THE DEVELOPMENT OF MUDARABA SUKUKS AS A TOOL FOR FINANCING SMALL AND MEDIUM-SIZED ENTERPRISES SMES

Abstract

Small and medium enterprises SMEs, play an important role in modern economies, and this role appears clearly in developed countries, where they represent the backbone of the economy, and the basis for its growth as it contributes to production, employment and social stability. However, these projects suffer from a set of problems in developing countries, including Libya, and among the most prominent of these financing problems due to the weakness and small structure of these projects and the lack of guarantees they provide in order to obtain financing or borrowing. The study used the descriptive analytical approach through what was dealt with in the recent literature in the field of Islamic economics and marketing, and reached a number of results: Mudaraba financing is a genuine investment tool that eliminates the embarrassment caused by dealing with interest. The most appropriate Islamic financing formula for small and medium-sized enterprises is "participation formulas." The study demonstrated the critical importance of small and medium-sized enterprises in economic and social development. The study also recommended that the National Program for Small and Medium-Sized Enterprises, in cooperation with Libyan banks, seek to offer a less costly and risky financing alternative for small and medium-sized enterprises. This product, the beneficial and absolute Islamic Mudaraba Sukuk, is a participatory Islamic financing tool that allows for the mobilization of private sector and individual savings, and the public sector's contribution to financing these projects.