Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development
In most countries, the main financing source for local governments for infrastructure projects comes from the central government’s budget. However, considering the growing urban population, this source will be insufficient to meet the likely increasing infrastructure expenditures in the future as it...
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| Format: | Article |
| Language: | English |
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Gaziantep University
2023-04-01
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| Series: | Gaziantep University Journal of Social Sciences |
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| Online Access: | https://dergipark.org.tr/tr/download/article-file/2693335 |
| _version_ | 1797837503340740608 |
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| author | Ömer Faruk Tekdoğan |
| author_facet | Ömer Faruk Tekdoğan |
| author_sort | Ömer Faruk Tekdoğan |
| collection | DOAJ |
| description | In most countries, the main financing source for local governments for infrastructure projects comes from the central government’s budget. However, considering the growing urban population, this source will be insufficient to meet the likely increasing infrastructure expenditures in the future as it is now. Local governments must explore alternative financing methods, including accession to capital markets. Nevertheless, most local governments, especially the small and medium-sized ones, do not have access to capital markets, due to their low creditworthiness and insufficient technical and administrative capacity. For this reason, some supportive mechanisms to increase the creditworthiness of local governments within the scope of the conventional financial system have been developed in many countries. Aspired by the well-proven methods of the conventional financial system, this paper proposes some supportive financing mechanisms for local governments based on Islamic financial principles. These mechanisms could help local governments to access capital with higher creditworthiness and contribute to the development of Islamic capital markets. In order to lower the borrowing costs for local governments by giving them direct or indirect access to capital markets, this study suggests five possible Islamic financing methods. However, because to the novelty of the subject, it attempts to lay the groundwork for future research that will yield fresh perspectives on this issue. |
| first_indexed | 2024-04-09T15:26:51Z |
| format | Article |
| id | doaj.art-57a962b6126a4cf885776a3c56ee6245 |
| institution | Directory Open Access Journal |
| issn | 1303-0094 2149-5459 |
| language | English |
| last_indexed | 2024-04-09T15:26:51Z |
| publishDate | 2023-04-01 |
| publisher | Gaziantep University |
| record_format | Article |
| series | Gaziantep University Journal of Social Sciences |
| spelling | doaj.art-57a962b6126a4cf885776a3c56ee62452023-04-28T16:25:51ZengGaziantep UniversityGaziantep University Journal of Social Sciences1303-00942149-54592023-04-0122256557810.21547/jss.1185404136Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic DevelopmentÖmer Faruk Tekdoğan0ANKARA SOSYAL BİLİMLER ÜNİVERSİTESİIn most countries, the main financing source for local governments for infrastructure projects comes from the central government’s budget. However, considering the growing urban population, this source will be insufficient to meet the likely increasing infrastructure expenditures in the future as it is now. Local governments must explore alternative financing methods, including accession to capital markets. Nevertheless, most local governments, especially the small and medium-sized ones, do not have access to capital markets, due to their low creditworthiness and insufficient technical and administrative capacity. For this reason, some supportive mechanisms to increase the creditworthiness of local governments within the scope of the conventional financial system have been developed in many countries. Aspired by the well-proven methods of the conventional financial system, this paper proposes some supportive financing mechanisms for local governments based on Islamic financial principles. These mechanisms could help local governments to access capital with higher creditworthiness and contribute to the development of Islamic capital markets. In order to lower the borrowing costs for local governments by giving them direct or indirect access to capital markets, this study suggests five possible Islamic financing methods. However, because to the novelty of the subject, it attempts to lay the groundwork for future research that will yield fresh perspectives on this issue.https://dergipark.org.tr/tr/download/article-file/2693335i̇slam ekonomisi ve finansıi̇slami sermaye piyasalarısukukkredi değerliliğiislamic economics and financeislamic capital marketssukukcreditworthiness. |
| spellingShingle | Ömer Faruk Tekdoğan Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development Gaziantep University Journal of Social Sciences i̇slam ekonomisi ve finansı i̇slami sermaye piyasaları sukuk kredi değerliliği islamic economics and finance islamic capital markets sukuk creditworthiness. |
| title | Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development |
| title_full | Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development |
| title_fullStr | Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development |
| title_full_unstemmed | Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development |
| title_short | Islamic Finance-Based Financing Mechanism Proposals to Support Local Economic Development |
| title_sort | islamic finance based financing mechanism proposals to support local economic development |
| topic | i̇slam ekonomisi ve finansı i̇slami sermaye piyasaları sukuk kredi değerliliği islamic economics and finance islamic capital markets sukuk creditworthiness. |
| url | https://dergipark.org.tr/tr/download/article-file/2693335 |
| work_keys_str_mv | AT omerfaruktekdogan islamicfinancebasedfinancingmechanismproposalstosupportlocaleconomicdevelopment |