher and funders; the platform's responsibilities include marketing the books and
promoting the publisher to obtain more funding sources. Table 6 provides a list of future research
directions. During periods of uncertainty, faith-driven investors find refuge in norm-confirming
investments (i.e., Islamic banks). Further investigation is warranted on the determinants of stock
liquidity of Islamic banks, and the outcome of such liquidity on the cost of financing of both Islamic
and conventional banks. In the 20 years following his first revelation until his death, Islam became
the dominant force in the Arabian peninsula, and a serious challenge to the Byzantine and Sasanian
empires. Islamic banking, also referred to as Islamic finance or Shariah-compliant finance, refers to
financial activities that adhere to Shariah (Islamic law). For Islamic Banking in Indonesia, this sharia
risk rating approach can be combined with applicable internal and external risk rating techniques, to
provide the promising quality of service and ensure that the offering of various produc. Journal of
Accounting and Finance in Emerging Economies, 7(4), 921-930. This principle is applicable to both
labor and capital.
In Islamic banks, demand deposits ( Amanah ) are entrusted to the bank. In addition, as market
research on Islamic banking in South Africa is new and limited ( Roberts-Lombard, 2020 ), these
results add to and provide insight into customer perceptions of the constructs studied. This is not the
case in conventional banks that finance an asset by extending a loan to the customer, regardless of
the asset. Islamic social finance tools such as zakat, sadaqah, waqf, Islamic microfinance, and micro
takaful models lead to financial inclusion ( Macchiavello, 2017; Zauro et al., 2020 ). Islamic social
finance tools have a positive impact on financial inclusion. The discussion of the above-mentioned
literature lends support for the conceptual model, as shown in Figure 1, that attempts to examine the
stated hypotheses in the South African context. 3. Methodology 3.1 research design and sample. The
methodology of the study is descriptive by comparing efficiency, asset quality and stability between
Islamic banks and conventional banks. The study by Aziz (2018) found that customer loyalty and
communication are mediated by the factors that influence the co-production of services. Because
Islamic banks are unlevered, they are considered to be less risky during crises. Articles Get
discovered by sharing your best content as bite-sized articles. The international comparison of
Islamic and conventional banks in terms of cost and profit efficiency shows that Islamic banks in
advanced economies “seem to be more efficient than those in other countries. They also follow the
idea “that all transactions have to be backed by a real economic transaction that involves a tangible
asset” (Beck, Demirguc-Kunt, and Merrouche, 2013, p. 433), which is in line with the participation
and ownership principles. The authors find that Islamic banks take higher risks and achieve higher
performance than conventional banks. Islamic banking Customer satisfaction Customer loyalty
Moosa, R. The studies on the blue cluster cover the studies related to the shariah compliance and
customer's trust in FinTech. Customer satisfaction could be increased by ensuring that the Islamic
bank focuses on objectives that line up with the Sharia, as shown in the result of the study. Baber
(2020a), Kannaiah et al. (2017), and Abubecker et al. (2019) support these findings, one being that
the Muslims in Non-Muslim countries are financially excluded and are not able to get valuable
financial services due to their religious beliefs. This will ensure that attention is given to areas that
produce the maximum positive experiences, leading to satisfied customers. Findings - The findings
of this study include as follows. Only Muslim customers were included in the study; consequently,
future studies should include other stakeholder groups of the Islamic banks, including comparing
results between each group. The bank acts as an intermediary between the client, from which it
receives payments, and the manufacturer, to which it makes installment payments, because it is the
bank that commits to buying the assets. Since then, 85 articles have been published by 52 journals.
Some recent insights appear in Boubakri et al. ( 2019 ), who examine the comparative stock liquidity
of Islamic banks and matching conventional banks in an international cross-country study. To sum
up, even though the rationality of lending decision making in each banking system has been
influenced by different risk factors, the correlation between some of them is not clearly formed.
Gheeraert, L. and Weill, L. ( 2015 ). “ Does Islamic Banking Development Favor Macroeconomic
Efficiency. The growth of sharia banking holds the promise of fostering a stronger national banking
sector. Using default rates on loans, Baele, Farooq, and Ongena ( 2014 ) observe that the default rate
on Islamic loans is less than half that on conventional bank loans. Two fundamental principles of
Islamic banking are the sharing of profit and loss and the prohibition of the collection and payment
of interest by lenders and investors. Albaity et al. (2019) concluded that Islamic FinTech is based on
the principles of ethics and morality and this characteristic makes it more fit for financial inclusion.
S. Khan et al. (2019) stressed that Islamic finance has some financial services like zakat which
automatically leads to financial inclusion. For example, while conventional banks are able to use
both debt and equity to finance their asset portfolios, Islamic banks can only use equity financing
and deposits, which limits their liquidity on the asset side. It also illustrates that the country's
collaboration network was divided into five clusters.
We conclude that coexistence of both bank types creates a win-win situation and contributes to
financial stability. She acts as Associate Editor for the Journal of Corporate Finance, as Editor in
Chief for Finance Research Letters, co-editor for the Quarterly Review of Economics and Finance,
and is on the editorial boards of Emerging Markets Review and the Journal of International Financial
Markets Institutions and Money. Social Posts Create on-brand social posts and Articles in minutes. A
secondary data published by the Indonesian Central Bank on Sharia Banking Statistics for 2014-
2018 was used to sharpen the analysis. The result of this study is also supported by Nastiti and Kasri
(2019), who declared that the policy-maker should make a strenuous effort to establish a supportive
investment environment for an Islamic bank to adopt FinTech. The final step is categorizing and
summarizing literature findings. Moreover, in the case of Islamic microfinance, S. A. Shaikh (2021)
explained that FinTech would enable Islamic microfinance to obtain a broader range of fund
providers, increase transparency, decline the transaction cost, support the customer's monitoring
process, and increase the accuracy in screening criteria. Error: Try Again Ok Sell Watchlist Expand
Watch List Loading. The data was collected using an online survey and analysed using a structural
equation model based on the partial least squares method. However, in a study on UAE banks,
Nobanee and Ellili ( 2016 ) find no evidence of a relation between Islamic banks’ performance and
CSR disclosure. This study emphasized the validity and credibility of Islamic banking to adopt
FinTech in their services, answering a debate about whether Islamic banking is necessarily creating
money to support their business. On the other hand, the existing studies on the FinTech stream
mainly discussed quantitative methods based on secondary or primary data. Islamic banking is also
referred to as Islamic finance or Shariah-compliant finance. In countries with a smaller Islamic base,
these growth rates have been even more notable. The darker nodes and links designate the past
topics. This stream consists of 20 articles that can be divided into two sub-streams: Customer
perception on Islamic FinTech, its current development, and its impact on Islamic finance
institutions. Their results suggest that large Islamic banks were more profitable than conventional
banks during the crisis, but small Islamic banks were not. It also illustrates that the country's
collaboration network was divided into five clusters. Please indicate the letter of the true statement.
12. Which of the following is true? A. Rationale Islamic banks are those that operate under Shariah
Law. Add Links Send readers directly to specific items or pages with shopping and web links.
Islamic banks need to collaborate with Islamic microfinance institutions to achieve financial
inclusion. Thus, the blockchain will automatically ensure the shariah compliance of business
activities, assess business risk, and provide relevant information for the investor to decide their
participation in the business. Thus, the collaboration network between these two countries is of
relative strength. Despite the huge penetration of Islamic banks and financial services in these
countries, the level of financial inclusion remains significantly low ( Baber, 2020a ). Moreover, we
analyze the research gaps, limitations, and identify the direction for future research, for early career
researches in fintech and Islamic fintech. This principle is applicable to both labor and capital. In
addition, for each stage of the epidemic, this study also recommends ten unique Islamic financial
services. On the contrary, some findings indicate no relationship between customer satisfaction and
loyalty ( Estiri et al., 2011 ). In South Africa, Islamic banking is a growing market ( Muhammad,
2019 ). Since then, 85 articles have been published by 52 journals.
Estiri et al. (2011) conclude that customers who are satisfied with the service offerings by their
Islamic bank are not necessarily loyal. Proper handling can minimize the risks so that Islamic banking
can continue to develop. The Hadith: After the death of Mohammed, his followers collected his
sayings and actions in books to guide and direct their beliefs. This study is a descriptive analytical
study with a normative juridical approach. Thus in Islamic Banking, the creditor should not take
advantage of the borrower. They first examine whether the efficiency of conventional banks is
impacted by the competition of Islamic banks, and then examine the overall impact on financial
development, economic growth, and poverty. The research is quantitative as it uses many statistical
techniques to analyse and interpret the data collected via a cross-sectional online survey. Previously,
he worked as a Team Leader at Public Finance Transformation Office of Ministry of Treasury and
Finance, and as a Policy Analyst at Development Co-Operation Directorate in Organization for
Economic Co-operation and Development, and as a specialist at Undersecretariat of Treasury. Give
us your email address and we’ll send this sample there. Tap to rate Write a review Review must be
at least 10 words Book preview The Islamic Banking and Finance Workbook - Brian Kettell 1 What
Do You Know About Islam? 1.1 LEARNING OUTCOMES, SUMMARY OVERVIEW AND
PROBLEMS 1.1.1 Learning Outcomes After reading Chapter 1 you should be able to do the
following: Describe the role played in Islam by the Prophet Mohammed. The search criterion is
confined to empirical studies that examined the transmission of interest-based monetary policy
through Islamic banks' financing, particularly empirical studies that check the existence of an Islamic
bank financing channel of conventional monetary policy. Though the majority of these Islamic
banking institutions were founded in Muslim countries, Islamic banks also opened in Western Europe
during the early 1980s. This puts an additional burden on Islamic banks in terms of appraising and
assessing which projects to finance. The borrower and the lender work closely together and share the
risk of the venture, which is selected based on its projected returns. Learn it’s evolution, principles,
products and practices. However, in a study on UAE banks, Nobanee and Ellili ( 2016 ) find no
evidence of a relation between Islamic banks’ performance and CSR disclosure. Second, Islamic
banking mobilizes the savings of Muslims who do not want to use conventional banks, and channels
them into the formal sector. We employ RStudio software to achieve the following research
objectives (RO1.1 and RO1.2), whereas (RO1.3 and RO2) are addressed using VOSviewer
software. First, because Islamic banks may exhibit a greater capacity to withstand negative shocks
that could contribute to financial instability, liquidity creation by Islamic banks may contribute less
to financial instability than conventional banks. To earn money without the typical practice of
charging interest, Islamic banks use equity participation systems. Equity participation means if a bank
lends money to a business, the business will pay back the loan without interest and instead give the
bank a share in its profits. They also show that Islamic banks create more liquidity per unit of assets
on the asset side of the balance sheet, and less on the off-balance-sheet side, than conventional banks
(Table 12.8 ). The authors note that conventional bank liquidity creation contributes to financial
instability, while that of Islamic banks has no significant impact. The remainder of this paper is
organized as follows. First, Islamic banks create more liquidity because they are generally better at
absorbing risk, they are more highly capitalized, and they are less exposed to bank runs than
conventional banks. Organizing regular seminars, campaigns, workshops, and training sessions in
increasing digital financial literacy, which in turn, prompt the effectiveness of mobile banking usage
specifically for the unbanked community, small business owners, undereducated people, women, and
elder people ( Banna et al., 2021; Ezzahid and Elouaourti, 2021 ). Thus, the collaboration network
between these two countries is of relative strength. The financial performance itself is seen from 3
aspects, namely efficiency, asset quality, and stability. An institution provides the cost and profit
margin of an asset. Baber (2020a), Kannaiah et al. (2017), and Abubecker et al. (2019) support these
findings, one being that the Muslims in Non-Muslim countries are financially excluded and are not
able to get valuable financial services due to their religious beliefs. Platonova et al. ( 2018 ) show that
the CSR activities of Islamic banks in GCC countries are positively related to their long-term
performance, confirming earlier evidence on the positive value-enhancing effect of CSR for non-
financial firms. Mallin, Farag, and Ow-Yong ( 2014 ) show that Islamic banks with larger SSBs tend
to have higher CSR disclosures, thus establishing a link between CSR and corporate governance.
Another research by W. M. A. Ahmed (2021) analysis the sensitivity of the Islamic stock market
towards the dynamic volatility of bitcoin in developed and emerging markets and found a similar
behavior of Islamic stock in two types of markets during normal, bear, and bull markets states.
The bibliometrics analysis is used in this study to answer the RO1 and RO2, whereas SLR-PRISMA
is adopted to address the RO3 and RO4. This study elaborated the urgency of handling problematic
financing in Islamic banks in the development of the Indonesian Islamic economy. Other recent
survey papers include Alzahrani and Megginson ( 2017 ) and Narayan and Phan (2019). Under this
type of contract, the benefits and risks of asset ownership are transferred to the client along with
ownership, but the bank shares in the project’s risk because it assumes liability if the goods it
purchased were defective. Journal of International Financial Markets, Institutions and Money, 66,
101196. In the following section, the Islamic banking movement worldwide is discussed followed by
a brief comparison between the Islamic banking models in the gulf region (as one of the main parts
of the world applying Islamic Banking) and its counterpart outside of the gulf region. Under an Ijara
contract, the bank retains ownership of the goods, leasing them out for pre-agreed payments (to
avoid speculation) over a pre-agreed period of time, just as in a conventional leasing contract. On the
contrary, some findings indicate no relationship between customer satisfaction and loyalty ( Estiri et
al., 2011 ). In South Africa, Islamic banking is a growing market ( Muhammad, 2019 ). In addition,
any investments involving items or substances that are prohibited in the Quran—including alcohol,
gambling, and pork—are also prohibited. Accordingly, the overall results of the study are expected
to inform those charged with governance to protect their affairs by demonstrating the importance of
Sharia compliance at the Islamic bank and its beneficial outcomes for customer satisfaction and
customer loyalty. This research was conducted at sharia banks and conventional banks in the period
2010-2020 and used secondary data. In section 12.3, we discuss its primary characteristics, including
its underlying principles and common financial products. Zaher and Hassan ( 2001 ) argue that the
liberalization of capital markets, the global integration of financial markets, structural
macroeconomic reforms, and the introduction of innovative Islamic products also contributed to the
growth of Islamic banking. Islamic banks make a profit through equity participation, which requires
a borrower to give the bank a share in their profits, rather than paying interest. The result from
statistic data process showed that there were differences in efficiency, asset quality, and stability
between Islamic Banking and Conventional Banking where conventional banking more efficient,
have better asset quality and more stability than sharia banking. Having access to the key financial
services is the major indicator of the economic well-being, quality of life, and standard of living of
the population all across the globe ( Banna et al., 2020; Sain et al., 2018 ). Not only that having
access to these valuable financial services helps a person to make an online payment, access to credit
and offers, investments, and getting banking and other financial services ( Aldoseri and
Worthington, 2017 ). World Bank Policy Research Working Paper (2013) Echchabi, A., Azouzi, D.:
Predicting customers’ adoption of Islamic banking services in Tunisia: a decomposed theory of
planned behaviour approach. Using default rates on loans, Baele, Farooq, and Ongena ( 2014 )
observe that the default rate on Islamic loans is less than half that on conventional bank loans. It is
most suitable for financing long-term projects. This study underlines that the most profound factors
affecting the model's acceptance are income, household size, and knowledge about climate change.
Despite the huge penetration of Islamic banks and financial services in these countries, the level of
financial inclusion remains significantly low ( Baber, 2020a ). Islamic Banking and Finance
Definition: History and Example. Since then, 85 articles have been published by 52 journals.
However, certain unresolved issues persist, particularly in assessing the performance disparity
between sharia and conventional banks. For example, while conventional banks are able to use both
debt and equity to finance their asset portfolios, Islamic banks can only use equity financing and
deposits, which limits their liquidity on the asset side. Moreover, Chkili et al. (2021) found that
bitcoin provides a safer asset for investors during economic downturns than Islamic stock. In
addition, because Islamic banks engage in risk-sharing partnership contracts, they are not allowed to
require collateral to reduce credit risk, as conventional banks do. According to the authors, “Because
Islamic banking is guided by Shariah law, it is largely immune to poorly functioning
institutions—from the judiciary to the bureaucracy—because there is little resort to them; disputes
are instead settled within Islamic jurisprudence” (Imam and Kpodar, 2013, p. 131). For a discussion
of why Islamic banks use interest rates as benchmarks, see. Topics concern over the past years.
4.?Content analysis of Islamic FinTech publications This section is divided into two sections. The
Sharia principles of profit-and-loss sharing, and the prohibitions on paying and receiving interest and
taking excessive risk (e.g., investing in derivatives products) help buffer Islamic banks during
financial crises.