Master of Science in Islamic Banking & Finance


Department of Finance

Faculty/ School

Faculty of Business Administration (FBA)

Date of Submission

Spring 2021


Dr. Saqib Sharif, Associate Professor, Department of Finance, Institution of Business Administration (IBA), Karachi, Pakistan


This thesis examines the attitude of banks’ financing to SMEs in Pakistan. The study further aims to assess if there is any difference between the lending attitude of Islamic and conventional banks. The study conducts a mixed method-based approach. The data is collected from the State Bank of Pakistan and regression analysis is applied to contrast the attitude of Islamic and conventional banks in Pakistan towards SMEs financing. The evidence of the thesis suggests that the Islamic banks are more inclined towards financing SMEs as compared to their conventional counterparts, however, overall, the results are weakly significant at 10% level. The qualitative component of the study is based on interviews of experienced bankers in Pakistan and it aimed to explore the factors that affect financing decisions in banks. The interview discussion shows that there has been a positive change in attitude of banks towards SMEs financing which has been caused primarily by government and Central Bank’s policies to support SMEs financing and in turn their development to support economic growth. In addition, it is important to note that during the interview discussions, all the participants agreed that there is not much difference between the lending attitudes of Islamic banks versus conventional banks.

Document Type

Restricted Access

The full text of this document is only accessible to authorized users.