Relevance of transparency to accessing Islamic financing: evidence from Islamic Development Bank member countries

Purpose The purpose of this paper is to establish the moderating effect of transparency on the relationship between Islamic financing and access to finance, supported by a contemporary empirical investigation of the Islamic Development Bank (IsDB) member countries. Design/methodology/approach A quantitative research design with a longitudinal time scope was adopted for this study. To address endogeneity detected in the data collected, the linear dynamic panel data (DPD) Generalized method of moments (GMM) modeling with data from the 57 IsDB member countries was used. Data analysis was supported by Stata (version 16) software. Findings The paper finds that Islamic financing is positively associated with access to finance and that transparency affects the direct relationship between access to finance and IsDB Islamic financing. Research limitations/implications The limitation of the paper is that Islamic financing considered was from financing by the IsDB, while many other types exist. Financial Access Index was the Access to finance. Corruption Perceptions Index scores were transparency. The methodology was limited to a longitudinal time scope, a quantitative approach, a global geographical scope and DPD-GMM modeling. These limitations call for further alternative studies in the Islamic financing area. Practical implications The study suggests that IsDB and member countries should intensify their financing to tap into unallocated/redundant funds for appropriate and optimum allocation using their network of member countries. Originality/value To the best of the authors’ knowledge, this is first paper to add to the finance and economic theory with objectives well linked to Karl Marx’s theory of profits and interest, and Agency theory with an Islamic financing twist. It affords a more coherent interrogation of the Islamic financing model’s effect on financial access strategies, moderated by transparency, with contemporary data from the IsDB.

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Publication Details

Journal
Journal of Islamic accounting and business research
Published
2026-11-02
DOI
https://doi.org/10.1108/jiabr-12-2024-0507
Primary Topic
Islamic Finance and Banking Studies
Type
article
Field-Weighted Citation Impact
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article

Relevance of transparency to accessing Islamic financing: evidence from Islamic Development Bank member countries

Gerald Kasigwa, Kasimu Sendawula, Ahmed Mutunzi Kitunzi, Ismail Kintu et al.
Journal of Islamic accounting and business research
Islamic Finance and Banking Studies
article

Relevance of transparency to accessing Islamic financing: evidence from Islamic Development Bank member countries

Gerald Kasigwa, Kasimu Sendawula, Ahmed Mutunzi Kitunzi, Ismail Kintu, Sennanda Musa, Godfrey Akileng
article en

Abstract

Purpose The purpose of this paper is to establish the moderating effect of transparency on the relationship between Islamic financing and access to finance, supported by a contemporary empirical investigation of the Islamic Development Bank (IsDB) member countries. Design/methodology/approach A quantitative research design with a longitudinal time scope was adopted for this study. To address endogeneity detected in the data collected, the linear dynamic panel data (DPD) Generalized method of moments (GMM) modeling with data from the 57 IsDB member countries was used. Data analysis was supported by Stata (version 16) software. Findings The paper finds that Islamic financing is positively associated with access to finance and that transparency affects the direct relationship between access to finance and IsDB Islamic financing. Research limitations/implications The limitation of the paper is that Islamic financing considered was from financing by the IsDB, while many other types exist. Financial Access Index was the Access to finance. Corruption Perceptions Index scores were transparency. The methodology was limited to a longitudinal time scope, a quantitative approach, a global geographical scope and DPD-GMM modeling. These limitations call for further alternative studies in the Islamic financing area. Practical implications The study suggests that IsDB and member countries should intensify their financing to tap into unallocated/redundant funds for appropriate and optimum allocation using their network of member countries. Originality/value To the best of the authors’ knowledge, this is first paper to add to the finance and economic theory with objectives well linked to Karl Marx’s theory of profits and interest, and Agency theory with an Islamic financing twist. It affords a more coherent interrogation of the Islamic financing model’s effect on financial access strategies, moderated by transparency, with contemporary data from the IsDB.

Journal of Islamic accounting and business research
Makerere University (UG)
Peace, justice, and strong institutions
Openalex Percentile: Top 9%
Islamic Finance and Banking Studies
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