Islamic Finance for SMEs in Jordan 1978-2014

ABSTRACT: Small and Medium Size enterprises (SMEs) are considered an essential yield for both social and economic development of countries around the world. The purpose of this study is to identify the role of Islamic banks and Islamic financial institutions in financing the development of SMEs in Jordan. The study revealed that the Islamic finance for SMEs is sufficient. It is also concluded that Islamic banks focus on increasing investors‟ profits, eliminates society‟s inequalities and improve general standard of living and playing a significant role in social welfare. In addition the study indicates that the Islamic bank‟s approval time for funding application does not take longer than the conventional financial institutions. Consequently, clients select Islamic banks and Islamic financial institutions for funding because of the simplicity and because they comply with Islamic laws. Whether Islamic banks contribute a great deal to the economic and social development of the country or not, it is suggested that Islamic banks and Islamic financial institutions must focus more on the SMEs. The researcher also recommends more funding to SMEs which would lead to increase in production and will contribute in the development of the economy. Primary and secondary data is used to analyze the research question. Key words: Islamic finance, SME finance, Jordan. …………………………………………………………………………………………………………………………