The effect of credit facilities granted by Jordanian Islamic banks on the money supply Analytical study for the period from 2011-2020

Abstract

This study aimed to know the concept and types of credit facilities and their relationship to money supply, and to explain the concept of Islamic banks and their reality in Jordan, and the nature and types of financing formulas used by Jordanian Islamic banks in the facilities granted by them, and their impact on generating bank money, through a presentation of statistical analysis models for the independent study variables represented by Credit facilities, the factors affecting them, and the extent of their impact on the dependent variable represented in the money supply.

This study concluded that Islamic banks are part of the banking system, which accepts deposits and grants credit facilities and contributes to the process of monetary expansion, but the impact of these credit facilities granted by Jordanian Islamic banks remains limited, as monetary expansion is linked to many banking legislations that It affects the volume of the money supply, such as the compulsory cash reserve ratio and the legal liquidity ratio, in addition to the commodity nature of these financing formulas used by Islamic banks, as they make the process of deriving money and expanding credit linked to production, which helps balance between the commodity stream and the cash stream, which limits the process of monetary expansion.

Keywords: credit facilities, Islamic banks, Ababna, money supply.