This study explores how Islamic Finance Modes can provide alternative
sources of financing business models in a circular economy. A comparative
analysis of the Islamic Finance Modes such as Musharakah, (Equity Sharing),
(Mudarabah), (Silent partnership), Forward sale (Salam), Manufacturing
Financing (Istisna), Leasing (Ijarah), Sukuk (Investment Certificate), Qard
Hassan (Beneficence Loans), Wakalah, (Agency contract) Kafalah (Suretyship
Contract), and Ju’ala (Service Agency) were undertaken in relation to its
suitability as a source of financing businesses in a circular economy. This study
relies heavily on secondary data through literature reviews and research works
of authors and researchers on Islamic Finance and Circular Economy. The
study concludes that Ijarah, Sukuk, Qard Hassan, Istisna, Musharakah,
Mudarabah, Wakalah, Kafalah, and Ju’ala financing modes are essential for
providing alternative solutions to financing challenges confronting business
models such as balance sheet extension, working capital, and increased credit
risk in a circular economy. This paper recommends that Islamic Banks should
review and redesign their products and services in order to cater for financing
businesses in a circular economy and also support them by providing
professional services in analyzing the creditworthiness of companies and
viability of projects.
Ismaila, A. (2021). A Literature Review on Islamic Finance Modes as an Alternative Approach to Finance the Business Model of a Circular Economy. Afribary. Retrieved from https://afribary.com/works/a-literature-review-on-islamicfinance-modes-of-financing-circular-economy
Ismaila, Akintan "A Literature Review on Islamic Finance Modes as an Alternative Approach to Finance the Business Model of a Circular Economy" Afribary. Afribary, 04 Nov. 2021, https://afribary.com/works/a-literature-review-on-islamicfinance-modes-of-financing-circular-economy. Accessed 23 May. 2022.
Ismaila, Akintan . "A Literature Review on Islamic Finance Modes as an Alternative Approach to Finance the Business Model of a Circular Economy". Afribary, Afribary, 04 Nov. 2021. Web. 23 May. 2022. < https://afribary.com/works/a-literature-review-on-islamicfinance-modes-of-financing-circular-economy >.
Ismaila, Akintan . "A Literature Review on Islamic Finance Modes as an Alternative Approach to Finance the Business Model of a Circular Economy" Afribary (2021). Accessed May 23, 2022. https://afribary.com/works/a-literature-review-on-islamicfinance-modes-of-financing-circular-economy