blog




  • Essay / Lack of financing methods PLS - 865

    IV. RecommendationsAs presented in the document, several diverse factors contribute to the lack of PLS ​​financing methods. However, one thing all factors have in common is information asymmetry. This is why it is enough to tackle the central problem. Although the literature offers many alternatives to address specific obstacles, it is essential that major restructuring and reforms are carried out to improve the weak environment to facilitate PLS financing modes. Implementation of control and regulatory mechanisms A possible solution that could be implemented is that of reform, by activating and ensuring the effective implementation of regulatory policies applying the regulatory authority to guarantee transparency. Internal and external control mechanisms are necessary. This control and surveillance constitutes a form of authority. Redefinition measures must be taken taking into account the distinction between management and control, in order to optimize performance and efficiency. An active board of directors, bylaws and governance strategies implemented in companies allow shareholders to monitor the behavior of managers to ensure that it is consistent with their interests. Furthermore, such a mechanism needs cooperation to ensure its success. The free flow of information and communication and effective decision-making are essential elements necessary to ensure continuous monitoring and control systems are in place. Furthermore, as mentioned earlier, it is also possible to ensure that reward policies and incentives are available to avoid information asymmetry. The diagram below illustrates the distinction between management and control in terms of the interrelationship between reward, risk, responsibility and authority. By ensuring a balance...... middle of paper ...... 1999), "Islamic Business Contracts, Agency Problem and Islamic Business Theory", International Journal of Islamic Financial Services Vol. 1 No.2, pp. 12-28. Siddiqi, M. (1983), “Interest-Free Banking”, Research in Islamic Economics, Volume 1, Number 2. Siddiqi, M (1985) Partnership and Profit Sharing in Islamic Law Islamic FoundationThe Holy Quran. ndp (2:283) Ul Haque, N. and Mirakhor, A. (1986), “Optimal Profit Sharing Contracts and Investment in an Interest-Free Islamic Economy”, IMF Working Paper. Visser, H. (2009), Islamic Finance. Cheltenham, UK: Edward Elgar.Vogel, FE Hayes, SL (1998), “Islamic Law and Finance: Religion, Risk and Return”. 1st edition, Kluwer Law International. Warde, I. (1999). The Revitalization of Islamic Profit and Loss Sharing [Report] Cambridge: Center for Middle East Studies, Harvard University..