The reality of applying Islamic financing formulas to small and medium enterprises in Arab countries

Abstract

The subject of Small and Medium Enterprises (SMEs) has become of great interest among researchers because of the vital role of (SMEs) in achieving economic development and since the lack of funding is the major problem facing  (SMEs), looking at different ways to finance these projects is becoming an important point to discuss. This research aims to study the issue of financing (SMEs) by Islamic banks and addressing the obstacles and challenges of using this method of finance as alternative way to finance (SMEs). The most important finding of this research is that finance provided by Islamic banks has not reached the required level and concentrated on Murabaha contract, and collateral represent the main problem facing investors when obtaining finance from Islamic banks.