Development of Islamic Funding Methods for Decreasing the Bank Customers’ Default: Modeling Approach

Today increasing defaults from bank customers make negative influence on bank liquidity and its credit. Thus the bank managers consider this as problem and makemany studies in this area to solve the problem; some of the outputs are standard credit scoring systems, regulatory policies and so on. On the other hand, some of expertsprefer to use the Islamic Funding contracts rather than conventional ones as useful approach for decreasing the present trends. This paper tries to model the relationships between funding contract characteristics and their influences on customer default and finally presents some solutions for designing more effective funding instruments.

Keywords:

Bank Facility , Islamic Contracts , Bank Customers Default , Funding Instruments Development.