Dear Suhail Ahmad,

It depends on whether external financing is to be developed in accordance with the key principles of sustainable finance in line with the principles of business ethics and corporate social responsibility, a thorough analysis of investment and credit risk, respect for contractors, not using information asymmetry and in accordance with the values ​​of a specific business culture, etc. or external financing is to be developed mainly according to borrowed standards and formulas of business concepts, rules of functioning of financial markets from other economic systems? In my opinion, the first of the above-mentioned two strategies for the development of external financing of economic entities, including enterprises from the SME sector, is closer to the specificity of Islamic finance. Regardless of this, another issue that remains to be resolved is the issue of using modern information technology solutions, ICT, Internet and Industry 4.0 for the development of online financial platforms, Internet banking, Internet trading, fintechs, etc. using and / or offering specific financial services, including various forms external financing offered to business entities from the SME sector. In order to maintain the effective development of economic entities in the SME sector and the entire economy, it is necessary to improve the above-mentioned technologies, including in particular information technology, ICT, Internet and Industry 4.0, and their implementation into financial systems, online financial platforms, online banking, including mobile electronic banking etc. while maintaining high standards of rules, concepts and formalized business procedures prevailing in a specific economic area and / or in the organizational culture of a specific type of business entities. A particularly key issue is to maintain high standards of managing investment risk, credit risk, debt, financial liquidity, etc., high standards of business ethics and corporate social responsibility, in order to avoid financial and economic crises, which is what appears from time to time in Western financial systems. The issue of unethical business practices of investment banking, which became one of the key factors in generating the global financial crisis of 2008, is described in my publications available on the Research Gate portal. This type of practice that is not in line with the principles of business ethics and corporate social responsibility should not be used in finance and banking, including in the field of granting loans and other forms of external financing, because it significantly leads to the execution of financial transactions with too high credit risk, etc. . and, consequently, also to financial and economic crises. In Islamic finance, the standards in this regard are high. There is only the issue of the effective use of modern information technology, ICT, Internet and Industry 4.0 in finance, including the improvement of procedures and techniques for concluding financial transactions regarding various forms of external financing of business entities, including enterprises from the SME sector. Among these various forms of external financing, the following have been most developed and used in recent years: loans, leasing, factoring, loans from startup funds, closed-end investment funds, public offering of securities in shares and / or corporate bonds, crowdfunding, crowdfounding and other forms. online financing etc.

Best regards,

Dariusz Prokopowicz

Thank you, sir.

can refer to Islamic finance for SMES

by Hussein ELASRAG

Any finance if able to increase business volumes will help!

Thank you, Sir

through widespread and easy availability of islamic finance, SME in islamic country like Pakistan can flourish by utilising the utilised natural and human resources which remain unused due to non-availability of islamic finance (capital). which inturn will push all the economic indicators of the country in positive trajectory.