Abstract

The main purpose of the study is to examine the willingness of Moroccan small and medium size enterprises to adopt Islamic finance methods and the factors that may affect their decision. The research method is based on a modified version of theory of planned behavior (TPB). A total of 250 questionnaires were randomly distributed to SME’s managers but only 167 were valid for Analysis. The empirical findings based on our research framework indicate that most of SMEs are potential user of Islamic finance instruments. Noticeably, cost plays a major role in determining the likelihood of demand of these products by Moroccan SMEs. In addition, business support, risk sharing, suitability and self-efficacy were also found significant in determining the probability of use of Islamic financial methods by SME. The findings extend our understanding of Moroccan SMEs attitudes and awareness towards Islamic finance, and they are of key importance in informing future financial industry practice and financial policy formation in Morocco.

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