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Impact Of Islamic Banking Inclusion On Sme Employment Growth In Nigeria

Author

Listed:
  • Tasiu Tijjani Sabiu

    (Universiti Brunei Darussalam, Brunei Darussalam)

  • Muhamad Abduh

    (Universiti Brunei Darussalam, Brunei Darussalam)

Abstract

Despite the considerable resources devoted to SMEs by Islamic banks worldwide, and Nigeria in particular, there has been no rigorous empirical evidence regarding the effectiveness of Islamic banking inclusion on employment growth in SMEs globally. This study fills this gap by analysing the effectiveness of access to Islamic banking financing in promoting MSME’s growth in Kano Metropolis, Nigeria. We focus on the impact of the credit lines facilitated by Jaiz Bank Plc in fostering firms’ growth measured in terms of employment. A survey based on a quasi- experimental approach was employed and the data were collected by means of a questionnaire distributed to a sample of 385 MSMEs’ beneficiaries and non-beneficiaries of Islamic bank financing in Kano Metropolis, Nigeria. Using difference-in-difference and propensity score matching techniques to deal with selection bias, the study found significant positive effects on MSMEs’ employment growth. In addition, the paper highlights the important role of Islamic bank financing in mitigating the unemployment crisis in Nigeria. The paper recommends that improvement of the Islamic banking system by employing PLS financing, especially Musharaka, could foster MSMEs’ financial inclusion and job creation.

Suggested Citation

  • Tasiu Tijjani Sabiu & Muhamad Abduh, 2021. "Impact Of Islamic Banking Inclusion On Sme Employment Growth In Nigeria," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 7(1), pages 77-106, February.
    • Handle: RePEc:idn:jimfjn:v:7:y:2021:i:1d:p:77-106
    DOI: https://doi.org/10.21098/jimf.v7i1.1354
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    Citations

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    Cited by:

    1. Elida Elfi Barus & Murah Syahrial & Evan Hamzah Muchtar & Budi Trianto, 2024. "Islamic Financial Literacy, Islamic Financial Inclusion and Micro-Business Performance," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 19(1), pages 1-24, Enero - M.

    More about this item

    Keywords

    Islamic banking inclusion; Employment growth; DID; QDID;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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