A project Undertaken as Part of bsc (Hons) Economics with Finance degree, Westminster International University in Tashkent

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A Project Undertaken as Part of BSc (Hons) Economics with Finance degree,
Westminster International University in Tashkent

The Impact of Islamic Banking on Entrepreneurial Motivation and Medium Enterprises Performance in Malaysia

Course: Economics with Finance
Name: Asgari Farkhad
Email: [e-mail]
Supervisor: Sardor Azam
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Contents

Acknowledgement 3
Abstract 4
Introduction 5
Research question 6
Objectives 6
Literature review 6
Methodology 8
Entrepreneurial motivation 8
Islamic banking 9
Return on investment 9
Economic growth 10
Inflation 10
Base rate 10
Model estimation 11
Results 11
Unit root test 11
Conclusion 16
Regression results 16
Limitations and room for the future researches 19
Resources 19
Appendix 20

Acknowledgement

I am glad that after six months of hard work on this research, it is time to express my gratitude and sincere to all the people who helped in order to make this research possible.
First, I would like to thank my supervisor Sardor Azam who has been patient with my research paper. In addition, I would like to thank for his precious time that he provided for me, for his valuable suggestions and comments. He has been a good guide during this process.
Finally, I would like to thank my parents and my beloved wife for their love and support.

Abstract

The main issues related to businesses are simple access and availability of capital, risk management and relevant knowledge. These three are the main factors that can motivate an individual or an organization to be an entrepreneur. The Islamic Banking has some better offers than conventional banks, such as risk sharing principle that gives a huge advantage over conventional banking system. Moreover, the relationship of creditor and debtor resembles a partnership or direct investment compared to conventional banking. Interest free banking is the foundation of Islamic banking, where they share profits and losses instead of gaining interest on their loans. People tend to invest the capital in business activities rather than interest generating businesses. The aim of this paper is to understand and illustrate the impact of Islamic banking on entrepreneurial motivation. The study is conducted based on secondary data acquired from World Bank Open database. As a result number of new registered businesses does not depend solely on Islamic Banking but there are other significant factors influencing entrepreneurial motivation. For example, economics growth, inflation level, cost of borrowing money from banks and possible return rate on investing in business.