IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v7y2023i10p1572-1585.html
   My bibliography  Save this article

Perception of Small and Medium Enterprises about Islamic Banks in Oman: Evidence from Survey Data

Author

Listed:
  • Dr. Mohamme Dulal Miath

    (University of Nizwa)

  • Mohammed Ali Al Kindi

    (University of Nizwa)

Abstract

Islamic banking system is one of the fastest growing sectors of the global finance industry. It has an enormous potential to satisfy the financing needs of SMEs that wish to share business risks with financers because Islamic banks allow customers and investors to involve with interest-free financial transactions on a risk-sharing based Shariah-compliance products. From this perspective, this paper aims to identify factors that influence SMEs in Oman to choose a particular bank. In addition, the paper examines the determinants that attract SMEs in Oman to choose (or not to choose) Islamic banks. To achieve these objectives, the paper collects data from 106 SMEs from the Muscat governorate in Oman. Applying structural equation modeling (SEM), the paper finds that Islamic banks’ attractive package including favorable terms and conditions, easy access to financing facilities, availability of sufficient branches and ATMs facilities, and the existence of electronic banking system influence customers to establish business ties with Islamic banks. The paper further shows that SMEs in Oman are optimistic about the thriving future of Islamic banks in the country. The paper offers important policy prescriptions for regulatory authority, practitioners, and customers of Islamic banks.

Suggested Citation

  • Dr. Mohamme Dulal Miath & Mohammed Ali Al Kindi, 2023. "Perception of Small and Medium Enterprises about Islamic Banks in Oman: Evidence from Survey Data," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(10), pages 1572-1585, October.
    • Handle: RePEc:bcp:journl:v:7:y:2023:i:10:p:1572-1585
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-7-issue-10/1572-1585.pdf
    Download Restriction: no
    File URL: https://www.rsisinternational.org/journals/ijriss/articles/perception-of-small-and-medium-enterprises-about-islamic-banks-in-oman-evidence-from-survey-data/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Thorsten Beck & Asli Demirguc-Kunt & Ross Levine, 2005. "SMEs, Growth, and Poverty: Cross-Country Evidence," Journal of Economic Growth, Springer, vol. 10(3), pages 199-229, September.
    2. Anamitra Shome & Fauzia Jabeen & Rajesh Rajaguru, 2018. "What drives consumer choice of Islamic banking services in the United Arab Emirates?," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 11(1), pages 79-95, January.
    3. Mohamed Albaity & Mahfuzur Rahman, 2019. "The intention to use Islamic banking: an exploratory study to measure Islamic financial literacy," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 14(5), pages 988-1012, August.
    4. David North & David Smallbone, 2000. "Innovative Activity in SMEs and Rural Economic Development: Some Evidence from England," European Planning Studies, Taylor & Francis Journals, vol. 8(1), pages 87-106, February.
    5. Muhammad Nazmul Hoque & Muhammad Khalilur Rahman & Jamaliah Said & Farhana Begum & Mohammad Mainul Hossain, 2022. "What Factors Influence Customer Attitudes and Mindsets towards the Use of Services and Products of Islamic Banks in Bangladesh?," Sustainability, MDPI, vol. 14(8), pages 1-19, April.
    6. Maricica Moscalu & Claudia Girardone & Raffaella Calabrese, 2020. "SMEs’ growth under financing constraints and banking markets integration in the euro area," Journal of Small Business Management, Taylor & Francis Journals, vol. 58(4), pages 707-746, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hind Lebdaoui & Youssef Chetioui & Tahar Harkat, 2024. "Propensity towards Islamic banking among non-users: a mixed-methods analysis," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(1), pages 45-66, March.
    2. Oznur Ozdamar & Eleftherios Giovanis & Sahizer Samuk, 2020. "State business relations and the dynamics of job flows in Egypt and Turkey," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(4), pages 519-558, December.
    3. Knack, Steve & Xu, Lixin Colin, 2017. "Unbundling institutions for external finance: Worldwide firm-level evidence," Journal of Corporate Finance, Elsevier, vol. 44(C), pages 215-232.
    4. Lim, Dominic S.K. & Oh, Chang Hoon & De Clercq, Dirk, 2016. "Engagement in entrepreneurship in emerging economies: Interactive effects of individual-level factors and institutional conditions," International Business Review, Elsevier, vol. 25(4), pages 933-945.
    5. Ngalim, Siti Manisah & Ismail, Abdul Ghafar, 2015. "An Islamic Vision Development Based Indicators in Analysing the Islamic Banks Performance: Evidence from Malaysia, Indonesia and selected GCC Countries," Working Papers 1436-2, The Islamic Research and Teaching Institute (IRTI).
    6. El-Mallakh, Nelly & Maurel, Mathilde & Speciale, Biagio, 2018. "Arab spring protests and women's labor market outcomes: Evidence from the Egyptian revolution," Journal of Comparative Economics, Elsevier, vol. 46(2), pages 656-682.
    7. AKM Asaduzzaman Patwary ∗, 2020. "Private Sector SMEs in Realizing SDG 1- "No Poverty" in the Context of Bangladesh," International Journal of Humanities, Arts and Social Sciences, Dr. Mohammad Hamad Al-khresheh, vol. 6(6), pages 274-288.
    8. Faiza Manzoor & Longbao Wei & Mohammad Nurunnabi & Qazi Abdul Subhan, 2019. "Role of SME in Poverty Alleviation in SAARC Region via Panel Data Analysis," Sustainability, MDPI, vol. 11(22), pages 1-14, November.
    9. Sanchis-Guarner, Rosa & Szumilo, Nikodem & Vernet, Antoine, 2024. "Startup stations: the impact of rail access on entrepreneurship (self-employment) in England and Wales," LSE Research Online Documents on Economics 124680, London School of Economics and Political Science, LSE Library.
    10. Dr. J. G. Sri Ranjith & Dr. O. G Dayaratna Banda, 2014. "Determinants of Success of Small Business: A Survey-Based Study in Kuliyapitiya Divisional Secretariat of Sri Lanka," International Journal of Business and Social Research, LAR Center Press, vol. 4(6), pages 38-50, June.
    11. Hassan, Hissam & Masih, Mansur, 2017. "Public debt and GDP growth in the Malaysian islamic economy," MPRA Paper 107999, University Library of Munich, Germany.
    12. Sanchez Badini, Olivia & Hajjar, Reem & Kozak, Robert, 2018. "Critical success factors for small and medium forest enterprises: A review," Forest Policy and Economics, Elsevier, vol. 94(C), pages 35-45.
    13. Dr. Washington O. Okeyo Ph.D & Dr. James Gathungu, Ph.D, & Prof. Peter K’Obonyo Ph.D, 2014. "The Effect of Business Development Services on Performance of Small and Medium Manufacturing Enterprises in Kenya," International Journal of Business and Social Research, LAR Center Press, vol. 4(6), pages 12-26, June.
    14. Lin, Chen & Lin, Ping & Song, Frank, 2010. "Property rights protection and corporate R&D: Evidence from China," Journal of Development Economics, Elsevier, vol. 93(1), pages 49-62, September.
    15. Sameeksha Desai, 2009. "Measuring Entrepreneurship in Developing Countries," WIDER Working Paper Series RP2009-10, World Institute for Development Economic Research (UNU-WIDER).
    16. Naqeeb Ur Rehman, 2016. "Network alliances and firms’ performance: a panel data analysis of Pakistani SMEs," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(1), pages 37-52, April.
    17. Elena DRUICĂ & Zizi GOSCHIN & Ana-Maria GRIGORE, 2017. "Regional interplay of factors informing SMES’ density in Romania. A panel data analysis," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 8, pages 79-95, June.
    18. Dr. Washington O. Okeyo & Dr. James Gathungu & Prof. Peter K’Obonyo, PhD, 2014. "The Impact of Business Development Services on Entrepreneurial Orientation and Performance of Small and Medium Enterprises in Kenya," International Journal of Business and Social Research, LAR Center Press, vol. 4(7), pages 38-49, July.
    19. Parvaneh Shahnoori & Glenn P. Jenkins, 2018. "The Value of Online Banking to Small and Meduim-Sized Enterprises: Evidence From Firms Operating in The UAE From Trade Zones," Development Discussion Papers 2018-12, JDI Executive Programs.
    20. S.I. Ocheni & T.I. Gemade, 2015. "Effects of Multiple Taxation on the Performance of Small and Medium Scale Business Enterprises in Benue State," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(3), pages 345-364, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:7:y:2023:i:10:p:1572-1585. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.