The Role of Musharakah in the Economic Development of Tehsil Dargai, District Malakand, Khyber Pakhtunkhwa, Pakistan

##plugins.themes.academic_pro.article.main##

Suhail Ahmad
Ejaz Aslam
Prof. Dr. S. Ghiasul Haq
Prof. Dr. Mohd Ma'Sum Billah

Abstract

Islamic finance industry has been growing for the last twenty years, both in Muslim and non-Muslim countries around the world. There are different modes of Islamic finance which provide job opportunities across the globe. In Pakistan, the contemporaneous growth of Islamic banking and finance is not different from other countries. Islamic banking and finance does not only provide employment for individuals, indeed it also offers various products and services to customers across the country. Musharakah is a form of business in Islamic finance that is being adopted rapidly by most of the customers in Islamic banking and finance institutions. Therefore, the purpose of this study is to examine the role of Islamic finance, mainly how Musharakah is playing its due role in creating employment and maintaining sustainable development projects which in turn are causes of the development of the economy, particularly of Tehsil Dargai. For this purpose, this study collected data through a questionnaire that was randomly distributed among 100 respondents in Tehsil Dargai, District Malakand, Khyber Pakhtunkhwa (KP), Pakistan and the response rate was 60%. We found that Islamic finance is rapidly growing in Dargai; indeed, people are practicing different modes of Islamic finance and Musharakah is the most popular form of Islamic finance in this area. This study utilizes limited data because it was only conducted in Dargai.

##plugins.themes.academic_pro.article.details##

References

Ahmad, S. (2017). Practice of Shariah audit in Isalmic Banking in Pakistan. Journal of Islamic Economics, Banking and Finance, 13(2), 102–127.
Ahmad, S., Amjad, M., & Aslam, E. (2018). Types of Interest in Islamic Law Analysis and Application. Pakistan Journal of Islamic Research, 18(2), 168–170.
Anwar, M., & Haque, Z. (1991). The role of Islamic financial institutions in the socio-economic development in Malaysia [with Comments]. The Pakistan Development Review, 30(4), 1131–1142.
Aslam, E., Ijaz, F., & Iqbal, A. (2016). Does Working Capital and Financial Structure Impact Profitability of Islamic and Conventional Banks Differently? Islamic Banking and Finance Review, 3(1), 50–67.
Ayub, M. (2016). Running Mushārakah’by Islamic banks in Pakistan: Running from Mushārakah or moving back to square one [Editorial]. Journal of Islamic Business and Management, 6(1), 7–18.
Ayub, M. (2017). Critical review liquidity management by Islamic banks: An issue or a contrivance for risk-free returns. Journal of Islamic Business and Management, 7(1), 1–10.
Bhatti, M. K. A. M. I. (2008). Developments in Islamic banking:The case of Pakistan (Palgrave Macmillan Studies in Banking and Financial Institutions). Hampshire: Macmillan.
Dahir, A. M., Osman, A. M., & Ali, A. A. (2015). Importance of principles of Islamic Jurisprudence (Usul fiqh) in Islamic banking product structuring. Mogadishu: Simad University.
El-Ghattis, N. (2011). Islamic banking's role in economic development: Future outlook. Bahrain: Centre of Islamic Finance, Bahrain Institute of Banking.
Farooq, M., & Ahmed, M. M. M. (2013). Musharakah financing: Experience of Pakistani banks. World Applied Sciences Journal, 21(2), 181–189.
Hussain, M. M., Shahmoradi, A., & Turk, R. (2015). An overview of Islamic finance(Working Paper). New York: International Monetary Fund.
Ismail, C. A. A. G. (2010). Shariah parameters for Musharakah contract: A comment. International Journal of Business and Social Science, 1(1), 145–162.
Khan, M. A. (1990). Glossary of Islamic economics.London: Burns & Oates.
Khan, S. A., & Aslam, E. (2018). Partnership Based Microfinance in Islamic Banks: Need, Application and Commandments in Modern Age. Journal of Islamic Thought and Civilization, 8(1), 192–208.
Mahmood, M., Khan, S., Ijaz, F., & Aslam, E. (2014). Determinants of Profitability of Islamic Banking Industry : An Evidence from Pakistan. Determinants ofProfitability of Islamic Banking Industry: An Evidence from Pakistan, 6(2), 27–46. https://doi.org/10.1016/j.soildyn.2016.11.015
Mersch, Y. (2010). Prospects of Islamic finance–The view of a Central Bank in Europe. Paper presented at the Islamic Finance Conference, Frankfurt, Germany.
Muhammad, A. M. (2014). Critical analysis of some of the major internal hindrance factors in the application of Musharakah financing by the Islamic banks. International Journal of Education and Research, 2(9), 125–142.
Pratiwi, A. (2016). Islamic banking contribution in sustainable socioeconomic development in Indonesia: An epistemological approach. Humanomics, 32(2), 98–120.
Rahman, N. H. A. (2017). The role of Islamic banks in enhancing SMEs' access to financing via Musharakah financing. Journal of Islamic Finance, 6(1), 042–050.
Rashid, K. H., Amin, N.,&Samina, Q. S. (2017). Shariah compliant companies in Bangladesh. Journal of Islamic Economics,Banking and Finance, 13(2), 128–143.
Saleem, S. (2007). Role of Islamic banks in economic development: A Working paper exploring the meaning of Development in Islamic perspective and suggestions regarding possible utilization of Islamic banking for development of Pakistan(MPRA Paper No.7332, p. 1–78). Retrieved from https://mpra.ub.uni-muenchen.de/7332/
Usmani, M. T. (2002). An introduction to Islamic finance.Karachi: Maktaba Ma‘arif ul Quran.