Financial Constraints and Islamic Finance: Lesson Learned From External Financing Perspective

This study examines the presence of financial constraints and explores the role of profit-loss sharing (PLS) in mitigating the problem of the financial constraints stemmed from the capital market imperfections. Using Malaysian listed companies' data, this study finds that the financial constraints are present in the capital market. This finding implies the imperfect capital market. In Islamic PLS framework, there are two options of financing contracts that may be enforced in the capital market as financing mechanisms, i.e. al-musharakah and al-mudharabah. These schemes promote sharing of information and mutual trust between financiers and ‘borrowers'. In these contracts, there are strict terms and conditions to be adhered to by both parties so that the contracts pursue to be valid. Besides, PLS mechanism may reduce the cost of capital since the profit and loss are shared rather than be burdened only on one shoulder. In this regard, the imperfect market problems namely asymmetric information, agency problem and transaction cost can be reduced if not be overcome

Faktor-faktor yang Mempengaruhi Deposito Mudharabah pada Bank Syariah di Indonesia

Mudharabah Deposit is one of Islamic banking products, which is the biggest contributor to sharia banking compared to other collecting products. In addition, according to Bank Indonesia\u27s report, the number of Islamic banking deposits each year has increased significantly. Therefore, in this study, the authors want to know the factors that are expected to affect the number of mudharabah deposits. There are 6 factors that are expected to affect the number of deposits, namely the profit-sharing rate, the interest rate, the promotion rate, the inflation rate, the FDR, and the number of offices. The authors use a weighted average in terms of rate of profit sharing and interest rate and data processing using multiple linear regression. The results of these regression calculations, simultaneously show positive and significant results for all variables. This value resulted from the four regression has a value of sig-F 0.000 is smaller than 10% significance. Partially, profit sharing, promotion cost and number of offices show significant and positive effect on total mudharabah deposit, while interest rate, inflation and FDR show no effect on mudharabah deposit amount