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Islamic Banks Financing and Poverty Alleviation in Sudan

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  • Mohamed, Issam A.W.

Abstract

The continuous regressions in the per capita income of the Sudanese people have triggered many suggestions to ameliorate their productive capabilities. One of them was the facilitating in financing programs through official channels. However, there are many structural impediments that inhibit those programs. One of the financial programs was the Small or miniature financing in addition to the establishment to specialized Banks as the Family Bank. The current paper discusses issues of financing in Sudan as part of programs initiated to improve income per capita. Islamic and regular financing systems are analyzed in order to explain existing impediments. Then Family Bank systems and financing facilities are discussed. Results explained in this paper clear the facts that there are other macroeconomic impediments and distortions that have negative impacts on feasibility of conducting normalized productive activities. One of them is the accelerating inflation rates and foreign currencies exchange rates. That is in addition to the indigenous distortions of inflated taxation rates that render smaller capitals from gaining profits on small scale. The expected productive cycles and variables are not subjected to the rule of Ceteris Paribas where cost can change. That adds to the difficulties in gaining the financing per se which are represented in the required time, bureaucratic processes, required collateral and higher interest rates. Even in the Islamic financing, the methodologies applied do not differ from the traditional in interest rates. Both are subtracted from final productive outputs. The expected Zero Interest Rates expected from such small production/income improvement financing projects do not exist. The final results are manifested in lesser beneficiaries, less expected incomes with diminishing internal return rates.

Suggested Citation

  • Mohamed, Issam A.W., 2010. "Islamic Banks Financing and Poverty Alleviation in Sudan," MPRA Paper 34489, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:34489
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    File URL: https://mpra.ub.uni-muenchen.de/34489/1/MPRA_paper_34489.pdf
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    More about this item

    Keywords

    Sudan; Islamic Banking; Financing; Poverty; Economic Performance;

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • A10 - General Economics and Teaching - - General Economics - - - General
    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics

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