Credit risk management and practices in Islamic and conventional banks: an emerging market perspective

Mahfod Aldoseri and Andrew Worthington

Chapter 19 in Handbook of Banking and Finance in Emerging Markets, 2022, pp 366-377 from Edward Elgar Publishing

Abstract: This chapter undertakes a comparative assessment of credit risk management and practices of Islamic and conventional banks in Saudi Arabia. We employ a sample of Islamic and conventional banks and a questionnaire administered to more than one hundred senior officers carrying out credit risk management activity across five primary aspects of credit risk management: (i) understanding credit risk, (ii) credit risk management, (iii) credit risk assessment analysis, (iv) credit risk identi﬌cation and (v) credit risk monitoring. We argue that because of their distinctive risk profile, credit risk management in Islamic banks could be challenging. However, we find that Islamic banks in Saudi Arabia appear to have better credit risk management and practices than conventional banks. We suggest one advantage of Islamic banks may lie in the external assistance provided to them in risk management by the Accounting and Auditing Organization for Islamic Financial Institutions and the Islamic Financial Services Board.

Keywords: Development Studies; Economics and Finance (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/view/edcoll/9781800880900/9781800880900.00027.xml (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:20452_19

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().