Addressing financial bankruptcy from the Islamic perspective

  • Received January 30, 2019;
    Accepted July 10, 2019;
    Published July 16, 2019
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  • Article Info
    Volume 14 2019, Issue #3, pp. 9-19
  • Cited by
    5 articles

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This work is licensed under a Creative Commons Attribution 4.0 International License

The national as well as global economy is significantly affected as a result of financial bankruptcy. Therefore, identifying the rates of bankruptcy would be helpful to inspect the reasons for its failure. The present study aims to investigate different ways for the successful treatment of financial bankruptcy based on Islamic teachings, appropriate methods and techniques in handling bankruptcy.
The study gathered views of CFOs operating in Al-Hassan Industrial Estate and the views of Islamic banks’ staff working in investment sections through a questionnaire. Analytical statistical procedures were applied to test the hypotheses.
The results emphasized the importance of administration, Zakat funds, creditors, and suppliers in addressing financial bankruptcy. The management of Zakat in addressing the financial bankruptcy occupied the highest importance, i.e. 88%. However, lowest relative importance (46%) was achieved by commitment of funds debtors to collect Zakat and distribution in the treatment of financial bankruptcy.
The time and opportunity granted by the creditors to individuals and enterprises during bankruptcy hold much importance. The study has recommended establishment of a system derived from Sharia to overcome the financial difficulties.

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    • Table 1. One-Sample Kolmogorov-Smirnov test
    • Table 2. The validity and reliability of measurement tools
    • Table 3. Relative importance of scientific qualification and experience
    • Table 4. Arithmetic average contrast and the relative importance of the independent variables (administration, the size of Zakat, the size of other handouts, creditors, and suppliers)
    • Table 5. Average contrast and the relative importance of the dependent variable “financial bankruptcy from an Islamic perspective”
    • Table 6. The relationship between independent variables and processing of financial bankruptcy from an Islamic perspective
    • Table 7. The relationship between administration, Zakat funds, other handouts, creditors and suppliers and addressing financial bankruptcy from an Islamic perspective
    • Table 8. Analysis of variance (ANOVA) for independent variables and the dependent variable
    • Table 9. Analysis of variance (ANOVA) for independent variables addressing the financial bankruptcy from an Islamic perspective
    • Table 10. Results of the chi-square test
    • Table 11. Mann-Whitney U test
    • Table A1. Summary categories study position to reject or accept the hypothesis