Trustworthiness and margins in Islamic small business financing: evidence from Indonesia

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dc.contributor.authorFatwa Wijaya, Ibrahim
dc.contributor.authorMoro, Andrea
dc.date.accessioned2023-02-03T12:47:44Z
dc.date.available2023-02-03T12:47:44Z
dc.date.issued2022-11-01
dc.description.abstractThe existing literature has shown that, in the context of conventional bank lending to small businesses, trust reduces interest rates. However, the literature has not discussed the role of trust in supporting financing decisions, that is, the margin charged to small business managers at Islamic banks. We select murabaha, the most popular financing product offered by Islamic banks, and examine the role of trust in reducing margins charged for murabaha. We surveyed Islamic bank managers and asked them about the perceived benevolence (habitualization) and perceived integrity (institutionalization) of small business managers with whom they are dealing. We found trust is negatively associated with the margins charged to small businesses. Our results are robust to endogeneity.en_UK
dc.identifier.citationFatwa Wijayaa I, Moro A. (2022) Trustworthiness and margins in Islamic small business financing: evidence from Indonesia, Borsa Istanbul Review, Volume 22, Supplement 1, December 2022, pp. S35-S46en_UK
dc.identifier.eissn2214-8469
dc.identifier.issn2214-8450
dc.identifier.urihttps://doi.org/10.1016/j.bir.2022.10.010
dc.identifier.urihttps://dspace.lib.cranfield.ac.uk/handle/1826/19128
dc.language.isoenen_UK
dc.publisherElsevieren_UK
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 International*
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/*
dc.subjectFinancingen_UK
dc.subjectIslamic banksen_UK
dc.subjectMurabahaen_UK
dc.subjectMarginen_UK
dc.subjectSmall businessen_UK
dc.subjectTrusten_UK
dc.titleTrustworthiness and margins in Islamic small business financing: evidence from Indonesiaen_UK
dc.typeArticleen_UK

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