Credit risk management: a case differentiating Islamic and non‐Islamic banks in UAE
Abstract
Purpose
The purpose of this paper is to identify any differences between the Islamic and non‐Islamic banks in the UAE on credit risk management.
Design/methodology/approach
The study uses survey based methodology for data collection. The sample for the study consists of six commercial banks from UAE with three non‐Islamic and three Islamic banks and with 148 credit risk managers as respondents for the survey. The study aims to investigate factors which distinguish between Islamic and non‐Islamic banks in UAE. This is achieved by fitting a binary logistic regression model.
Findings
The study shows that the managers in Islamic banks now do not rely only on personal experiences and simple credit risk analysis. The Islamic banks appear also to be developing and practising the newer and robust techniques, in addition to traditional methods, to manage their credit risk in UAE compared to non‐Islamic banks, which indicates a possibility of further improvement in their credit risk management.
Originality/value
The paper uses questionnaire‐based methodology, which has not been used previously in the UAE financial sector, as well as in studies of credit risk management. Therefore, this research could become the cornerstone of further academic research in other developing countries using this methodology.
Keywords
Citation
Masood, O., Al Suwaidi, H. and Darshini Pun Thapa, P. (2012), "Credit risk management: a case differentiating Islamic and non‐Islamic banks in UAE", Qualitative Research in Financial Markets, Vol. 4 No. 2/3, pp. 197-205. https://doi.org/10.1108/17554171211252529
Publisher
:Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited