Omar Masood

Selection criteria for Islamic home financing: a case study of Pakistan

Purpose – The aim of this research is to examine the selection criteria of customers for Islamic home financing in the context of Pakistan and to examine these factors with respect to gender, age, income, and occupation.Design/methodology/approach – This study uses a quantitative approach to investigate the choice criteria for Islamic home financing. All 18 independent variables are taken from previous research; for their analysis, descriptive statistics, independent sample t‐tests and ANOVA was used. Data were gathered from the customers of Islamic banking who use the services of Islamic home financing. The sample consists of 200 respondents. For the collection of data, a survey questionnaire with closed‐ended questions and a five‐point Likert scale was employed. The questionnaire was designed into two sections, one consisting of demographic information and the second relating to the selection criteria of Islamic home financing.Findings – The results indicate that the shariah principle, fast and efficien...

Why do customers patronize Islamic banks? A case study of Pakistan

Purpose - The purpose of this paper is to determine the selection criteria for Islamic banks employed by customers in a dual banking system, as in the case of Pakistan, and to know the overall satisfaction of the customers with Islamic banks. Design/methodology/approach - This is a survey-based study conducted on the primary data collected through structured questionnaire. In total, 23 variables are identified from the literature which are reduced to eight main variables by using factor analysis in SPSS. Data are gathered from 200 customers of full-fledged Islamic banks in Pakistan, i.e. Meezan bank, Bank Islami and Dubai Islamic bank, Al-Baraka Islamic bank, Burj Bank Ltd The data have been analyzed in two models: the first includes the selection criteria according to gender; the second includes the overall customers preferences for selection criteria. Findings - The results reveal that the most important factors are “Religious factors” and “Convenient location” that customers consider while selecting an Islamic bank. Other important factors include “Secure feeling” by customer, “Quality related issues” and “Efficiency of bank”. Research limitations/implications - The data used in this study are limited, so the generalization of the results is not possible. Also the study is conducted on the full-fledged Islamic banks and it has ignored the Islamic Windows. Practical implications - Considering the importance of the topic, this research has identified the selection criteria that are considered by the customer while selecting an Islamic bank. It will help banks to improve the criteria said and considered by customers while selecting a bank. This research will be of interest to both serving banks and potential entrants into this niche market. Originality/value - The literature shows that patronize factors of Islamic banks are an under-researched area in Pakistan. So, this paper will contribute to the body of knowledge by identifying the Islamic banking selection criteria considered by the customers.

Islamic banking: a study of customer satisfaction and preferences in non-Islamic countries

The analysis of their responses revealed a certain degree of satisfaction of many of the Islamic banks facilities and products. The respondents expressed their dissatisfaction with some of the Islamic banks services. Although the respondents indicated that they are aware of a number of specific Islamic financial products like Murabaha, Musharaka and Mudaraba, they show that they do not deal with them.

An analysis of the growth and rise of smaller Islamic banks in last decade

Purpose - The purpose of this paper is to analyse the factors responsible for the rise and growth of smaller Islamic banks in the last decade. Design/methodology/approach - javax.xml.bind.JAXBElement@72d51e31 Findings - The results of this paper show higher Originality/value - Islamic banking represents a radical departure from conventional banking, and from the viewpoint of corporate governance; it embodies a number of interesting features since equity participation, risk and profit-and-loss sharing arrangements form the basis of Islamic financing. Using econometric techniques, this paper provides valuable insights as to the stability of Islamic banks and the factors responsible for the growth of smaller such institutions that has been witnessed in the last decade.

Credit risk management: a case differentiating Islamic and non-Islamic banks in UAE

Purpose - The purpose of this paper is to identify any differences between the Islamic and non-Islamic banks in the UAE on credit risk management. Design/methodology/approach - The study uses survey based methodology for data collection. The sample for the study consists of six commercial banks from UAE with three non-Islamic and three Islamic banks and with 148 credit risk managers as respondents for the survey. The study aims to investigate factors which distinguish between Islamic and non-Islamic banks in UAE. This is achieved by fitting a binary logistic regression model. Findings - The study shows that the managers in Islamic banks now do not rely only on personal experiences and simple credit risk analysis. The Islamic banks appear also to be developing and practising the newer and robust techniques, in addition to traditional methods, to manage their credit risk in UAE compared to non-Islamic banks, which indicates a possibility of further improvement in their credit risk management. Originality/value - The paper uses questionnaire-based methodology, which has not been used previously in the UAE financial sector, as well as in studies of credit risk management. Therefore, this research could become the cornerstone of further academic research in other developing countries using this methodology.

The investment decision-making process from a risk manager's perspective: a survey

Purpose - The purpose of this paper is to identify associations between various inputs in the investment decision process of Saudi Arabian risk managers (RMs). Design/methodology/approach - The paper reports the views of 81 RMs in Saudi Arabia regarding their approach to investment risk and uses these as inputs into conditional independence graphs. Findings - Saudi RMs favour their experience and personal judgment over mathematical projections and statistical models when considering investment risk. A need remains for an efficient risk-modeling framework for the banking system that has more practical value than those which have emerged to date. Originality/value - The paper provides novel insights on issues such as the extent to which risk management is dealt with in practice via personal experience rather than statistical-based projections. The findings also shed light on the level of satisfaction amongst RMs and regulators with the incentives provided in the Saudi Arabian environment, and the importance placed on guidance from the nations leading regulatory institution.

Quantitative measurement of economic sectors effect on the non-oil GDP in United Arab Emirates

This study aims to identify the impact of the economic sectors in the UAE on the non-oil GDP. We analyse the statistical data depending on Arithmetic Means, Correlation Coefficients, and Regression Analysis to test the validity of the proposed statistical model, and to find the impact of independent variables (economic sectors) on the dependent variable (non-oil GDP). The findings of this study revealed that we were able to build a statistical model for the economic sectors and the non-oil GDP, to analyse the economic indicators of the UAE during (1970-2006).

Determinants of non-performing loans and banking costs during the 1999-2001 Turkish banking crisis

Using original survey data collected by the authors we investigate the determinants of non-performing loans and costs in the Turkish banking sector during the crisis period of 1999-2001. Employing ordered choice models, we find that variables measuring unnecessary government intervention and loans given to related companies significantly influenced both non-performing bank loans and the overall cost of the crisis. Poor credit risk assessment and a weak capital base of Turkish commercial banks have also led to a high percentage of non performing bank loans, whereas improper accounting practices, under capitalisation of Turkish banks, as well as weak regulation/supervision have been identified as variables which added to the high cost of the crisis.

How political risks and events have influenced Pakistan's stock markets from 1947 to the present

In this paper, we analyse Pakistans political risks and events that have affected the countrys stock markets since 1947. We collected data in the form of questionnaires from historians, economists, politicians, government officials, bankers and stock market analysts in Pakistan and make forecasts using Bayesian hierarchical modelling and Markov Chain Monte Carlo (MCMC) techniques. Findings show that the probability of an event in any year is relatively high with an average arrival rate of 1.5 events per year with no time trend. In addition, forecasts suggest that the level of political risk should be remaining unchanged for the foreseeable future. Finally, we find that Pakistans political risk carries a risk premium of between 7.5% and 12%.

Measuring risk and financial support for NPPs using Monte Carlo simulation

Purpose - The purpose of this paper is to work out the risk of cost overruns in nuclear power plants (NPPs) and its mitigation through public financial support. Design/methodology/approach - The stochastic process of overruns is simulated and compared with the private company investment to work out the amount of subsidy. Findings - At higher levels of risk proportionately more public finance is sucked in. Research limitations/implications - International comparison would be valuable. Practical implications - The paper could provide useful guidance in developing countries regarding how to work out the public or international subsidy. Social implications - People may justifiably resist the public subsidy for a foreign investor. Originality/value - The original calculation using Matlab will certainly be of value.