Hybrid Musharakah Sukuk: An Islamic Financing Instrument for Knowledge-based companies

Abstract

Recently, financing knowledge-based companies as a strategic issue in Iranian economy has been considered by many domestic bankers. In this regard, the establishment of venture funds and the allocation of credit lines may be considered as major activities of the banking system. However, there are many challenges on the road to achieve effective financing of knowledge-based companies, namely the existing risks, absence of supervision, valuation approaches to science-based projects, etc. that despite extensive studies provide some improving opportunities in this area. Here, the Export Development Bank of Iran due to its supportive role in Iranian international trade is being engaged with an expert study for presenting a novel idea based on Islamic financial instruments as one of these achievements. This article will explain the aspects of the model and is organized as follows: At first, it reviews some statistics related to venture capital in Iran and the world and tries to analyze the current situation of knowledge-based financing. It continues with the development of literature reviews and determines the desired situation. Then the proposed model is to cover the gap between these situations and finally, it benefits from experts to validate the model and its applications.

Keywords

• knowledge-based companies
• financing
• islamic financing instruments
• hybrid financial instruments