An evaluation of the suitability of the Istisna contract to financing small enterprises - Essay Example

Only on StudentShare

Extract of sample
An evaluation of the suitability of the Istisna contract to financing small enterprises

These banks offer services based on religious teachings and laws. The banks continue to provide innovative financial products aimed at filling the existing gaps in the financial industry. These banks have used a philanthropic approach, adopted from Islamic teaching, to offer high quality services to customers. One of these approaches has been the Istisna contract. Based on the Sunnah of the prophet Muhammad (PBUH) this contract has transformed the banking industry immensely (Mahlknecht, 2009). The use of this contract may be enormously beneficial to people seeking comprehensive funding for small businesses.
The contract and its use by Islamic banks
The Istisna contract falls under the category of manufacturing contracts. It was created by the Islamic Financial Institution in line with the Istisna believes. The contract is strongly related to the shariah. In Arabic, the word Istisna means making a request to someone to build, construct or manufacture something for another. This contract is based on the principle meaning of the word. The contract, therefore, involves agreements for sale and purchase between two individuals. The items under discussion in the contract agreements of Istisna are non-existent. This can be termed as the greatest difference between the Istisna and other financial contracts within the industry (Warde, 2000). This has led to the identification of the Istisna as a exceptional sale agreement. ...Show more

Summary

The 21st century continues to see new inventions in many sectors of the economy. The modes of operations continue to diversify as years progress. The development of Islamic banking has immensely transformed the banking sector. …
Author : alvenasipes
An evaluation of the suitability of the Istisna contract to financing small enterprises essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"An evaluation of the suitability of the Istisna contract to financing small enterprises"
with a personal 20% discount.
Grab the best paper

Related Essays

Small and Medium Enterprises (3000 words)
However, the recession brought about uncertainties on the future performance of businesses. Thus, small and medium enterprises could not easily access credit. The credit approval rates reduced not only for SMEs but also for large institutions as well. The recession weakened the ability of lenders to meet the demand for loans especially without security.
12 pages (3000 words) Essay
Small and Medium Enterprises
But times have changed with the globalisation regime multinational enterprises have made a distinctive mark on the local markets as well. While on the one hand this affected the economic factors of the region or country, on the other the SMEs started realising the need for pressing changes in the management of different aspects of the enterprise.
5 pages (1250 words) Essay
Small and Medium Sized Enterprises Essay
Although SME liquidity information at a Chinese level is not available, it is compiled for certain countries. In China, franchising has played an important role in the development and expansion of businesses for many years. For example, the number of business format franchisors has grown from 909 in 1990 to over 3,080 in 2000 (Garnaut et al 2000).
6 pages (1500 words) Essay
Globalisation and Small Medium Enterprises
However, globalization also raises the risk of marginalization of countries, in particular the poorest countries, and the most vulnerable groups everywhere"2 "Several CEI countries, which are moving towards a free market economy, fear, that the globalization process of the world economy and markets might affect an economic texture that is still unprepared from a technical, financial, organizational and social point of view.
12 pages (3000 words) Essay
Small and Medium Enterprises Master Essay
SME either Small or the Medium-Sized Enterprises generally serves as the whole Switzerland, by providing the full range of various services and products from the fixed-line and also from the mobile communications to data service, internet, maintenance as well as the operation of the whole IT infrastructure.
14 pages (3500 words) Essay
Small and Medium Enterprises Essay
This activity has been instrumental due to the fact that once companies get into the cycle of production; their input into the innovation side gets decreased day by day. Above stated is one way to keep focusing on innovation and keeping the production channel focused on manufacturing.
16 pages (4000 words) Essay
Economics of small and medium enterprises
According to the essay, SMEs have become serious victims of jeopardy of late, due to various unfavourable factors making it difficult for them to sustain their existence. In order to eradicate such vulnerability, a number of practices like supportive tax reforms, financial aids, agreements with creditors and banks have been embraced by government.
10 pages (2500 words) Essay
Management (Small bussines & Enterprises)
In the field of entrepreneurship study, the concept of personality traits and psychological traits has been a subject of a number of debates and controversies. Personality Traits is one of the most popular research areas and it is also one of the subjects which has one of the
8 pages (2000 words) Essay
Managing small and Medium Enterprises Year 3
(Bradley, 2007) for senior citizens who are in the age bracket of 55 years and above. Indeed, the company has always focused on product development, value addition, branding and differentiation strategies; therefore, today it has
25 pages (6250 words) Essay
Small and Medium Enterprises (SMEs)
The effect of globalization has consequently resulted in industrialization in developing countries. Many SMEs have then been set up through industrialization and therefore it has created employment opportunities. Developing countries are among other factors,
4 pages (1000 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT