Financing to Infrastructure Contractors Using Musharakah Contract in Islamic Banks Indonesia
Thirty years since they began operating in Indonesia, the market share of Islamic banks is still small (6%). Additionally, their share of financing to the construction segment is only 7 percent of the industry’s total. It is imperative to identify why Islamic banks are trailing in this segment an...
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| id |
my-usim-ddms-13383 |
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uketd_dc |
| institution |
Universiti Sains Islam Malaysia |
| collection |
USIM Institutional Repository |
| language |
en_US |
| topic |
Commercial credit -- Indonesia Finance -- Religious aspects -- Islam Banking law (Islamic law) Profit-sharing -- Banking law (Islamic law) Commercial credit -- Indonesia |
| spellingShingle |
Commercial credit -- Indonesia Finance -- Religious aspects -- Islam Banking law (Islamic law) Profit-sharing -- Banking law (Islamic law) Commercial credit -- Indonesia Mohamad Torik Langlang Buana Financing to Infrastructure Contractors Using Musharakah Contract in Islamic Banks Indonesia |
| description |
Thirty years since they began operating in Indonesia, the market share of Islamic banks
is still small (6%). Additionally, their share of financing to the construction segment is
only 7 percent of the industry’s total. It is imperative to identify why Islamic banks are
trailing in this segment and to recommend how they may improve their position. The
study aims to investigate the current practices and approaches of Islamic banks to
finance infrastructure constructors and to propose musharakah as a financing solution.
The study also aims to support Indonesia’s Islamic Economy Masterplan. The study,
therefore, aims to accomplish three objectives: (1) to investigate the current practices
and approaches of Islamic banks in Indonesia to finance construction companies, in
particular infrastructure contractors; (2) to identify the reasons for the low share of
financing from Islamic banks to infrastructure contractors; and (3) to determine the
appropriateness of musharakah contract to fulfil the financing needs of infrastructure
contractors. This study is qualitative in nature. Data were collected using semistructured
interviews with key personnel of Islamic banks, infrastructure contractors,
and an Islamic finance authority to answer the research questions. The study also used
secondary data from annual reports, websites, and other relevant documents. The data
were analysed using thematic analysis. For the first research objective, the study found
that Islamic banks perceived contractors only as a component of the construction
process. They have not set infrastructure contractors as their target segment. As a result,
Islamic banks and infrastructure contractors have rarely been in a financier-customer
relationship. This creates information asymmetry between both parties. For the second
objective, the reasons for the low share of financing of Islamic banks to infrastructure
contractors include changes in ownership and limited area of operations of some Islamic
banks. Additionally, some banks follow the policies set by their parent banks, which do
not focus on infrastructure contractors. Most Islamic banks also have not considered
contractors as potential customers. For the third objective, it was concluded that
musharakah is ready to be used to finance infrastructure contractors. Islamic banks must
carry out proper marketing activities so that infrastructure contractors become more
aware of the offerings of Islamic banks. The thesis contributes theoretical and practical
knowledge concerning musharakah. It also contributes to the knowledge of
infrastructure contractors of non-interest-based financing. The findings are expected to
be useful for Islamic banks to gain new customers and increase market share. For
construction companies, the findings inform them of non-usury financing alternatives. |
| format |
Thesis |
| author |
Mohamad Torik Langlang Buana |
| author_facet |
Mohamad Torik Langlang Buana |
| author_sort |
Mohamad Torik Langlang Buana |
| title |
Financing to Infrastructure Contractors Using Musharakah Contract in Islamic Banks Indonesia |
| title_short |
Financing to Infrastructure Contractors Using Musharakah Contract in Islamic Banks Indonesia |
| title_full |
Financing to Infrastructure Contractors Using Musharakah Contract in Islamic Banks Indonesia |
| title_fullStr |
Financing to Infrastructure Contractors Using Musharakah Contract in Islamic Banks Indonesia |
| title_full_unstemmed |
Financing to Infrastructure Contractors Using Musharakah Contract in Islamic Banks Indonesia |
| title_sort |
financing to infrastructure contractors using musharakah contract in islamic banks indonesia |
| granting_institution |
Universiti Sains Islam Malaysia |
| url |
https://oarep.usim.edu.my/bitstreams/d15ff9d2-a880-436d-85eb-38c6215ff6cd/download https://oarep.usim.edu.my/bitstreams/974e5be4-3e73-4b80-bdef-654eb59fae54/download https://oarep.usim.edu.my/bitstreams/22336c5c-3c00-4de1-abe5-654dbfbe86b2/download https://oarep.usim.edu.my/bitstreams/d1a31ac1-2e07-4032-9da8-e34647cb56aa/download https://oarep.usim.edu.my/bitstreams/1913b188-61cc-4854-9319-2aed75b73414/download https://oarep.usim.edu.my/bitstreams/723c85e0-5956-4475-9b82-fc0120a450b9/download https://oarep.usim.edu.my/bitstreams/c59e8ed5-ca07-4336-acc8-d25cfdaf60cf/download https://oarep.usim.edu.my/bitstreams/3cd5e4bd-b80c-4832-b9be-8eeeb1a4490a/download https://oarep.usim.edu.my/bitstreams/aa26f7ac-7806-4830-855f-b28062961b73/download https://oarep.usim.edu.my/bitstreams/30f1ea4a-9120-48f5-a1ce-e9a39ce4387f/download |
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1812444907663523840 |
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my-usim-ddms-133832024-05-29T19:58:01Z Financing to Infrastructure Contractors Using Musharakah Contract in Islamic Banks Indonesia Mohamad Torik Langlang Buana Thirty years since they began operating in Indonesia, the market share of Islamic banks is still small (6%). Additionally, their share of financing to the construction segment is only 7 percent of the industry’s total. It is imperative to identify why Islamic banks are trailing in this segment and to recommend how they may improve their position. The study aims to investigate the current practices and approaches of Islamic banks to finance infrastructure constructors and to propose musharakah as a financing solution. The study also aims to support Indonesia’s Islamic Economy Masterplan. The study, therefore, aims to accomplish three objectives: (1) to investigate the current practices and approaches of Islamic banks in Indonesia to finance construction companies, in particular infrastructure contractors; (2) to identify the reasons for the low share of financing from Islamic banks to infrastructure contractors; and (3) to determine the appropriateness of musharakah contract to fulfil the financing needs of infrastructure contractors. This study is qualitative in nature. Data were collected using semistructured interviews with key personnel of Islamic banks, infrastructure contractors, and an Islamic finance authority to answer the research questions. The study also used secondary data from annual reports, websites, and other relevant documents. The data were analysed using thematic analysis. For the first research objective, the study found that Islamic banks perceived contractors only as a component of the construction process. They have not set infrastructure contractors as their target segment. As a result, Islamic banks and infrastructure contractors have rarely been in a financier-customer relationship. This creates information asymmetry between both parties. For the second objective, the reasons for the low share of financing of Islamic banks to infrastructure contractors include changes in ownership and limited area of operations of some Islamic banks. Additionally, some banks follow the policies set by their parent banks, which do not focus on infrastructure contractors. Most Islamic banks also have not considered contractors as potential customers. For the third objective, it was concluded that musharakah is ready to be used to finance infrastructure contractors. Islamic banks must carry out proper marketing activities so that infrastructure contractors become more aware of the offerings of Islamic banks. The thesis contributes theoretical and practical knowledge concerning musharakah. It also contributes to the knowledge of infrastructure contractors of non-interest-based financing. The findings are expected to be useful for Islamic banks to gain new customers and increase market share. For construction companies, the findings inform them of non-usury financing alternatives. Universiti Sains Islam Malaysia 2023-06 Thesis en_US https://oarep.usim.edu.my/handle/123456789/13383 https://oarep.usim.edu.my/bitstreams/d15ff9d2-a880-436d-85eb-38c6215ff6cd/download a4b1ef34f50523609d9f788cbd49af74 https://oarep.usim.edu.my/bitstreams/974e5be4-3e73-4b80-bdef-654eb59fae54/download 8f4b08ea9c9ebea43f544b8ce1b10c85 https://oarep.usim.edu.my/bitstreams/22336c5c-3c00-4de1-abe5-654dbfbe86b2/download a390570e91f6cd437f516180aca35fbb https://oarep.usim.edu.my/bitstreams/d1a31ac1-2e07-4032-9da8-e34647cb56aa/download 0d5a44f6656c4179596eaef48e0af38f https://oarep.usim.edu.my/bitstreams/1913b188-61cc-4854-9319-2aed75b73414/download 3e45bb3abf427d962d385b0969faa95b https://oarep.usim.edu.my/bitstreams/723c85e0-5956-4475-9b82-fc0120a450b9/download 11c0bbf43b04f86099cdc7d68d467a39 https://oarep.usim.edu.my/bitstreams/c59e8ed5-ca07-4336-acc8-d25cfdaf60cf/download 2df4e8d9da07db3ea36c7bfb6c2e16b3 https://oarep.usim.edu.my/bitstreams/3cd5e4bd-b80c-4832-b9be-8eeeb1a4490a/download 607a267ff20130603ae3bb44d149049f https://oarep.usim.edu.my/bitstreams/aa26f7ac-7806-4830-855f-b28062961b73/download 6563ece758e3b85bbd916ea9fc88a04f https://oarep.usim.edu.my/bitstreams/30f1ea4a-9120-48f5-a1ce-e9a39ce4387f/download 7ff218a228c8615b9602c53fac2f547f https://oarep.usim.edu.my/bitstreams/17efb3f2-f039-4453-8c0a-702c8ae30b5a/download 8a4605be74aa9ea9d79846c1fba20a33 https://oarep.usim.edu.my/bitstreams/71fbd565-1a4b-45c2-9b7b-a516cd6834a4/download 68b329da9893e34099c7d8ad5cb9c940 https://oarep.usim.edu.my/bitstreams/8366a4db-e490-411a-8f77-880f02f6e847/download 7ace4daf1a6ab82dd3ba3f58f3377941 https://oarep.usim.edu.my/bitstreams/8671df12-8e96-4871-bb6f-8b4148273627/download 81001a77c5d903cc664768a9bd6ece35 https://oarep.usim.edu.my/bitstreams/0a964f2e-90fe-4bd5-a034-fb799dab04be/download 20f2d82c2e9ab2493677534267cfba48 https://oarep.usim.edu.my/bitstreams/bc82ed5c-6dd4-469a-a2e4-b2dbc1ae47e7/download fd798bdd22f7feb7a5a01051ca53a44b https://oarep.usim.edu.my/bitstreams/ef98cbec-4198-409b-baa1-00d10bb6e050/download 178a4f09b20d339db34180d14e1263f6 https://oarep.usim.edu.my/bitstreams/bb17dcb9-2dd0-4861-ab0d-80f7a6e8d849/download 8550a01140c06667443cbc54da720c65 https://oarep.usim.edu.my/bitstreams/70c22ce2-5826-4114-b19b-d9e7885b5ebd/download a09b6a4d00f9172b5bc830024a655c5d https://oarep.usim.edu.my/bitstreams/f0783dab-ccff-4c68-bc1f-6d22de3f6c23/download 61bd93374b6089125a165f4ce94e91a0 https://oarep.usim.edu.my/bitstreams/bc64201e-e815-4a5f-ab6f-642d13bf86d8/download a1725539ec30328cf20e023996feb234 Commercial credit -- Indonesia Finance -- Religious aspects -- Islam Banking law (Islamic law) Profit-sharing -- Banking law (Islamic law) Musharakah Contract, Islamic banks |