Profit and Loss Sharing Financing, Mark-Up Products or Conventional Debt ? : Application of Analytic Hierarchy Process

Abstract

Financing SMEs is one of the most critical problems faced by entrepreneurs. PLS (Profit and Loss Sharing) and markup instruments are two sets of Islamic modes of financing developed as a substitute for conventional debt, which is typically adopted by SMEs. However, with larger finance offerings, it becomes more complicated for SMEs to determine the best financial instrument. Indeed, the financing decision involves a trade-off between tangible and intangible factors. Therefore, using an experts' decision-making in evaluating financial products is a beneficial way to assist SMEs choosing the most appropriate one. The purpose of this paper is to apply the Analytic Hierarchy Process (AHP) in selecting an instrument to finance SMEs. Financial suitability, cost, risk, management intervention and profitability are the criteria upon which the financial decision is based in the current study. The results show that PLS equity finance complies with the SMEs profile more than markup products and traditional debt. The study has concluded with suggestions for future research.

Nilai Amanah dan Kejujuran atas Praktik Bagi Hasil pada Pusat Perdagangan Syariah

“…Penelitian yang dilakukan oleh Nikmah dkk., [5] juga didapati fakta bahwa bagi hasil dapat memberikan dampak terhadap kinerja aset dan omset pedagang kecil di pasar Tanjung Jember . Penelitian yang dilakukan di luar negeri tentang keuntungan dari penerapan bagi hasil, juga dilakukan oleh [6] yang menyatakan bahwa bagi hasil merupakan pembiayaan yang minim risiko karena ditanggung bersama oleh pihak yang bermitra dan dinilai memiliki pengaruh positif terhadap profitabilitas. Berangkat dari perspektif Islam tentang bagi hasil, ikhtiar untuk mencari tahu secara mendalam praktik bagi hasil di Syariah Trade Centre (STC) Surabaya merupakan hal yang penting maknanya.…”