Ranking methodology for Islamic banking sectors – modification of the conventional CAMELS method

The threat of the global climate crisis demands improvement and adjustment from various sides, including the financial sector. Islamic finance responds to environmental responsibility by presenting environmentally friendly financing products in green sukuk. This study aims to show the development trend of the number of publications in green sukuk and systematize the results of studies that explain the development and evaluation of the emergence of green sukuk investments. This study analyzed 15 publications on green sukuk during the 2016-2022 years indexed by the Scopus database. As for methodology, the descriptive analysis was used to explain the green sukuk data quantitatively; the synthesis analysis was used to describe data based on four directions (the development of models (10 sources), opportunities (12 sources), challenges (12 sources), and evaluations of green sukuk (10 sources). Preferred Reporting Items for Systematic Review and Meta-Analyses standard were used to choose samples for this investigation. The green sukuk challenge is dealing with the sukuk market after the pandemic. Several evaluation findings regarding managing commitment from the government and investors for the renewable energy sector and efforts to provide low-cost sukuk financing and risk minimization are found. Green sukuk demands efficient management to be more viable, competitive, and attractive to investors if the operational area supports it. Green sukuk projects face expanding green funding, global climate financing, managing renewable energy, and validating greenhouse gas emissions. The green stock market reaction requires coordination amongst economic subsectors.

The health sector in Morocco is marked by many achievements, but also by large deficits, especially in terms of healthcare expenditures borne by individuals. With the introduction of Islamic banks (called participative banks) in Morocco, the study aims to determine the extent to which Ijara Forward, as an Islamic financial contract, is adapted to the expectations of Moroccans to finance their health expenditures.
The study sample consisted of 200 individuals. The univariate and bivariate analyses are used to identify possible relationships between the study variables. In addition, this paper proposes a model that will predict the demand for Ijara Forward based on the logistic regression method.
The results reveal that the financial characteristics of the Ijara Forward contract are in line with the financial expectations of Moroccan individuals. Furthermore, the cost of health services is the main factor that makes healthcare inaccessible. This factor influences the demand of Ijara Forward. In addition, this paper reveals that religious beliefs stimulate Ijara Forward’s demand and encourages people to pay a higher price for Ijara Forward.

As the world has been struck with a global financial crisis, Middle Eastern countries have been affected as well. Thus, Islamic banks have expanded, and the competitive advantage has become intensive with the increased number of conventional banks in the global banking system. This manuscript is aimed to examine the impact of macroeconomic and bank-specific factors on Islamic bank financing in the Middle Eastern countries. Therefore, the Vector Error Correction Model and the Granger causality test were run from 2009 to 2018 to detect the long- and short-run relationship between the explanatory variables and Islamic bank financing. The results suggest that both inflation and profitability negatively impact Islamic bank financing in the long run. The paper also revealed bidirectional causality between the variables GDP and bank size and Islamic bank financing. It shows that GDP and bank size are highly dominant factors of Islamic bank financing in the short run. Thus, this paper provides evidence that any short-run shock in the variables of GDP, inflation, and bank size will cause a long-term relationship with Islamic bank financing. This article’s novelty is to ensure resilience within the Islamic banking system during and after the financial crisis. It provides evidence that Islamic banks can cushion their financial activities from economic volatility during the crisis. The results found can be used to predict the growth of Islamic bank financing in upcoming years in the Middle East and all emerging countries.