THE ROLE OF ISLAMIC BANKS IN FINANCING SMES WITH VENTURE CAPITAL" A PROPOSED FINANCING MODEL

Summary
SMEs and entrepreneurship generally suffer from a lack of access to finance and this is an important obstacle to their growth and development, banks and official financial institutions are reluctant to finance these institutions, which led to the thinking of looking for a new financing system in line with the nature of this sector and working to improve its access to the necessary financial resources through the creation and development of banking solutions and services Taking into account the financing capabilities of these institutions and their limited availability in providing the guarantees normally required by official banks and financial institutions, among these solutions, developed countries developed venture capital financing technology as a new type to solve the financing problems faced by emerging financing projects, particularly innovative ones, which helped to reduce the financing gap that SMEs have been experiencing for decades.
Despite the spread of this type of financing in the developed and developing countries of the world and its success, its contribution to the Arab countries is still limited despite the availability of financial resources and capital due to the lack of institutions able to manage it by employing it to finance small and medium-sized enterprises and entrepreneurial businesses that meet their needs at various stages of financing, and in light of these constraints and lack of sources of financing, difficulty in accessing investment capital through.
That is why Islamic banks have become the ideal solution to the problem of these institutions obtaining appropriate financing by financing them with venture capital because they deal with the principle of profit and loss sharing, which is fully compatible with risk capital, and for this reason the Islamic bank will not refrain from.
One of the most appropriate formulas for financing small and medium enterprises with venture capital are the two forms of financing by temporary speculation and diminishing musharakah, which are two of the Islamic financing modes adopted in Islamic banks.
Key words: Small and medium enterprises and entrepreneurial businesses-Venture capital-Islamic banks.