Achieving Backward Integration to Islamic Finance: A Solution to Inadequate Short-Term Liquidity Instruments (British Journal of Advanced Research)

Summary

• The study collects quantitative data from 120 financial professionals across Nigeria to address Islamic banking short-term liquidity constraints.p.1
• Seventy per cent of survey respondents agree or strongly agree that the overall inadequacy of short-term Shariah-compliant instruments weakens liquidity management.p.10
• 74.2% of professionals agree or strongly agree that backward integration mechanisms can enhance the availability and accessibility of Shariah-compliant short-term products.p.10

Key insights

1. Short-term Islamic liquidity management is hindered more by functional issues like maturity options and tradability than by simple numerical product availability.p.14
2. Backward integration shifts strategic focus from purchasing externally provided liquidity products to directly creating asset pipelines.p.15
3. Product structuring alone does not independently improve instrument access unless linked to upstream asset origination, issuer collaboration, and dedicated platforms.p.15
4. Shariah governance exerts the strongest multivariable influence on the operational success of backward integration strategies.p.11
5. Regulatory support acts as an essential baseline condition, but its real-world efficacy depends on practical Shariah architecture and market infrastructure.p.14
6. Dedicated origination and distribution platforms significantly raise the perceived accessibility of short-term Shariah-compliant instruments.p.11
7. Engaging directly in upstream transaction generation introduces operational complexity and concentration risks that require disciplined governance frameworks.p.18
8. A sequential explanatory mixed-methods design demonstrates that qualitative treasury timing mismatches match quantitative maturity regression findings.p.13