Search results

Innovation in financing processes, enabled by the advent of new technologies, has supported the development of alternative finance funding tools. In this context, the study analyses the growing importance of alternative finance instruments (such as equity crowdfunding, peer-to-peer (P2P) lending, venture capital, and others) in addressing the small and medioum enterprises' (SMEs) financing needs beyond traditional bank and market-based funding channels. By providing more flexible terms and faster approval times, these instruments are gradually reshaping the traditional bank-firm relationship.

To comprehensively understand this innovation shift in funding processes, the study employs a novel approach that merges three MCDA methods: Spherical Fuzzy Entropy, ARAS and TOPSIS. These methodologies allow for handling ambiguity and subjectivity in financial decision-making processes, examining the effects of multiple criteria, including interest rate, flexibility, accessibility, support, riskiness, and approval time, on the appeal of various financial alternatives.

The study’s results have significant theoretical and practical implications, supporting SMEs in carefully evaluate financing alternatives and enables banks to better identify the main “competitors” according to the “financial need” of the firm. Moreover, the rise of alternative finance, notably P2P lending, indicates a shift towards more efficient capital access, suggesting banks must innovate their funding channels to remain competitive, especially in offering flexible solutions for restructuring and high-risk scenarios.

The study advises top management that SMEs prefer traditional loans for their reliability and accessibility, necessitating banks to enhance transparency, innovate, and adopt digital solutions to meet evolving financing needs and improve customer satisfaction.

The study introduces a novel integration of Spherical Fuzzy TOPSIS, Entropy, and ARAS methodologies to face the complexities of financial decision-making for SME financing, addressing ambiguity and multiple criteria like interest rates, flexibility, and riskiness. It emphasizes the importance of traditional loans, the rising significance of alternative financing such as P2P lending, and the necessity for banks to innovate, thereby enriching the literature on bank-firm relationships and SME funding strategies.

The purpose of this paper is to identify, present and compare agricultural production financing alternatives available to grain producers in South Africa. From the South African perspective, agricultural land cannot always be utilised as collateral and therefore alternative financing has developed.

The study makes use of an exploratory study by applying qualitative techniques. The research population was agricultural finance providers in South Africa and semi‐structured interviews were conducted with representatives of the sample.

The production financing alternatives identified and presented include: grain contract financing; grain contract financing with additional collateral; and corporate farming. A comparison of these alternatives indicates that although the traditional balance sheet financing is a cheaper form of financing, using agricultural land as collateral has a number of limitations, especially within the South African context.

Using agricultural land as collateral to obtain production financing is not always viable considering the present South African agricultural environment. Commercial grain producers should therefore consider the identified alternative production financing.

Limited research on agricultural production finance from the South African perspective has been performed. Furthermore, no previous research on identifying production financing alternatives without utilising agricultural land as collateral has been performed. This paper therefore provides new knowledge by combining South African practice with theory.

Muslim entrepreneurs face various obstacles when starting their business, especially in gaining access to financing. Some financing practices have some Sharia violations, so this paper tries to explore the opportunities and challenges of one financing alternative for Muslim entrepreneurship development in Indonesia that fully complies with Sharia principles. This paper aims to further understand the concept of venture capital and how it relates to Islamic teachings, and the paper ends with the suggestion for future research direction.

This study uses qualitative methods with descriptive and exploratory analysis. A case study approach using semi-structured in-depth interviews with several key informants were conducted to identify the opportunities and challenges for Muslim entrepreneurs in gaining access to Islamic financing. Various literary syntheses are also provided to better understand alternative financing for business development of Muslim entrepreneurs.

Muslim entrepreneurship, depending on their goals and needs in obtaining financing, uses different models in the process of agreements with capital-funding institutions based on Sharia principles. Sharia venture capital is one alternative financing that gives freedom for Muslim entrepreneurs to develop their business based on the Islamic system, without thinking about the requirements that must be met in obtaining access to the financing. However, it seems that this scheme still has relatively low interest, especially from Muslim entrepreneurs because they do not know the information and procedures of Sharia venture capital.

Some policy implications include increasing capital from Sharia venture capital institutions, the role of the government in providing adequate policy support and incentives and broader socialization and education about the existence and importance of developing Sharia venture capital. Practical implications include useful information for Muslim entrepreneurs to address financing issues in their entrepreneurial activities and suggest insights for future research.

This study provides the link of financial access for Muslim entrepreneurs to Sharia venture capital as a new financing business innovation. Thus, it contributes to the literature on Sharia venture capital and Muslim entrepreneurship. The authors also propose some useful recommendations for further research in this field.

This study aims to determine the relationship between the banking industry and home financing by conducting a regression analysis between the mortgage loan interest rates and the number of housing sales, and based on the results of the analysis, this paper proposes a new and alternative interest-free home financing model by directing the savings of the people in pension funds into real estate investment funds (housing fund), specifically established to provide a bank loan-free home financing solution. Diminishing Musharakah (partnership) is also integrated into the model from an interest-free and saving economy perspective. The model developed also provides opportunities to increase the size of the real estate investment funds and provide alternative investment tools to pension funds.

While the global financial crisis resulted from the mortgage crisis in the USA in very recent history, the world has been experiencing the evolution of a new health crisis, COVID-19, a pandemic that has been heavily affecting the global economy in the past two years. The housing sector is among one of the major industries that may be affected by this new global crisis because of the high dependency of the current home financing models on the banking industry, which is carrying the burden of the pandemic. The rapid increase in global debt volume, housing prices, inflation and interest rates are observed as bad signs that may increase the risks of the housing industry. A potential decrease in purchasing power because of high inflation rates may decrease the welfare of people and reduce the income level. While the total debt keeps increasing worldwide, and central banks are considering increasing the interest rates, any potential default in the repayment of the mortgage loans may trigger a new mortgage crisis as the bank loan-dependent financing system of the housing industry lacks alternatives. Thus, a relationship analysis between the banking and housing sectors is required to figure out the dependency of home financing on the banking industry, and a new sustainable home financing model is needed to protect the housing industry and the homebuyers from a negative effect of a new possible financial crisis.

The results of the analysis exhibit that there is a strong negative relationship between the mortgage loan interest rates and the total home sales. As a result, the new model is suggested and this new model is tested in an emerging country, Turkey, with the real housing sector and economic data where the interest rates are high and the home prices are booming. The results exhibit that the new interest-free home financing model provides a more economic financing solution compared with the high financing costs of bank loans.

The model proposed in this study is unique, and there is no such system that has integrated the pension funds, the real estate investment funds and diminishing partnership in one ecosystem. It is expected that the model may decrease the dependency of home financing on the banking industry and decrease the risks of the housing sector in the case a new financial crisis occurs.

While providing a sustainable and alternative interest-free home financing tool, the model also provides individuals who do not prefer to use any bank loan because of religious or other concerns an opportunity to purchase their houses.

The model proposed in this study is a unique and original model that aims to provide a bank loan-free, sustainable home financing solution by integrating the pension funds, real estate investment funds and diminishing partnership in one ecosystem.

This study investigates the significance of trade credit (TC) as an alternative source of funding in financing the growth of financially dependent firms.

Panel data analysis using the difference generalized method of moments (GMM) and fixed-effects ordinary least squares (FE-OLS) is conducted on annual data from publicly listed firms across a number of developing economies. The data cover the period from 2003 to 2019.

The findings indicate that financially dependent firms rely on TC to manage their growth, especially when they have exhausted their debt capacity. This dependence on TC displays a cyclical pattern. As firms enhance their financial position, they tend to scale back their dependence. Nevertheless, firms with significant growth opportunities continue utilizing TC for at least two years after their initial identification as financially dependent.

The author's conclusion highlights that TC can be a valuable and accessible source of funding, especially in developing economies where the real sector may require alternative financing channels. Hence, TC has the potential to play a very significant role in financing corporate growth in these economies.

The current study adds to the existing body of literature by revealing that access to alternative sources of finance is also critical for firms that are dependent on external sources and for firms that have exhausted their financial debt capacity.

This paper aims to review and compare the conventional and Islamic perspectives of working capital management (WCM) to devise the best option of financing for managing working capital (WC) in South Asia. The paper also aims to help the business world for running its operations more smoothly by devising an alternative source of financing especially during crises such as the global financial crisis 2008 and the COVID-19 pandemic.

The divergence approach is used for a critical analysis of existing literature to derive the best possible alternative to the conventional system of financing.

This paper identifies that Islamic financing is an appropriate mode of financing as compared to conventional financing for meeting WC requirements in South Asia. Furthermore, under Islamic financing, the best available alternative way for managing WC needs is the Mudarabah Islamic mode of financing.

This is a theoretical paper and thus does not include empirical results.

This paper provides conventional and Islamic perspectives of WCM. The Islamic banks in South Asia may devise policies to encourage and convenience firms for using Mudarabah mode for meeting their WC needs instead of conventional sources. This paper also identifies that small and medium enterprises may be targeted by Islamic banks in Asian markets for providing funds for their smooth operations especially during a financial crisis when conventional banks refuse to lend. This will help managers to run businesses more efficiently and effectively especially during any kind of financial crisis in the future.

To the best of the author’s knowledge, this is the first study that studies the relationship between WCM and Islamic financing in comparison to conventional financing. Although prior studies identify an alternative to conventional financing as Islamic financing, no one studied while considering the WC as the main variable. This paper informs practitioners and researchers about a “state of the art” Islamic perspective of WCM.

This study aims to investigate the house purchase behavior of low‐income Saudis regarding the sources of financing they wish to have access to, their preferences for alternative financing options, and the monthly payment amounts they could afford to make in case of mortgage financing across demographic groups.

A survey with a sample of 815 low‐income respondents with a monthly income of SR7,000 was conducted using a structured questionnaire.

The main findings of the study are that the loan from the government Real Estate Development Fund (REDF) is found to be the most preferred financing alternative, the second being cash payment; whilst the most frequently indicated option for monthly mortgage payments is between SR1,000 and SR1,500 (US$267 and US$400) among low‐income Saudis.

This study provides a snapshot of low‐income Saudi consumers' knowledge of financing options and their choice among alternative financing options.

This also offers opportunities for real estate developers to seek competitive advantage by coming up with innovative financing options to target low‐income earners.

There is limited published work exploring consumer knowledge of house purchase finance options that captures this phenomenon from the perspectives of low‐income Saudi consumers. This study contributes in filling this gap.

The study explores how the intention to export affects financing and non-financing variables for small and medium-sized enterprises (SMEs) in a low-income country (LIC). The objectives of this study are (1) to discern between regional and global exporting and (2) to evaluate its policymaking implications.

Primary survey data were collected from 330 Rwandan SMEs and were analysed using ordered logistic models as an application of the expectation-maximisation iterating algorithm, which was tested for robustness using a sampling model variation.

The results show that alternative sources of finance are the predominant choice to finance the intention to export within and outside Africa. As the scope of export intentions broadened from regional to global, there was a shift in preferences from less formal to more formal lending technologies, moving from methods like factoring to lines of credit. Moreover, reliance on bank officers became more significant, with increasing marginal effects. Finally, the study determined that government financing schemes were not relevant for SMEs pursuing either regional or global exporting.

Whilst alternative sources of finance predominate the export intentions of Rwandan SMEs, establishing a robust banking relationship becomes crucial for global exporting. Despite this implication, the intention to export should prompt more transparent communication regarding government financial support programmes. There is an opportunity for increased usage of relationship lending to customise support for SMEs involved in exporting, benefiting both the private and public sectors.

This study accentuates how export distance alters SME financing priorities. The results also contribute to understanding how the value of relationship lending changes when less familiar markets (i.e. global exporting) are the objective. Moreover, the study offers a new perspective on how institutional voids affect entrepreneurial financing decisions in LICs.

This study proposes the integrated Qardhul Hasan and equity-based microenterprise development (IQEMD) model, a financial model for microenterprises in Muslim nation such as Afghanistan. This study aims to overcome the significant challenges these businesses face in securing financial resources, offering a tailored, sustainable solution to enhance their operations.

This study collected primary data via a survey from 466 microentrepreneurs in Kandahar, Afghanistan. Data analysis was performed using partial least squares with SmartPLS 4 software. The study’s validation of the proposed financial model among microenterprises was grounded in the theory of reasoned action, ensuring a solid theoretical basis for its findings.

The findings of this research revealed that the attitudes and subjective norms of Afghan microentrepreneurs positively influence their intention to use IQEMD Model. These findings provide important guidance for financing ventures and policymakers, highlighting the IQEMD model’s potential to improve financial strategies and practices for microenterprises in Afghanistan.

This study focuses solely on microenterprise development in Afghanistan, with its sample size and study area being clear constraints. Therefore, caution is advised when interpreting the results, which may not be broadly applicable. The reliance on current factors may also restrict the exploration of other important determinants affecting microenterprises’ behavioral intentions toward using the IQEMD model. Future research should consider incorporating new factors to optimize the IQEMD model and include interviews with more stakeholders to increase its validity.

The findings of this paper offer microenterprises an alternative source of financing to start or expand their businesses. This study holds implications for government and policymakers. By incorporating a nonprofit organization as suggested in this model, it assists the government in reducing expenditures associated with the development of microenterprises.

This study is a pioneering effort in merging Qardhul Hasan and equity-based financing for microenterprise development. It significantly contributes to existing research by underscoring the effectiveness and impact of such financing as a viable source for these enterprises. These strategies could notably boost productivity, employment and gross domestic product growth. The study enhances understanding of alternative financing models in the microenterprise sector.

The objective is to address financing challenges with an innovative technical approach and provide financial support to facilitate the sustainable development of characteristic tourist towns.

In this study, a novel decision model is proposed, which utilizes the CRITIC improved G1 weighting method to analyze financing factors and applies GRA to enhance the TOPSIS model under a Z-Number fuzzy environment. Finally, sensitivity analysis and comparative assessment were conducted to validate the findings and the model.

The findings indicate that equity financing is the optimal mode of financing for characteristic tourist towns, with bond financing serving as a viable alternative. Key factors influencing financing include economic benefit, social benefit and policy risk. Managers should carefully consider these factors when selecting financing methods in order to enhance efficiency and mitigate risks.

As a new business model and value creation method of cultural and tourism integration, the financing decision of a characteristic tourism town has always been the key to the overall promotion and operation. The research constructs a financing index system for characteristic tourism towns based on benefit and risk considerations, using the hot spring town in Anhui Province, China, as a case study to evaluate eight financing models.