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This paper aims to highlight on the unique aspects of Islamic microfinance based on the experience of Baitul Maal Wa Tamwil (BMT) in Indonesia.

It adopts the content analysis approach and focuses on three phases of financing, namely, pre-financing, financing and post-financing using coding and model buildings. Data are collected through in-depth interview with a sample of representatives of BMTs that offer product based on Islamic principle for the poor located in Jakarta, Bogor, Depok, Tanggerang and Bekasi (JABODETABEK), Sulawesi Selatan, Yogyakarta and Nusa Tenggara Barat (sample chosen based on the most concentrated areas of Islamic microfinance that offered product based on Islamic principles). Ultimately, a model based on the unique features of Islamic microfinance will be developed based on the findings of the content analysis.

The proposed model incorporates the peculiarities of the poor people in pre-financing, financing and post-financing activities of micro-financing products to serve as a reference for policy makers. The paper also found that each region has unique product preferences depending on the poor’s characteristics.

This study is only conducted in four areas with BMT representation, namely, Jakarta, Bogor, Depok, Tangerang, Bekasi (often abbreviated as JABODETABEK), Sulawesi Selatan, Yogyakarta and Nusa Tenggara Barat) in Indonesia. Despite the limited scope, the findings have wide applications to the Islamic microfinancing in general.

The paper adds value to the literature on Islamic microfinance by enabling researchers and practitioners to understand the model of three step financing (pre-financing, financing and post-financing) in Islamic microfinance in Indonesia. Although not a new issue, the paper provides the practice of pre-financing, financing and post-financing processes which may differ from the practices of Islamic microfinance in other settings because of different cultural influences unique to every region.

Despite their crucial role in sustaining national economies, small and medium enterprises (SMEs) are beset by the constraint of financing at better conditions. The purpose of this paper is to compare supply chain finance (SCF) solutions provided by commercial banks and financial service providers (FSPs) that help SMEs access financing.

This study looks at multiple case studies using in-depth interviews with focal firms (lenders) to answer the research questions. In-depth interviews were conducted with three Chinese FSPs and three commercial banks providing working capital to the same SMEs. The unit of analysis is SCF solutions that have made the companies competitive in the industry.

The case studies show that the acquisition of transaction information and business credit in SCF can reduce ex ante information asymmetry. SCF utilizing receivable transfers, closed-loop business, relational embeddedness, and a combination of outcome control and behavioral control can also reduce ex post information asymmetry. For these reasons, compared with commercial bank-dominated SCF, SCF adopted by FSPs in the supply chain can better reduce information asymmetry.

This study contributes to the emerging literature exploring the impact of SCF on SMEs accessing financing. In particular, this study provides supply chain management and operations insights on SCF and their consequent influence. Previous research has focused on the direct dyadic relationship between lenders and borrowers while neglecting supply chain effects. Uniquely, this study explores the different ways commercial banks and FSPs implement SCF solutions.

The purpose of this paper is to show a creative way to fulfill financing needs of entities involved in pre‐ and post‐harvest production activities in extreme cases while mitigating inherent risks by Islamic structured trade finance from the real‐life case of cotton production in Burkina Faso.

The existing Islamic structured finance design for SOFITEX was analyzed in details so as to provide clear understanding of the subject matter. This structure was evaluated and a new design is proposed to better accommodate the financing need of SOFITEX.

There are some inherent drawbacks, explained in details, of the existing Islamic finance structure. Salam contract for pre‐harvest input financing in favor of farmers can, unlike existing structure, accommodate the complete supply chain financing solution, hence, support the whole production cycle from input procurement to the exports of cotton fiber. That is, it fits better for financing the agricultural sector.

The case and the structure studied in depth are limited to the cotton sector. This could be widened in subsequent researches.

Islamic finance instruments provide us enough room to fulfill financing needs in extreme cases as a better alternative to conventional financing tools. A method of mark‐up calculation for structured cotton trade finance is developed for Murabaha and Salam contracts.

The paper sheds new light on how to finance the agricultural sector starting from input procurement to the sale/export by Islamic finance instruments. It also shows how to get guarantees in the form of commodities in warehouse rather than bank guarantees, mortgage, sovereign guarantees, etc.

We examine whether discretionary accruals of firms obtaining substantial external financing can be explained by managerial manipulation or managerial overoptimism. Insider trading patterns and press releases around equity and debt financing suggest that managers are more optimistic about their firms around debt financing. Consistent with earlier studies, we find that discretionary current accruals peak when firms obtain equity financing. However, we also find that discretionary accruals peak when firms obtain debt financing. Moreover, discretionary accruals are higher for firms that rely on debt rather than on equity financing. The results are robust to controlling for firm characteristics, excluding small and distressed firms, and using alternative measures of discretionary accruals. These findings support the hypothesis that managerial overoptimism distorts financial statements of firms obtaining external financing.

In order to provide a better understanding of export financing in Ghana this exploratory study was undertaken on a sample of non‐traditional exporting firms and selected banks. The focus is on export financing in Ghana. Ghanaian exporters hardly obtain finance for export operations. Interest rates are high, and financial institutions prefer granting short‐term credit to medium or long‐term credit, and investing in government treasury bills and bonds rather than lending to small and medium‐sized firms. Small and medium‐sale exporters hardly meet the requirements of banks to access credit, especially collateral. Default on loans has been high. Exporters need to be more responsible in funds utilization, just as the financial institutions have to be more exporter‐friendly to ensure the success of the national export‐led growth strategy. The recent (2000) Export Development and Investment Act is likely to provide greater access to export finance for exporting firms.

Trade Finance, International Trade, International Business, Emerging Markets, Textile Industry.

This case has been designed for the students studying courses on International Business during their graduation/post-graduation. Students are expected to have basic knowledge of International Trade and are also expected to study the different ways of financing the foreign trade to appreciate the case.

The case describes the various ways of financing of foreign trade. The case has been designed in the context of an Indian Textile Exporter who has grown steadily over the past years. As business has increased, simultaneously the requirement of funds for the exporter has also increased. Through the medium of conversations, the different ways of financing the foreign trade have been explained in detail. Equipped with this knowledge, students are required to discuss the pros and cons of the different ways of financing the foreign trade. The case also discusses the dilemma of foreign currency hedging. This is a common dilemma faced by importers and exporters as they grow over a period of time.

This case has been designed to: understand the various ways of financing the foreign trade and understand their merits and demerits; understand the difference between factoring and forfeiting understand how the Exim Bank of India plays an important role in supporting exporters and importers in India; and understand the various ways of hedging the foreign currency risk.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Capacity building in fragile and post‐conflict situations is specially challenging for policy makers in that it represents a situation that needs to be carefully managed. Understanding the dynamic link between capacity building and conflict requires understanding the nature and determinants of conflicts, their duration, intensity and the modalities for their cessation and post‐conflict reconstruction. This study attempted to do that from systemic or theoretical perspective. A major common theme that runs across the literature is that post‐conflict recovery and sustainable development and the associated capacity building exercise in Africa need to have the following four feature: (1) first a broad development planning framework with a fairly long‐time horizon and an overarching objective of poverty reduction; (2) second, social policy‐making in such countries is expected to be distinct from non‐conflict countries. This signals the need to articulate country specific policies and (3) third, intervention in such states requires a high volume of aid flows and (4) forth it need to be preceded by deeper understanding of African societies by donors. This study by outlining such basic issues from theoretical perspective resorted to an outline of three core areas of capacity building that are needed in post‐conflict and fragile states: capacity building to address immediate needs of post‐conflict states, capacity building to address the core economic and political causes of conflict, as well as, capacity building to address issues of finance and financial sector reconstruction. Each of these aspects is discussed in detail in the study. The study underscores the need to view and understand capacity building exercise as part and parcel of a broad developmental problem which requires broader developmental solutions.

This study aims to propose a hybrid microfinance model that integrates various Islamic commercial and social finance institutions through Fintech for efficient and impactful results. The microfinance model caters to the financial and social intermediation needs through a set of financial services and non-financial support.

The study uses both a mathematical model and an empirical estimation using micro panel data to establish the core problem in microfinance operations. Conclusions from the mathematical model and estimated results in the empirical analysis are used to suggest an institutional design which embeds technology in the delivery of Islamic microfinance in an integrated structure. For screening and incentive conditions, the study gives illustration through numerical examples.

The mathematical model highlights the need for financial sustainability, outreach, scale and complementariness of non-financial factors such as commitment, repayment incentives and skills enhancement multiplier. In light of this, the proposed Islamic microfinance model is outlined to create synergies by integrating a diversity of funding sources through social savings and impact investments. The programme also blends financial services with non-financial support to ensure engagement and commitment on a long-term basis. It uses Fintech in various demand and supply-side operations to show how technology embeddedness can help in achieving cost efficiencies and extend outreach.

It is the first study in integrated institutional design in Islamic microfinance literature that embeds Fintech in both demand side and supply side operations comprehensively. The proposed model is conducive for enhancing outreach, scale and impact in the Islamic microfinancial services.

The present study aims to analyse the literature on capital structure theories for the last 21 years to identify the existing gaps and themes for prospective researchers in this domain.

A sample of 183 articles published from 1999 to 2019 in the Scopus database using “capital structure theory” and “leverage” as keywords was analysed on various basis. A citation analysis was also performed to recognize impactful authors and papers.

The findings revealed that though the capital structure research studies were highly focussed on developed economies, with time, research studies in developing markets are increasing. Further, the capital structure research studies were largely conducted by considering all the industries together, whereas the focus on a particular industrial sector was meagre. Almost all the studies were empirical, thus providing scope for primary research. Various forms of regression were popular econometric techniques used in this area of late. This review highlighted the dominance of trade-off theory to elucidate the capital structure of firms, irrespective of the status of the economy. The comprehensive review uncovered the existing gaps and identified major themes evolving in the capital structure domain.

Unlike a traditional review paper, this study classifies sample articles based on several parameters and depicts a graphical presentation of the findings to cover research gaps, avenues, evolving themes, key aspects, impactful authors and their papers, etc. in the capital structure domain. It provides ready-made information available for prospective research studies in this field.