The impact of investment determinants on bank financing for Yemeni Islamic banks: an applied study for the period (2000-2017)

Abstract

The current study aimed to measure the impact of investment determinants on banking financing for Yemeni Islamic banks, through application to Yemeni Islamic banks for the period 2000-2017. The study used the descriptive analytical approach and the standard approach, depending on the outputs of Eviews program, version (9), and the most important tackled by the study were (the size of the bank, the multiplicity of investment formulas, the volume of investment deposits, the rate of return on deposits, the volume of risks, the gross domestic product) as independent variables and (the volume of Islamic banking financing) as a dependent variable.

The study relied on financial reports issued by the Central Bank of Yemen, Yemeni Islamic banks, and direct field visits to all other data related to the study, and the study concluded that the variables (the size of the bank, the multiplicity of investment formulas, the size of the risks, and the gross domestic product) have a positive impact with statistical significance on Islamic banking finance and the variable (the volume of investment deposits) does not have a positive, statistically significant impact on Islamic banking finance , this is due to the tendency of Islamic banks to keep deposits in liquid form as a result of the lack of an appropriate environment for investment and granting the necessary funds to the economic sectors due to the political, economic and security instability that Yemen is witnessing.

The study recommends the necessity of increasing the capital of Islamic banks, opening new banks, and introducing electronic technology to their banking services to facilitate withdrawal and deposit for the public, in addition to diversifying the real financing formulas and employing them through an Islamic financial market, that allows to exchange of these formulas between Islamic banks and other financial bodies and institutions and various economic sectors in order to serve real development areas.