Islamic Finance Involvement in Supply Chain of Financed Assets: A Library Research and Systematic Literature Review

Abstract

In accordance with shari’ah principles, Islamic banks have to be involved in supply chains of financed assets. However, Islamic banks are simultaneously part of the western banking system that is reluctant to be involved in the real economy. Due to these dual poorly understood boundaries, scholarly disputes persist on the similarities between Islamic and conventional banking. This study adopts the library research and systematic literature review method. After discussing “Islamic finance involvement in the supply chain of the financed asset” by library research method, the systematic literature review (SLR) approach, to search and review Islamic finance and supply chain integrated studies, was adopted, and the Web of Science and Scopus databases initially searched. An extended SLR was then used to search other databases for the review period from 2010 until 3rd February 2020. The library research method discovered the involvement of Islamic finance in the supply chain of the financed asset. The SLR also found similar involvement in several other studies. This study showed that Islamic finance can support the supply chain and solve real business issues, including support beyond traditional financing. It maintains, within a different perspective, that the integration between Islamic finance and supply chain is able to resolve real business problems. And as such, the differentiation between Islamic and conventional banking will be self-explanatory. This study potentially contributes, in a novel perspective, to a greater understanding of the working of current Islamic banking and finance in the economy.

Keywords

• islamic finance involvement
• supply chain of financed asset
• systematic literature review
• conventional banking vs islamic banking
• a novel perspective