Review Essay Yousif Ashour Since the start of the Islamic banking industry many questions have been raised about Islamic finance policies used by Islamic banks and their long-term finance programs. The most interesting questions on Islamic finance policies are those related to rnurabaha finance. The argument concerning rnurabaha has two sides, one for and the other against. The questions normally are concentrated on whether Islamic banks should use rnurabaha in their finance, and whether Islamic banks heavily depend on it in their finance. The aim of this article is to exam- ine the importance of rnurabaha compared to other Islamic finance policies in long-term finance programs in the Islamic banking industry. The article suggests that rnusharaka and rnudaraba are as important as rnurabaha in financing long-term programs in the Islamic banking industry. Definitions In Islam, there is no interest on loans; Islamic banks use Islamic finance policies to finance programs. Perhaps, however, it is more reasonable, before going any further, to briefly define these policies: mushuruka, mudurubu, murubuhu, and muzuruha (collectively referred to as 4M). Mushuruka is an Arabic term which simply means “partnership.” An Islamic bank becomes a partner in a project. In this form of Islamic finance all partners share the project financing. The partners do not need to have equal shares; however, the contributed capital should be known and speci- fied. An Islamic bank is a partner and owner of the mushuruka project, so Yausif Ashour is Assistant Professor in the Department of Management at the Islamic University of Gaza in Palestine. 88 The American Journal of Islamie Social Sciences 16:4 the bank should take an active part in controlling the project side by side with other partners. A musharaka project can take one of the following forms: a permanent musharaka in which there is no time limit stated in the contract; a timed musharaka in which the project ends at a certain time; and a musharaka in which a bank agrees to sell its share to the other parties either gradually or at a specified time in the future. The methodological principle is to finance the project and then sell the bank shares to the other partners. Mudaraba is an Arabic term which means “equity finance” and is based on sharing the profit or loss of a project. Sometimes it is considered a com- pany’ or specific form of musharaka. In mudaruba, the entrepreneur does not have funds but has a program idea and management expertise. He/she asks an Islamic bank to finance this program while the entrepreneur’s,con- tribution is labor? Profits are distributed according to an agreed ratio and if losses are suffered, the entrepreneur loses the value of hisher labor and the bank loses its funds.3 Murabaha is an Arabic term which means “resale with specification of gain.”4 Most murabaha practices are related to purchase orders. An Islamic bank buys a product, normally at the request of a client, who promises to buy it from the bank. The bank takes the risk while it owns the pr~duct .~ The bank then sells the product to the client. If the payment is not made at the establishment of the agreement, it becomes a debt and it is treated as a normal debt. Muzaraha is an Arabic term which means “crop sharing.” The major components of the muzaraha contract are land, labor, and others things such as seeds6 I n t rod uc t i OR The Islamic finance policies - musharaka, mudaraba, murabaha, muzaraha (4M), and a few others - are not used by the Islamic banks with the same frequency. By and large Islamic banks use murabaha heavily? What is more, murubaha is considered to be the backbone of finance in the Islamic banking industry.g This implies that Islamic banks rarely use musharaka, although it is generally agreed among Muslim economists9 that musharaka is the most effective Islamic finance policy, to the extent that Islamic banks are often called musharaka banks.l0 Musharaka is very suit- able for long-term and development programs,ll and there is no controver- sy over whether it is lawful from the Shari’ah point of view. Ashour: The Importance of Murabaha in Long-Term Finance 89 However, the questions arising over Islamic finance policies in general, and murubuha in particular, are of special importance in the Islamic bank- ing literature.12 While enormous theoretical explanations, speculations, and arguments have been made about these policies, they have never been empirically examined in long-term finance programs in the Islamic bank- ing industry. The question whether murubuha is purely an Islamic finance policy is beyond the scope of this paper; however, there are many opinions which say that there is no doubt that murubuha is an Islamic finance policy and is not against 1~1am.l~ Homud,14 who describes murubuha as the backbone of long-term Islamic financing, does not specify exactly what the term “backbone” means nor does he examine it empirically. Moreover, the other writers15 who state that murubuha is used heavily by Islamic banks do not specify any quantitative measures for their arguments. This article attempts to empirically examine the importance of murubaha in long-term finance programs in the Islamic banking industry. The main argument is that murubuha is the most important long-term finance policy in the Islamic banking industry. To accept or reject this argu- ment, however, four hypotheses will be analyzed and tested. The analysis will focus on murubuhh compared to the other Islamic finance policies. Hypothesis 1: Murabaha is the most popular policy in the applica- tion to long-term finance programs and Islamic banks rarely use the other Islamic finance policies. Hypothesis 2: Islamic banks invest a higher proportion of their long- term finance resources in long-term finance murabaha programs than long-term finance musharaka, mudaraba, and muzaraha pro- grams. Hypothesis 3: Islamic banks are involved in a higher degree in long- term finance murabaha programs than long-term finance mushara- ka, mudaraba, and muzaraha programs. Hypothesis 4: Murabaha is the least risky amongst the 4M Islamic fiance policies in terms of getting the finance back. Therefore, it is expected that the Islamic banks require lower rate of return on long- term finance murubaha programs than the rate of return on long-term finance musharaka, mudaraba, and muzaraha programs. 90 The American Journal of Islamic Social Sciences 16:4 The results of testing these hypotheses will determine whether one poli- cy, murubuha, is the backbone of long-term finance in the Islamic banking industry. Met hod A questionnaire was designed as a research instrument (see Appendix) and mailed to 41 Islamic banks around the world. Answers were collected from 34 Islamic banks (a response rate of 83 percent). Enormous problems were encountered in collecting the data. It took about two years to collect the required data (1991 and 1992). Independent loglinear models were used in the analysis. Table 1 shows where the surveyed banks’ headquarters were located. Three countries (Sudan, Iran, and Pakistan) are especially important in the Islamic banking sample. These countries are undertaking Islamization processes in their economies. Table 1. Banks’ Headquarters by CountriedRegions Jordan The Gulf States Sudan Remaining Arab States Iran Pakistan Other Countries Total b 1 10 5 4 5 6 2 34 5 2.9 29.4 14.7 11.8 14.7 17.6 8.8 100.0 Table 2 shows the surveyed banks’ age. (Banks that have been operating for more than 21 years are converted banks and located mainly in the three countries: Sudan, Iran, and Pakistan.) Table 2. Islamic Banks Classified by Years in Operation 4!km=d w10 11-20 21-30 More than 3 0 Total &. 14 14 1 9 34 - % 41 41 3 _LT 100 Ashour: The Importance of Murabaha in Long-Term Finance 91 Table 3 shows the surveyed banks' capital in 1991. Table 3. Islamic Banks Classified by Their Capital in 1991 Capital (Millions) $00&50m 11 $50-749m 10 $750 and Above 7 Missing Data 4 Total 34 - % 32 29 21 _19. 100 The Application of 4M in the Islamic Banking Industry The analysis will include 4M use in long-term finance programs (LTFP); 4M and long-term finance (LTF) ratio; 4M and contribution ratio; 4M and rate of return; and a summary of results. The Use of 4M The aim of this subsection is to examine the use of 4M Islamic fiance policies (IFF') in LTFP in the Islamic banking industry (i.e., Hypothesis 1). Table 4 represents a two-variable loglinear model examining Islamic finance policies (i.e., 4M with four categories) and the use/non-use of the policy with two categories. This table also shows the Islamic fiance poli- cies classified by their observed number and expected number in each use/non-use category. One hundred and thirty-six weighted cases are used in the analysis. Table 4. IFF Classified by Use in LTFP in the Islamic Banking Industry Musharaka Use No use Mudaraba USe No use Murabaha USe No use Muzaraha Use No use Observed No. & I%) 27 (19.85) 7 (5.15) 23 (16.91) 11 (8.09) 28 (20.59) 6 (4.41) 14 (10.29) 20 (14.71) Expected No. & (%l 23 (16.91) 11 (8.09) 23 (16.91) 11 (8.09) 23 (16.91) 11 (8.09) 23 (16.91) 11 (8.09) Adj. Resid. 1.6932 - 1.6932 O.oo00 O.oo00 2.1165 -2.1165 -3.8097 3.8097 Goodness-of-fit test statistics Likelihood ratio chi-square = 16.08611, df = 3, p = .001. The American Journal of Islamic Social Sciences 16:4 The observed significance level associated with chi-square is = 0.001; hence, the independence model that the finance policies do not influence their use in the long-term finance programs is rejected. In other words, the analysis of this model suggests that type of policy influences its degree of application to long-term finance programs. The foregoing analysis is supported by the high adjusted residual between the observed and expected numbers of some categories in the model Table 4 as follows: MWUbuhU A higher than expected number of Islamic banks used murubuha, result- ing in a high positive adjusted residual (2.1 165), which is contrary to the non-use category, where a less than expected number of Islamic banks avoided using murubuhu, resulting in a low negative adjusted residual (-2.1 165). The absolute numerical value of the adjusted residual exceeds 2, suggesting that there is an important discrepancy between the observed and expected numbers of the two categories. The analysis of murubaha categories (on the basis of the independence model) reflects the fact that a higher number of Islamic banks than expect- ed prefer to employ murubuhu in their long-term finance programs. Muzuruhu The observed number of Islamic banks that do not use muzuruhu is high- er than expected, resulting in a high positive adjusted residual (3.8097), contrary to the use of the policy where a lower number of Islamic banks than expected use it resulting in a low negative adjusted residual (-3.8097). The absolute numerical value of the adjusted residual exceeds 2, suggest- ing that there are important discrepancies between the observed and expect- ed numbers of the two categories. The analysis of long-term fmance muzuruhu programs (on the basis of the independence model) reflects the fact that a higher number of Islamic banks than expected do not employ muzuruhu in their long-term finance programs. Summary It seems that (1) a smaller than expected number of Islamic banks do not use murubuhu in their long-term fmance programs; (2) a larger than expect- ed number of Islamic banks prefer to use murubuhu in their long-term linance programs; (3) a larger than expected number of Islamic banks do not use muzuruha in their long-term finance programs; (4) a smaller than expected number of Islamic banks use muzuruhu in their long-term finance Ashour: The Importance of Murubaha in Long-Term Finance 93 programs; (5) otherwise, there is no significant difference in the employ- ment of any of the 4M (i.e., musharuku, mudarubu, murubuhu, and/or muzuruhu) to long-term finance programs in the Islamic banking industry. This analysis leads to the conclusion that Islamic banks vary in the employment of 4M in their LTFP. However, murubuhu does not seem to be the most used finance policy while the other policies are rarely used. It seems that muzuruhu, for reasons that will be discussed later, is the least used. But there is no significant difference in the use of musharuka, mudarubu, and murubuhu in LTFP in the Islamic banking industry. Therefore, it seems reasonable to reject the hypothesis that murubuhu is mainly used. BM and LangTerm Finance Ratio Long-term finance 4M ratio is the ratio of long-term finance mushuruku, mudarabu, murubuhu, or muzuruha to total long-term finance, e.g., long- term fmance mushuruku ro total long-term finance. The aim of this subsection is to examine the long-term finance mushuru- ku, mudarubu, murubuhu, and muzuruhu (4M) policies in relation to total long-term finance in the Islamic banking industry (i.e., Hypothesis 2). Table 5. Islamic Finance Policies Classified by Their Annual LTF Ratio MkY Mwharaka 0-308 3140% 61-100% Mudaraba 0-3096 3140% 61-1W% Murabaha 0-30% 3140% 61-100% Muzaraha 0-3096 3140% 61-1W Observed No. & [%) 16.00 (17.39) 10.90 (11.85) 0.10 (0.11) 11.00 (11.96) 8.00 (8.70) 4.00 (4.35) 6.00 (6.52) 10.00 (10.87) 12.00 (13.04) 10.00 (10.87) 3.00 (3.26) 1.00 (1.09) G.+ess-of-fit tes! statistics Lkellhoad ratio chl-square = 25.11658, Expected No. & (%) ,df=6, 12.62 (13.72) 9.36 (10.18) 5.02 (5.45) 10.75 (11.68) 7.97 (8.67) 4.28 (4.65) 13.09 (14.22) 9.71 (10.55) 5.20 (5.66) 6.54 (7.11) 4.85 (5.28) 2.60 (2.83) P= .Ooo. Adi. Resid. 1.5513 0.7399 -2.8949 0.1206 0.0126 -0.1702 -3.2184 0.1387 3.9583 2.0108 -1.1309 -1.1955 Table 5 represents a two-variable loglinear model containing Islamic finance policies (ie., 4M.with four categories) and the ratio of long-term 94 The American Journal of Islamic Social Sciences 16:4 finance with two categories. This table also shows the Islamic finance poli- cies classified by their observed number and expected number in each ratio category. Ninety-two weighted cases will be used in the analysis. The observed significance level associated with Chi Square is very low, about 0.001; hence, the independence model that the finance policies do not influence the long-term finance ratio is rejected. In other words, the analy- sis of this model suggests that this type of policy influences its degree of application in long-term finance programs. The foregoing analysis is supported by the high adjusted residual between the observed and expected numbers of some categories in the model Table 5 as follows: Musharaka The observed number in the third category is less than expected, with low discrepancy between the observed and expected numbers expressed by a low negative adjusted residual (-2.8949). In fact, the analysis of the cate- gory suggests that no Islamic bank invests more than 60 percent of its long- term finance resources in long-term finance musharaka programs. Murabaha The observed number in the first category is less than expected by con- trast with the third category, where the observed number is higher than expected. The numerical values of the adjusted residual exceed 2, suggest- ing that there are important discrepancies between the observed and expected numbers. The analysis of the first category suggests that more Islamic banks than expected prefer not to allocate less than 30 percent of their long-term finance resources to long-term finance murabuha programs. Also, the analysis of the third category suggests that more Islamic banks than expected allocate more than 60 percent of their long-term finance resources to long-term finance murabaha programs. Muzaraha The observed number in the first category is higher than expected, with a high positive adjusted residual (2.0108), suggesting that more Islamic banks than expected allocate less than 30 percent of their long-term finance resources to long-term finance rnuzaraha programs. Summary It seems that (1) Islamic banks do not allocate more than 60 percent of their long-term finance resources to long-term finance musharaka pro- grams; (2) Islamic banks prefer not to allocate less than 30 percent of long- Ashour: The Importance of Murubaha in Long-Tern Finance 95 term finance resources to long-term finance murubuhu programs; (3) Islamic banks prefer to allocate more than 60 percent of their long-term finance resources to long-term finance murubuhu programs; (4) Islamic banks prefer to allocate less than 30 percent of their long-term finance resources to long-term finance muzurahu programs; and (5) otherwise, there is no significant difference in the proportions of long-term finance resources allocated to long-term finance 4M programs. This analysis leads to the conclusion that the proportion of long-term finance resources allocated to each long-term finance 4M program varies from one policy to another. For certain reasons, which will be discussed later, it seems that Islamic banks do not allocate more than 60 percent of their LTF resources to LTF mushuruku. However, it does not appear the case that Islamic banks allocate most of their LTF resources to LTF murubuhu programs. The proportion of LTF resources allocated to LTF murubuhu does not appear significantly different from the proportion allocated to LTF mudaru- bu programs. Therefore, it seems reasonable to reject the hypothesis that Islamic banks invest most of their LTF resources in LTF murubuhu pro- grams. 4M and the Contribution Ratio The contribution ratio is the maximum finance that an Islamic bank is willing to contribute to long-term fiance programs. This ratio also meas- ures the degree to which Islamic banks get themselves involved in long- term finance programs. The aim of this subsection is to present the results of examining the long-term finance musharuka, mzufurubu, murubuhu, and muzuruha policies in relation to the long-term finance contribution ratio in the Islamic banking industry (Hypothesis 3). Murabaha is the easiest and safest form of finance, in terms of getting the finance back, in the Islamic banking industry. Islamic banks can ask for suitable security;16 therefore, it is expected that Islamic banks would be most involved (measured by the contribution ratio) in individual long-term finance murubaha programs. In other words, the contribution ratio to indi- vidual long-term finance murabuhu programs is expected to be extremely high compared to the contribution ratio to individual long-term finance mushuruku, mzufurubu, and muzurahu programs. Goodness-of-fit test statistics Likelihood ratio chi-square = 5.57693, df = 6, p = .472. % The American Journal of Islamic Social Sciences 16:4 The observed sigmfkance level associated with chi-square is 0.472; hence, the independence model that the contribution ratio is not influenced by policy applied in long-term finance programs is accepted. In other words, the analysis of this model suggests that the finance policy does not appear to influence the Islamic bank's decision in contributing to individual long-term finance 4M programs. This analysis leads to the conclusion that Islamic banks involve themselves in similar degrees in all individual long- term finance 4M programs. Therefore, the hypothesis that Islamic banks involve themselves heavily in long-term finance murabaha is rejected. 4M and the Rate of Return The rate of return is the required minimum after tax rate of return on long-term finance programs in the Islamic banking industry. The aim of this subsection is to present the results of examining the long-term finance 4M programs in relation to the required rate of return (Hypothesis 4). Goodness-of-fit test statistics Likelihood ratio chi-square = 6.68973, df = 6, p = .350. The observed significance level associated with chi-square is 0.350; hence, the independence model that the finance policies do not influence the required rate of return on the long-term finance 4M programs is accept- ed. In other words, the analysis of this model suggests that the type of pol- icy (either musharaka, mudaraba, murabaha, or muzaraha) appears not to influence the required rate of return on long-term finance programs. This analysis leads to the conclusion that finance policy has no impact on the Islamic banks' decision as to what minimum after tax rate of return is required on long-term finance programs. Therefore, the hypothesis that Islamic banks require lower rate of return on long-term fmance murabaha programs than long-term finance musharuka, mudaraba, and muzaraha programs is rejected. Summary of Results Table 6 summarizes the findings of the current section. Table 6. Summary of Findings Related to the Islamic Finance Policies cat104 Elnduls . . Use of 4M in LTFP Similar with exceptions 4M and LTF ratio Similar with exceptions 4M and contribution ratio Similar 4M and the required rate of return Similar Ashour: The Importance of Murubaha in Long-Tern Finance 97 Discussion of the Findings The main hypothesis addressed in this paper is that there is an Islamic finance policy, i.e., murabaha, which is the backbone of long-term finance programs in the Islamic banking industry. The term “backbone” was first used (as discussed earlier) with no quantitative definition. So, the interpre- tation of “backbone” is that it is the most important in terms of use, resources, involvement, and rate of return. However, it is perhaps more rea- sonable before drawing any conclusion to discuss the findings. It seems that the employment, resources committed, involvement, and the required rate of return on the long-term finance 4M programs in the Islamic banking industry are similar except in the following ways: Musharaka It was found that Islamic banks do not allocate more than 60 percent of their long-term finance resources to long-term finance musharaka pro- grams. This could be due to the nature of the musharaka program, where an Islamic bank is a partner and where it pays only a small share of the proj- ect finance. In other words, an Islamic bank might be involved in many individual long-term finance musharaka projects but these would not, in total, exceed 60 percent of its long-term finance resources. Murabaha It appears that 1slamic.banks avoid using murabaha in their long-term finance programs, as well as allocating less than 30 percent of their long- term finance resources to long-term finance murabaha programs. In other words, it appears that murabaha is more common in the application of long-term finance programs and that Islamic banks prefer to allocate more than 60 percent of their long-term finance resources to long-term finance murabaha programs. This could be due to the fact that murabaha is easier to conduct and safer for the bank than the other finance policies, in terms of getting the finance back. Another important factor leading to these results is the fact that, unlike the other finance policies, murabaha is suitable for domestic use and can be used to buy domestic products for or- people. This alone makes it more popular than the other finance policies. Muzaraha It appears that muzarah is the least applied policy to long-term finance programs in the Islamic banking industry. The main reason could be that muzaruha is only suitable to agricultural programs and that most Islamic 98 The American Journal of Islamic Social Sciences 16:4 banks are located in urban societies. Also, the nature of the policy requires the bank either to provide the land or to provide the finance and labor, which seems hard to fulfill. The main hypothesis in this paper is that rnurubuhu is the backbone (i.e., the most important method) to finance long-term programs in the Islamic banking industry. As discussed earlier, there is no empirical evidence to determine what “backbone” means. Therefore, this paper investigated rnurubuhu from different standpoints in an attempt to determine its impor- tance compared to rnusharuku, mudarubu, and muzaruhu in the long-term finance programs. The 4M were in terms of long-term finance ratio, contribution ratio, and rate of return. The findings of this paper suggest that (1) the applications of rnusharuka, rnudarubu, and rnurubuhu to long-term finance programs are similar in the Islamic banking industry where rnuzuruha is the least used; (2) the propor- tions of long-term finance resources allocated to long-term finance rnurubuhu, mudarubu, and rnurubuhu programs are similar; (3) the involvement (measured by the contribution ratio) in long-term finance rnlcsharuku, rnudarubu, murubuha, and muzaruhu programs are similar; and (4) the after tax minimum required rate of return on long-term finance 4M programs are also similar. These findings by no mean confirm that one of the 4M policies is more important than the others in the long-term finance program in the Islamic banking industry. Consequently, it seems reasonable to reject the idea that rnurubuhu is the backbone of long-term finance programs in the Islamic banking industry. Movement in the Application of 4M One thing is clear from the findings of this study: there is a move in the application of Islamic finance policies, and murubuhu is no longer the backbone of long-term finance in the Islamic banking industry. Musharuka, rnudarubu, and rnuzuruha are equally important for financing long-term programs, for the following reasons: 1. The writers17 who described the use of murabuhu as a backbone described it in the early stages of Islamic banking, i.e., the 1970s and early Ashour: The Importance of Murabaha in Long-Term Finance 99 1980s. Since then the Islamic banks have gained more experience and become more confident about conducting riskier policies, such as mudara- ba. 2. Islamic finance policies, other than murabahu, have become clearer and more developed since the start of the Islamic banking industry. There is a growing amount of research conceming the applications of musharaka and mudaraba. For example, in 1985 the International Association of Islamic Banks in Cairo devoted one whole volume to mushuraka. Islamic governments also legislated for the conduct of mudaraba and the other finance policies. 3. It seems that interest-based banks, i.e., traditional banks, compete with Islamic banks. For example, one Islamic bank used to invest a high pro- portion of its resources in buying cars for its clients, i.e., a murabaha con- tract. Later, however, interest-based banks started to penetrate the car mar- ket with higher incentives than that of the Islamic bank concerned. The Islamic bank could not (nor did it want to) match the traditional banks, so it reduced its dealings with the car market and, consequently, it reduced the proportion of resources allocated to murabahu programs. 4. Also, in the summer of 1992, at a seminar in Jeddah, Saudi Arabia, a researcher pointed out that Islamic banks face some problems in murabaha applications. As an example, he described how Islamic banks do not have enough guarantees once the ownership of a product, such as a car, is trans- ferred to the client by a murubahu contract. He pointed out that Islamic banks have started to apply an installment purchase through which the Islamic banks can still own the product until the whole price is paid. 5. Mohamad'* found that most of the bad debt cases in an Islamic bank are on through murabaha. It seems the reason was lack of fast communi- cation and exchange of information between branches in the Concerned Islamic bank. 6. Murabaha also has some limitation^:'^ it can only be used when goods are involved. It is not suitable to finance running expenses such as salaries. In addition, a profit margin is added to the production costs. 4M and Islamic Banking Literature It was discussed earlier that theorists of Islamic banking and Islamic eco- nomics consider musharaka to be the most suitable finance policy for both development and long-term finance programs. The findings of this research 100 00-3096 3 1-6096 The American Journal of Islamic Social Sciences 16:4 suggest that, on the one hand, mushuraka is as important as murabaha and mudaruba in the application to long-term finance programs. On the other hand, murabahu can by no means be the most important finance policy in long-term finance programs, i.e., the backbone of long- term finance programs in the Islamic banking industry. Consequently, it appears that musharaka is being recognized by the Islamic banking institu- tions and that it is becoming more important to long-term fiance pro- grams. Further Research The findings of this paper suggest that there is a movement in the fre- quency of employment from one policy to another. The reasons for this change of emphasis are not well understood. Further research is urgently needed in Islamic banking to explore these changes. The research should not predetermine the finance policies, but should investigate the historical employment of Islamic finance policies. Appendix 1 : Questionnaire! 1. Where is the bank headquarters located? 2. When was the bank established? 3. What was the bank's capital (in million U.S. dollars) in 1991? 4. Which of the following policies do you use in financing the LTFP? Musharaka ( ) Mudaraba ( ) Murabaha ( ) Muzaraha ( ) If you use any, please answer the following questions : Ashour: The Importance of Murabaha in Long-Term Finance 00-30% 3 1 4 0 % 61-1W% 101 00-308 3140% 61 -1 MQ 7. What is the after tax minimum rate of return required on LTFP using 4M? Notes 1. International Islamic Bank for Investment and Development (IBID), Finance by Mudaraba, Towards Understanding Islamic Economics Series 2 (Cairo: WID Research Centre, 1988), 7. In Arabic. D.M. Quraishi, “Mudaruba and Its Modem Applications,” seminar on Islamic Financing Techniques International Institute of Islamic Economics, Islamabad, Pakistan, December 1984. Dubai Islamic Bank, Mudaruba, Towards Understanding Islamic Banking Series 2 (UAE: Dubai Islamic Bank, 1996). In Arabic. Sami H. Homud, ‘The Applications of Murabaha Sales from Simple Investment to the Formation of Islamic Capital Market with the Case of Baraka Bank of Bahrain as a Practical Model,” proceedings of Workshop on Investment Strategy in Islamic Banks: Applications, Issues and Problems, 6th Annual Conference of Al-Albait Foundation, Amman, Jordan, June 1987. TL. Carlson et al., “Trade Finance Under Islamic Principles: A Case Study,” proceedings of International Conference on Islamic Banking and Finance, London, 21-26 September, 1986. For further discussion on these four policies, see Y.H. Ashour, “The Long Term Finance Progmns in the Banking Industry: The Case of Islamic and Arab Banks.” chapters 1 and 2, Ph.D. thesis, Canterbury Business School (CBS), University of Kent at Canterbury, UK, 1993; Y.H. Ashour, “Recent Development in the Application of the Long Term Finance Programs in the Islamic Banking Industry,” The College of Education Journal 2, no. 1 (January 1999); M.S. Alashqar et al., Current Economic Issues in the Light of Islamic S h M , 1st ed. (Jordan: Dar Alnfaais, 1998); A. Albaz, Illegal Money in the Light of Islamic ShM, 1st ed. (Jordan: Dar Alnfaais, 1998); Alghareeb Nasir, The Fowrdarionr of Islamic Banking, 1st ed. (Egypt: Abollo, 1996); and M. Shubair, Current Financial Issues in the Light of Islamic S h M , 1st ed. (Jordan: Dar Alnfaais, 1996). 2. 3. 4. 5. 6. 102 The American Journal of Islamic Social Sciences 16:4 7. Shaoqi Ismael Shehattah, “Experience of Faisal Islamic Bank (Egypt),” Applied Study Proceedings of Workshop on Investment Strategy in Islamic Bank: Applications, Issues and Problems, 6th Annual Conference of Al-Albait Foundation, Amman, Jordan, June 1987, p. 13; M.U. Khalifa and S.E.A. Ibrahim, “Musharaka Financing and Its Role in Development of Small Farms: The Experience of the Sudanese Islamic Bank,” Proceedings of Joint Seminar on Islamic Banks, The Islamic Foundation and Loughborough University, UK, 1983, p. 108; and H.A. Alameen, “Murubaha in an Interest Free Framework,” proceedings of the Second Conference of Islamic Economics, Islamabad, Pakistan, 19-23 March 1983, p. 6. Homud, “The Applications of Murubaha Sales from Simple Investment to the Formation of Islamic Capital Market with the Case of Baraka Bank of Bahrain as a Practical Model.” S. Alhawari, Investment, vol. 5 , Encyclopaedia of Islamic Banking (Cairo: International Association of Islamic Banks, 1988), in Arabic; A. Alnajar, “Islamic Banks,” Journal of Islamic Bunks (Albonouk Alislamia), vol. 7 ; International Association of Islamic Bank (October 1979): 27, in Arabic. 10. IIBID, Finance by Musharaka, Towards Understanding Islamic Economics Series 3 (Cairo: Research Centre, 1988), 6 and 14. In Arabic. 11. M.F. El&, “Financing Dealing in Islamic Banks,” unpublished working paper, Cairo, nd. 12. See Ashour, “The Long Term Finance Programs in the Banking Industry: The Case of Islamic and Arab Banks,” chapters 1 and 2, Ph.D. thesis, Canterbury Business School (CBS), University of Kent at Canterbury, UK, 1993; “Murabaha: Is It the Backbone of Long Term Finance Programs in the Islamic Banking Industry,” Arab Management Conference, Bradford University, 6-8 July 1993; “Recent Development in the Application of the Long Term Finance Programs in the Islamic Banking Industry,” The College of Education Journal 2, no. 1 (1999). 13. IIBID, Finance by Murabaha, Towards Understanding Islamic Economics Series 4 (Cairo: Research Centre, 1988), 118-121. In Arabic. 14. Homud, “The Applications of Murabaha Sales from Simple Investment to the Formation of Islamic Capital Market with the Case of Baraka Bank of Bahrain as a Practical Model.’’ 15. Shehattah, “Experience of Faisal Islamic Bank (Egypt),” 13; Khalifa and Ibrahim, “Musharuka Financing and Its Role in Development of Small Farms: The Experience of the Sudanese Islamic Bank,” 108 and Alameen, “Murabaha in an Interest Free Framework,” 6. 16. M.G. Attia, “Islamic Financing Mechanisms Available for Islamic Banks and the Need for New Mechanisms,” Vienna, 16-20 June 1986. 17. Homud, “The Applications of Murabaha Sales from Simple Investment to the Formation of Islamic Capital Market with the Case of Baraka Bank of Bahrain as a Practical Model”; Shehattah, “Experience of Faisal Islamic Bank (Egypt)”; Khalifa and Ibrahim, “Musharuka Financing and Its Role in Development of Small Farms: The Experience of the Sudanese Islamic Bank”; and Alameen, “Murubaha in an Interest Free Framework.” 18. Rashid Ali Mohamad, “The Role of Islamic Banks in Economic and Social Development with Particular Reference to the Sudanese Experience,” Ph.D. thesis, Glasgow College, Scotland, UK, 1990,286. 19. Attia, “Islamic Financing Mechanisms Available for Islamic Banks and the Need for New Mechanisms.” 14. 8. 9.