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Contributing factors on the allocation of funds in the Islamic society

Contributing factors on the allocation of funds in the Islamic society This paper aims to explain and present a theoretical framework for providing people with savings to finance two sectors: profitable investment and Gharz-al-Hassane. To do this first, assumptions and presumptions of the theory and framework are expressed, and then the effect of belief on this behavior is explained. Subsequently, this theoretical framework is evaluated in an empirical research.Design/methodology/approachThe theoretical framework is explained by mathematical and logical methods. The experimental study is carried out using real data of 500 households from Zahedan (Center of Sistan and Baluchestan Province of Iran). Data were collected using questionnaire and were analyzed using statistical and econometric methods.FindingsThe result indicates that demands of Iranian people are not met within the framework of official markets. This disparity in supply and demand has led to the actions of people outside the formal framework, and so, banks and financial institutions cannot exploit the supply of people’s savings. On this basis, key factors determining people supply in a variety of markets are religious belief, age, income, education level, religious experience and so on, which should be considered in designing the Islamic banking and financial tools.Originality/valueToday, economics and marketing have shown that an enterprise needs to meet customer demand to succeed. In the field of Islamic banking and finance, financial firms and banks should know this too. However, there are not many research studies in this area. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Islamic Marketing Emerald Publishing

Contributing factors on the allocation of funds in the Islamic society

Journal of Islamic Marketing , Volume 10 (4): 17 – Oct 21, 2019

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1759-0833
DOI
10.1108/jima-02-2017-0017
Publisher site
See Article on Publisher Site

Abstract

This paper aims to explain and present a theoretical framework for providing people with savings to finance two sectors: profitable investment and Gharz-al-Hassane. To do this first, assumptions and presumptions of the theory and framework are expressed, and then the effect of belief on this behavior is explained. Subsequently, this theoretical framework is evaluated in an empirical research.Design/methodology/approachThe theoretical framework is explained by mathematical and logical methods. The experimental study is carried out using real data of 500 households from Zahedan (Center of Sistan and Baluchestan Province of Iran). Data were collected using questionnaire and were analyzed using statistical and econometric methods.FindingsThe result indicates that demands of Iranian people are not met within the framework of official markets. This disparity in supply and demand has led to the actions of people outside the formal framework, and so, banks and financial institutions cannot exploit the supply of people’s savings. On this basis, key factors determining people supply in a variety of markets are religious belief, age, income, education level, religious experience and so on, which should be considered in designing the Islamic banking and financial tools.Originality/valueToday, economics and marketing have shown that an enterprise needs to meet customer demand to succeed. In the field of Islamic banking and finance, financial firms and banks should know this too. However, there are not many research studies in this area.

Journal

Journal of Islamic MarketingEmerald Publishing

Published: Oct 21, 2019

Keywords: Investment; Islamic finance; Belief; Islamic markets; Customer

References