The Practical Difficulties of Long term Islamic Finance

Conceptually the Islamic instruments of finance, as an alternative for the interest based system, have been designed to fulfill the investor s different needs whether long, short or medium term needs. Practically, these instrument of finance are used for short-term finance. The study investigated why the Islamic banks, strictly, concentrate on short-term finance. The fieldwork is based on a descriptive survey. The population of the study consisted of the Islamic institutions operating in the Sudan. From that the study systematically, drew a sample. The primary data required for the empirical part of the study was collected by following interviewing techniques. Analyzing the primary data against the literature identified the factors impeding long-term Islamic finance. Some ratios and indicators are used to identify the practical difficulties of long term Islamic finance. The study revealed that the Islamic instruments of finance are used by the commercial banks, which depend to greater of current deposits. Therefore, the banks avert the high risks associated with converting current deposits to long term finance.

Autorentext

Dr.Assadat Abdel-frag RufaiPh.D in Accounting and finance(U.of G. - 2012).MSc. in Accounting and finance(U.of G. - 1999). Bsc.in Accounting and financial management(U. of K. - 1995).Associate professor: Department of accounting and finance faculty of Economics & Rural development- University of Gezira- Sudan( tel now).