Browse
Recent Submissions
Item Progression of the Islamic Finance Industry of Pakistan by the Development and Adoption of Fintech(UMT, Lahore, 2023) Muhammad Shahid SiddiqueFintech can dramatically change the procedures and structure of financial services positively. Artificial Intelligence, Blockchain, the Internet of Things, and Cloud computing are four major technologies that are and will shape the future of different sectors of an economy including the Islamic financial industry. Islamic finance has the potential to grow rapidly in Pakistan. The core purpose of this study is to explore the potential impact on the performance of Islamic financial institutions in Pakistan if Fintech is adopted by these institutions. Complimentary purposes include the understanding of the ecosystem for Fintech development in Pakistan, issues in the way of development and adoption of Fintech, and the proposed solutions. For this, the grounded theory method of qualitative research has been used. Data is collected through semi-structured interviews of 25 experts belonging to different categories of actors forming the ecosystem of Islamic Fintech in Pakistan. It has been found that the development and adoption of Fintech will increase the performance of Islamic financial institutions and will increase financial inclusion. For this, every actor in the ecosystem of Islamic Fintech needs to play its role. The ecosystem for the Islamic Fintech model includes the Government, financial institutions, Shariah scholars, customers, technology companies, regulators like SBP and SECP, and Universities. Government is the most vital actor that needs to develop short-term and long-term policies and take immediate steps for the development of Fintech in the country. Pakistan needs to develop Infrastructure for IT & Telecom, make long-term policies for Islamic Financial Technology and provide rewards to Islamic FinancialTechnology experts as per the international market.Item THE MODERATING ROLE OF ISLAMIC FINANCING ON FINANCIAL DEVELOPMENT AND ENTREPRENEURSHIP– A PANEL DATA ANALYSIS(UMT, Lahore, 2023) Hadia SohailBackground: Empirically, access to finance is the major constraint found by studies related to entrepreneurial finance. The conventional system does not favour entrepreneurship and risk transfer, and fixed returns-based lending may do more harm to the new venture than good. Muslim entrepreneurs feel reluctant to acquire usurious financing for their business needs. Thus, in most Muslim countries, the financial system is not playing a fruitful role in promoting entrepreneurship. In comparison, Islamic finance provides a participative and equitable alternative for new ventures.Item Agriculture Finance by Islamic Banks for Crop Farmers of Punjab Pakistan: Challenges and Solutions(UMT, Lahore, 2023) MASOOMA BATOOLThe major sector responsible to supply food is the agriculture and for Pakistan it is considered as backbone. In Pakistan, the agriculture sector has enough potential to contribute to uplifting the economy. The current study is focused on the crop (including tunnel farming) sector and its management of agricultural financial needs through formal and informal sources. In Pakistan full fledged Islamic banks are one of the formal sources of getting agriculture finance for farmers. But this formal source of getting agricultural finance is observed not reaching the massive farmers community out there especially in rural areas. So the current research studies the challenges/solutions for this formal source (full-fledged Islamic banks) and crop/tunnel farmers community of Punjab Pakistan to manage financial requirements of farmers.Item INFLUENCE OF CORPORATE GOVERNANCE ON CREDIT RATING OF ISLAMIC AND CONVENTIONAL BANKS IN PAKISTAN(UMT, Lahore, 2023) Ali SalmanCredit rating organizations play a significant role in the development of the financial sector by enabling lenders and borrowers to express their professional opinions about an institution's capacity to fulfill its financial obligations through credit ratings. Credit rating agencies analyze corporate governance to determine an institution's creditworthiness. Perhaps Shariah compliance in Islamic banks supports better corporate governance, which, in turn, results in higher credit ratings compared to conventional banks. This study examines whether Islamic and conventional banks in Pakistan with good corporate governance attributes receive higher credit ratings than banks with bad corporate governance. Descriptive statistics, Pearson correlation, multicollinearity test, and an ordered logistic regression are employed to test the relationship between corporate governance attributes and credit rating. Three models are employed to test the relationship between dependent variables (credit rating) and independent variables (corporate governance attributes). Model A covers Islamic banks, model B covers Islamic and model C includes both Islamic and conventional banks. All three models adopt log likelihood, Wald Chi-squares, and generalised R-square tests to assess the significance of the model parameters and fitness of the model. Data was collected for 22 Islamic and conventional banks over a period of 13 years, from 2007 to 2020. The results demonstrate a significant negative correlation between board size, busy directors, and shariah board size and Islamic banks' credit ratings. Independent boards, female directors, board meetings, listing shares, audit committee size, and total assets show a significant positive relationship with Islamic banks' credit ratings. While in conventional banks, blockholders, foreign investors, listing shares, and leverage ratios have significant negative relationships with credit ratings. In Panel Study, Islamic and conventional banks' credit ratings are negatively impacted by board size, blockholders, and capital adequacy ratio. Board independence, female directors, board meetings, listing shares, and audit committee size have a significant positive correlation in both Islamic and conventional banks with credit ratings. Shariah supervisory board is the major distinguishing factor between Islamic and conventional banks. The findings show that shariah board composition has a significant positive impact on Islamic banks' credit ratings, shariah board size has a significant negative impact, and shariah supervisors' training and board expertise have an insignificantly negative impact. The findings suggest that the Shariah board in Islamic banks works in addition to the corporate board as a monitoring body. Its main responsibility is to make sure that all laws, rules, and corporate governance guidelines are followed. This dual oversight helps improve the Islamic banks' creditworthiness. Academics, regulatory organizations, and practitioners can use the results to make more informed decisions, which will help in the growth of a sound Islamic banking system in Pakistan, and completely and confidently switch to a sole Islamic banking system