Smart and Sustainable Islamic Finance to Overcome Challenges in Turbulent Environments Case study of Yemen during the period (2014-2022)

Abstract

The study aims to present a proposed model for sustainable smart financing to address the challenges faced by Islamic financial institutions in turbulent environments characterized by conflicts and wars, utilizing blockchain and artificial intelligence technologies while considering sustainability dimensions. The study focuses on the reorientation of studies regarding the reality of financial engineering in Islamic financial institutions as an introduction to the research subject, examines the impact of turbulent environments on Islamic finance through a case study of one Yemeni Islamic bank, and culminates in a detailed presentation of the sustainable smart financing model from Shariah and technical perspectives. To achieve its objectives, the study combines a descriptive methodology an analytical approach. The findings indicate that turbulent environments negatively affect the Islamic finance system, weakening its performance and sustainability. The crisis in Yemen has caused a significant decline in Islamic financing and investments, which have become concentrated in specific forms, particularly government financial instruments. Moreover, the crisis has directly impacted sustainable development and the ecological system. The study concludes that the proposed sustainable smart financing model can address the challenges of turbulent environments by introducing innovative Islamic financial tools based on stable digital currencies, enabling secure and sustainable financing and investments. It recommends enhancing collaboration and coordination among Islamic financial institutions, expanding the evaluation of the proposed model from Shariah, technical, and credit perspectives, and disseminating the study's findings to relevant stakeholders.