FACTORS THAT INFLUENCE THE INCLINATION OF CORPORATE SECTOR TOWARDS ISLAMIC MODE OF FINANCING

Abstract

This study explores and analyzes the reasons for the less Inclined behavior of the corporate sector of Pakistan towards Islamic Financial Institutions. It also covers the information about the existing scenario of Islamic banking institutions of Pakistan, the standards IBIs follows, the products they offers, and types of customers they have. This research is exploratory in nature and qualitative data handling techniques have been used. Both, primary and secondary data sources have been used. Many reasons were identified that have an impact on the selection of IBIs. Financial decisions are taken on the basis of prudence. Perception also has an impact on the decisions. Islamic finance is going through evolutionary phase. Research is going on and things are, and need to be improved by the time. Issues being faced by the customer or potential customer of IBIs need to be identified and effectively resolved. Islamic banking institutions of Pakistan need to adopt aggressive policy. If the Islamic product can achieve price competitiveness, clear product differentiation, and ease in usage, corporate sector can inclined more towards IBIs. Standardization is also required.