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Original Research Article

ACHIEVING BACKWARD INTEGRATION TO ISLAMIC FINANCE: A SOLUTION TO INADEQUATE SHORT-TERM LIQUIDITY INSTRUMENTS

Jubril salaudeen, Basheer Oshodi

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Jubril salaudeen Corresponding Author

Nungu Business School, Nigeria

Correspondence: jubrilsalaudeen@gmail.com

Abstract

This study examined whether backward integration could provide a viable institutional response to the inadequacy of short-term Shariah-compliant liquidity instruments available to Islamic financial institutions. We used a sequential explanatory mixed-methods approach, including quantitative analysis of 120 relevant financial professionals and qualitative views, grouped under treasury management, Shariah governance, market infrastructure, and institutional investment. We used descriptive statistics and ordered logistic regression for the quantitative analysis. Liquidity management was constrained by limited maturity options, an insufficient range of instruments, limited tradability, and concentration in a few liquidity products. The most significant impact came from limited maturity options. Mechanisms of "backward" integration from asset origination, cooperation with the emitter, and origination and distribution platforms dedicated to the instrument significantly contributed to the perceived availability and accessibility of instruments. Shariah governance is the most prominent institutional determinant of backward integration effectiveness, followed by market infrastructure and institutional capacity. The study integrated a five-pillar framework, including upstream asset origination, issuer collaboration, regulatory and Shariah governance architecture, market infrastructure, and institutional coordination. The study redefines the instrument shortage as an institutional supply issue. It shows how Islamic financial institutions can take on more of the origination, approval, and distribution of short-term qualifying instruments.

Keywords: Islamic Finance, Backward Integration, Liquidity Management, Islamic Money Market, Shariah-Compliant Instruments, Market Infrastructure, Shariah Governance.
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How to Cite

APA

salaudeen, J., & Oshodi, B. (2026). ACHIEVING BACKWARD INTEGRATION TO ISLAMIC FINANCE: A SOLUTION TO INADEQUATE SHORT-TERM LIQUIDITY INSTRUMENTS. British Journal of Advanced Research, 1(5), Article 027. https://doi.org/10.68263/BJAR-KQ95TKHJ

MLA

salaudeen, Jubril, and Basheer Oshodi. "ACHIEVING BACKWARD INTEGRATION TO ISLAMIC FINANCE: A SOLUTION TO INADEQUATE SHORT-TERM LIQUIDITY INSTRUMENTS." British Journal of Advanced Research, vol. 1, no. 5, 2026, article 027. DOI: https://doi.org/10.68263/BJAR-KQ95TKHJ

Chicago

salaudeen, Jubril, and Basheer Oshodi. "ACHIEVING BACKWARD INTEGRATION TO ISLAMIC FINANCE: A SOLUTION TO INADEQUATE SHORT-TERM LIQUIDITY INSTRUMENTS." British Journal of Advanced Research 1, no. 5 (2026): 027. https://doi.org/10.68263/BJAR-KQ95TKHJ

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ISSN 3153-709X
Tracking ID BJAR_OCT_26_077
Article No. 027
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Article Info
Journal BJAR
Volume Vol 1, No 5
Year 2026
Type Original Research Article
Licence CC BY-NC-SA 4.0
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