Part 4 includes a link to a description of the financing choices for Muslim immigrant entrepreneurs in Norwegian, followed by an English-language Literature Review by project participant, Juana Fakih.
Islam forbyr butikkeiere å ta opp lån. – Et problem for norsk økonomi, mener forskere
Financing choices for immigrant entrepreneurs in Norway
Litterateur review for EDS313, 30 credits
NMBU, autumn 2024
Juana Fakih, MS in International relation (Internship at Fafo from August-December)
Keywords: riba, immigrant, entrepreneurs, entrepreneurship, traditional financing, Islamic financing
Introduction
The diverse immigrant population of Norway is playing a bigger role in the nation's economy, particularly in terms of entrepreneurship. Smith et al. (2011), define the term entrepreneur as a person who launches and manages a business is an entrepreneur (Smith et al., 2011). When it comes to creating something new or improving something that currently exists, this individual is usually willing to take chances. Entrepreneurs seek to make their ideas a reality after seeing market possibilities. They are often creative, committed, and motivated to achieve (Smith et al., 2011).
However, starting and running a new firm is referred to as entrepreneurship. To make a company work involves planning, organizing, getting capital, and building a staff. Because it encourages economic growth, creates jobs, and introduces new products and solutions to the market. Therefore, entrepreneurship is important (Smith et al., 2011). To put it simply, entrepreneurship is the process of implementing ideas to address social demands or solve issues (Smith et al., 2011).
This literature review aims to clarify the importance of understanding financing choices for immigrant entrepreneurs in Norway, particularly Muslim population from different litterateurs.
According to Dabic et al (2020), they define an immigrant as a person who moves to another nation and stays there for a minimum of one year. People who were born in a different nation than their current one are typically referred to by this word. Their offspring are regarded as second-generation immigrants if they are born in the new nation (Dabic et al., 2020). Many immigrants launch their own companies but often have trouble obtaining funding. For this reason, it's important to think about the many funding options available to them. Traditional funding includes choices like loans from banks and assistance from the government (Smith et al., 2011).
Islamic financing, on the other hand, refers to standards based on Islamic law (Askari, Iqbal & Mirakhor, 2009). These two approaches will be the primary areas of this review due to the size of this review; I have chosen to focus on Islamic banking. Comparing these two approaches is intended to determine which is more effective for immigrant business owners, particularly those who have religious beliefs such as Islam.
One of the papers I will look into is written by Brekke and Larsen (2020). They wrote Allah, Villa, Volvo: Muslim Professionals in Nordic Countries and Their Financial Attitudes and Practice (Brekke et al., 2020). This paper used a mixed method to research how bank loans in the west challenge Muslims in the Nordic countries. Brekke (2018), Halal Money: Financial inclusion and demand for Islamic banking in Norway (Brekke, 2018), is a mix method research paper on how Islamic banking can be useful in the financial aspect and challenges for the Muslim population in Norway. Another paper is Immigrant Entrepreneurship in Norway by Vinogradov (2008). This paper used a mix method to research how immigrant people from different ethnicities in Norway start their entrepreneurship and the different factors that develop in the making (Vinogradov, 2018). Vinogradov and Jørgensen (2017), Differences in international opportunity identification between native and immigrant entrepreneurs. This research paper surveys 116 immigrants and 864 native Norwegian entrepreneurs. Particularly how factors such as language barriers, financial opportunities, motivation affect them and the different opportunities (Vinogradov et al., 2017).
Furthermore, Askari, Lqbal and Mirakhor (2011), New Issues in Islamic Finance and Economics: Progress and Challenges, write in their book about Islamic financiers, factors and challenges for a Muslim (Askari et al., 2011). Khan and Bhatti (2008), Islamic banking and finance: on its way to globalization, wrote an analysis and theoretical paper on the growth of Islamic banking and finance in different countries around the world (Khan et al., 2008). Munkejord (2017), Immigrant entrepreneurship contextualised: Becoming a female migrant entrepreneur in rural Norway, is a research paper with a qualitative method where she interviews different female immigrants in the north of Norway. The paper researches the gender gaps in immigrant entrepreneurship in Norway and the different challenges and factors (Munkejord, 2017).
These seven papers will be the main literature for this paper. In addition, I will use other sources in regard to concepts and explaining these throughout the paper. One of the sources I will use is Dabic, Vlacic, Dana, Sahasranamam and Glinka (2020), Immigrant entrepreneurship: A review and researched agenda, a research paper on immigrant entrepreneurship in the global word and how it effects immigrant entrepreneurs (Dabic et al., 2020). Mallette (2006), A framework for developing your financial strategy, which is about different financial strategy (Mallette, 2006). Kettell (2011) book, about different financial strategy, but mainly about Islamic financial and banking (Kettell, 2011). J, Smith, Lester Smith, Richard Smith and Bliss (2011), Entrepreneurial Finance: Strategy, Valuation, and Deal Structure, their book about the understanding of entrepreneurship, entrepreneur and financial strategy (Smith et al., 2011).
2. Main content
This section will contain the body of this review with four different main sections and their subsections: Challenges faced by immigrant entrepreneurs, traditional financing methods, Islamic financing as an alternative, case studies, and gaps in the existing literature.
Section 1: Challenges Faced by immigrant entrepreneurs
Traditional financing
In Norway, immigrant business owners often come across major challenges when attempting to get bank and other lender loans. The way bank’s view credit history is one of the main issues. Many immigrant companies lack the credit ratings and histories that traditional banks often need. These companies’ owners tend to be seen as borrowers with high risks due to their lack of history, which makes it difficult for them to obtain financing (Vinogradov et al., 2017). According to Vinogradov et al (2017), immigrant entrepreneurs may encounter unjust treatment if they don’t have a solid credit history, which make it difficult for them to launch or expand their companies. The need for financing is still a major barrier. It is possible that many immigrant business owners don’t have enough property or assets to qualify for financing from banks. Obtaining funding may become more difficult as a result. Differences in language and culture further increase the challenges. Many immigrants may be unaware of the requirements for obtaining a loan or the workings of the Norwegian financing system Vinogradov et al., 2017). Mallette (2006), notes that a lack of knowledge about these processes might result in frustration and lost opportunities. They may find it challenging to deal with loan conditions, show their company ideas, and to understand the specifics of loan agreements due to language issues (Mallette, 2006). As a result, some immigrant entrepreneurs may stop attempting to get loans and instead turn to illegal funding sources, which tends to be enough to meet their needs.
Difficult for Muslim entrepreneurs
Due to riba, or religious restrictions against interest, Muslim entrepreneurs have a difficult time obtaining typical financial services (Askari et al., 2009). Because of this prohibition, many Muslims are unable to use traditional loans that have interest payments attached, which might make it more difficult for them to get the money they need for business activities. Many Muslim entrepreneurs are thus unable to benefit from the same financial possibilities that are accessible to their non-Muslim competitors as Brekke et al (2020) point out in their research (Brekke et al., 2020).
According to Brekke et al (2020), in Norway, the lack of Islamic banking institutes contributes to these issues. Despite the substantial Muslim population, no bank provides sharia-compliant financial solutions, such as profit sharing or interest-free loans, because the concepts of Islamic finance are not accommodated by the current financial structure, previous attempts to develop Islamic banking have frequently encountered regulatory challenges (Brekke et al., 2020). According to Brekke et al (2020), Muslim entrepreneurs have few alternatives because of the financial institutions’ intentional negligence, which forces them to turn to riskier and illegal unofficial financing practices (Brekke et al., 2020).
In addition to having an impact on individual entrepreneurs, the absence of easily accessible financial services leads to larger problems of economic marginalization in the Muslim community (Brekke et al., 2020). Muslim entrepreneurs could find it difficult to expand their enterprises and fully engage in the economy without the right financial resources, which could result in social injustices. To establish a fair financial solution to everyone, regardless of their beliefs, the governments and financial institutions must understand this specific limitation that Muslim people feel on the financing in Norway (Brekke et al., 2020).
However, according to the finding of Brekke et al (2020), Muslim professionals in the Nordic countries such as Norway and other Nordic countries have different opinions on taking out loan, especially when it comes to religious considerations. Since riba is forbidden in Islam, many Muslims are hesitant about taking out traditional loan that have interest. According to the survey findings, good portions of Muslim professionals think that bank interest represents riba. 76% of professionals agreed or strongly agreed with this statement, indicating that various Muslim groups share an agreement on this matter (Brekke et al., 2020).
Regarding how to explain riba, the survey from Brekke et al (2020) revealed a divide through the Muslim community. Some Muslims have a more modernist stance, arguing that riba only applies to high-interest, exploitive lending. As a result, they believe that some forms of interest could be permitted in the financial system of today (Brekke et al., 2020). Others had a stricter view of loans. This illustrates how Muslim professionals balance their real financial requirements with their Islamic beliefs while making investment choices in western settings. This finding from the various studies shows us how some Muslim entrepreneurs could have a more liberal view on the financing and loans in Norway (Brekke et al., 2020).
According to the 40 participants from the interview of their studies (2020), a lot of Muslim professionals stay away from traditional loans due to their religious views. Instead, they investigate different approaches such as borrowing from other family members, friends or look for interest-free financing, to fund their businesses or personal needs. On the other side in the Nordic nations as stated above, there are few or no Islamic banking’s intuitions. Therefore, Muslim professionals find it challenging to take advantage of the same financial possibilities as their non-Muslim colleagues, particularly when it comes to expanding firms (Brekke et al., 2020).
Sections 2: Traditional financing methods
In this section I will write about the traditional financing approach that was stated in the introduction. What kind of approach this is and what it furthermore can do to immigrant entrepreneurs in Norway. This is viewed using relative research.
According to Vinogradov (2008) study, entrepreneurs in Norway have several options for obtaining capital to launch or expand their companies. Obtaining a bank loan is among the most typical choices. If the entrepreneurs have a strong financial history and a good business plan, banks will typically lend them money (Vinogradov, 2008). However, banks sometimes demand security in the form of real estate or personal belongings, which can make it challenging for new business owners to obtain approval. For instance, it might be difficult for a new business with no prior business experience to get a bank loan (Vinogradov, 2008).
Vinogradov (2008) writes about venture finance in her studies, which is another popular form of investment. Investors known as venture capitalists provide funds to companies with significant room for expansion, particularly in modern sectors such as technology. They often receive a portion of the business in exchange. Smaller, local firms might not be the greatest candidates for this kind of finance, but it is perfect for companies with the ability to expand fast. For example, if a Norwegian tech business has promise in the international market, it may be able to attract venture funding (Vinogradov, 2008).
Vinogradov (2008) writes that loans from the government are an additional resource for business owners. These awards are provided by government organizations such as Innovation Norway, which provides capital and assistance to new businesses that increase employment and the economy. These awards are very competitive and have strict criteria, even though they are non-repayable. For instance, a government grant may be given to an entrepreneur creating green energy solutions to help in the start-up of their company (Vinogradov, 2008).
In addition to these traditional decisions, more recent forms of raising money, such as microfinance, are gaining interest. People who might not be able to obtain conventional bank loans, such as those with minimal credit history at first, might apply for modest loans through microfinance such as migration. Besides that, fundraising allows entrepreneurs to raise modest sums of money from many individuals online. For example, small companies making handmade products might use an online platform such as a start-up to raise money by seeking donations from private supporters (Vinogradov, 2008).
Section 3: Islamic financing as an alternative
In section one, I wrote about the difficulty Muslim immigrants have been entrepreneurs in the West. In this section, I will write more in depth about Islamic financing as an alternative for Muslim entrepreneurs using various sources.
According to Brekke (2018), Islamic finance is based on ideas that promote ethical company behavior that is consistent with Islam's teachings and forbids injustice. One principal idea is that riba, which is sometimes defined as interest, is forbidden as it is viewed as unethical to make money by charging interest on loans. Rather, Islamic banking places a value on sharing profit and developing via businesses that concretely benefit society (Brekke, 2018). However, in contrast to traditional banking, which frequently puts risk onto the borrower (Vinogradov, 2008). Islamic finance places a value on risk-sharing, where investors and entrepreneurs split the profit and losses of a company (Kettell, 2011).
According to Askari et al (2011), Iljara, Musharakha and Mudarabah are important financial points that are designed to encourage moral investing free of interest. In Mudarabah someone offers the funds, while another contributes the company management skills. Losses are paid for by the capital provider, but profits are distributed based on a defined amount (Askari et al., 2011). A bank may, for instance, provide startup funding, share earnings without paying interest, and take on losses if the business fails. Musharakah is like a partnership in that each partner invests money and receives a percentage of the profits and losses based on the investment (Askari et al., 2011).
The last one, iljara, or borrowing, allows customers to make use of resources without complete ownership. In the real estate market, for example, the bank may purchase a home and borrow it to a customer, who eventually purchases the bank's interest over time, rejecting traditional interest-based mortgages (Askari et al., 2011). Muslim entrepreneurs are allowed to participate in financial activities that are consistent with their religious beliefs because of these Islamic approaches.
Islamic finance in Norway
Another study by Brekke (2018) looks at the factors using the need for Islamic banking to figure out the impact of this problem. The influence of traditional banking on Muslims entrepreneurs, the factors that indicate the need for Islamic banking such as education, age, origin, religiosity and national, and whether the need for Islamic banking is evolving are the three main topics that Brekke (2018) research on his study (Brekke, 2018).
Brekke (2018), used focus groups to interview 12 people in Norway and an online survey of more than 700 Muslims in Norway to find that over 90% of respondents think traditional banking is problematic since it involves paying interest. In Norway where there are no Islamic banking choices, this limitation provides a challenge for Muslims. Since many Muslims are unable or not willing to take out traditional loans, this financial exclusion may restrict economic involvement and have an impact on homeownership rates among Muslim and entrepreneurship (Brekke, 2018).
Brekke (2018) also investigated how the need for Islamic banking can be based on social factors, including education levels, age, and ethnicity. His research shows that although there is no link between these variables, interest in Islamic banking is very much determined by religiosity, as it shows by the amount of mosques attendance. The need for Islamic financial solutions is more likely to some from those who visit the mosque more often. These results also show us that often Muslim entrepreneurs that open a company and are taking interest are more on the liberal side of Islam (Brekke, 2018).
Finally, the last topic from his research, the need for Islamic banking grows according to Brekke’s (2018) interview. This is mostly amongst the younger Muslims who are becoming more conscious of and more interested in financial practices that are consistent with their values. A lot of people complain about the sharia law and think that this may help them become more financially included in Norwegian society. According to Brekke (2018), the absence of Islamic banking options continues to be a barrier to Muslim socioeconomic integration in the west, and religious traditions have a very big influence on how people behave financially and from an entrepreneur’s perspective (Brekke, 2018).
Countries that have Islamic banking
On the contrary, there was one article from Khan et al (2008) about how Islamic banking and finance have had a global expansion in this word. The article describes how Islamic banking began in the Middle East and has since expanded around the world, with Saudi Arabia, Bahrain and Dubai serving as major bases for Islamic financial services (Khan et al., 2008). Islamic banking and finance are also expanding in southeast Asia, which includes Malaysia, Singapore and Indonesia and it has lately made progress in western nations like the United States of America and the United Kingdom. These areas are starting to develop laws and financial products specially for Muslim such as the sharia investment fund and Islamic mortgagee (Khan et al., 2008). For instance, Bahrain chic is home to several financial institutions and has established an effective regulatory structure for the sector and has become known as an important base for Islamic baking. Also, Muslim people in Europe and the US now have access to financial solutions that are in line with their ideals because of western nations like the UK beginning to implement Islamic banking methods (Khan et al., 2008).
However, the article also mentions that Islamic banking has challenges such as the limited blending into the traditional banking system, particularly in nations where Islamic ideals are still not completely reflected in financial rules. It can be challenging for banks to function in accordance with traditional Islamic principles in western market since Islamic banking has had to adjust to new tax law and regulatory frameworks. Another issue is the lack of knowledge in Islamic banking, particularly in non-Muslim nations where there may be misunderstandings or a lack of instruction on its work. Islamic banking has the potential to have an important impact in the financial system of Norway, where the number of Muslims is increasing (Khan et al., 2008).
Norwegian Muslim entrepreneurs can be looking for financial services that complement their moral and religious principles. Islamic financial services such as loans, savings accounts, and investment options based on risk-sharing and fairness may see increased demand as the Islamic finance sector grows worldwide (Khan et al., 2008). But for this to happen, financial institutions both Islamic and traditional banking must encourage the supply of these products and increase the popularity of these services in Norway (Khan et al., 2008). The article from Khan et al (2008), has shown us that Muslim entrepreneurs in countries like Norway have a lot of options to obtain financial services that are consistent with their principles, despite integration and challenges (Khan et al., 2008). The Islamic banking may become an even more important component of the global financial system as it develops further (Askari et al., 2011).
Section 4: Methodology and theory
In this section I will write about 3 different sources and their methodology and theories on their paper.
The study written by Vinogradov (2008), on immigrant entrepreneurship in Norway provides information on how immigrants can obtain financing for their companies. The study used a mixed methods approach where she combined a quantitative survey of immigrant entrepreneurs with qualitative interviews with specialists from the field of entrepreneurship (Vinogradov, 2008). A deeper understanding of possibilities and difficulties experienced by immigrants in the Norwegian business is made possible by this method. The importance of community financiers is one of Vinogradovs (2008) main research conclusions. Many immigrant company’s owners obtain financing from local ethnic organizations that work to assist new businesses in their communities (Vinogradov, 2008). To help a new business owner in starting a café or a store, for example, a local provides micro loans.
These organizations offer not only financial help but also guidance and mentoring since they are aware of the cultural background of the entrepreneurs. Partnership with religious groups is an important form of profits in addition to helping the community. Many synagogues, churches and mosques provide help to their members to establish their own businesses. A mosque may for instance offer interest free loans or host seminars to teach its members how to run their business (Vinogradov, 2008). For immigrants who might not have access to typical bank services because of language barriers or a lack of knowledge on Norway’s financial system, this help can be important for them in regard to their business start-ups (Vinogradov. 2008).
Additionally, Vinogradov (2008) in her research highlights that immigrant business owners often use the strategy of forming cooperatives. They can share expenses, collaborate on assists, and lower individual risk by working together. To promote and sell their product and use their company to get bigger (Vinogradov, 2008). Vinogradov’s (2008) research furthermore shows the drive and creativity of Norwegian immigrant business owners. Immigrants discover methods to finance their business through for example cooperative, religious and collaborations, and community support. This research shows how critical it is to understand the challenges experienced by immigrant entrepreneurs and the local solutions they embrace to help build their startup businesses (Vinogradov, 2008). According to Vinogradov’s (2008) research, we learn how immigrant entrepreneurs contribute to Norway's business dynamic and diverse economy by using social networks and local help, demonstrating the possibility of rebuilding businesses via teamwork and community help (Vinogradov, 2008).
Vinogradov (2008) used seven different theories in her research paper: cultural thesis, discrimination and the blocked mobility thesis, social capital and utilization of ethnic resources, individual characteristics and selective migration, middleman minority theory, Waldinger el al`s interactive model and mixed embeddedness theory (Vinogradov, 2008). These seven theories have different meanings, but one theory that stuck out and was brought up in all the research studies used in this paper, was cultural thesis. Vinogradov (2008) researched the relationship between cultural theories and immigrant entrepreneurship, focusing on which a person's cultural background might affect their decision to start their own business (Vinogradov, 2008). Vinogradov (2008) claims that cultural theories, which imply that cultural norms form their native nations may increase their decision to start up their own company, help explain why some immigrant groups are overrepresented in entrepreneurship (Vinogradov, 2008). Weber’s cultural thesis which maintained that certain cultural values such as the protestant ethic of study and reason create circumstances that encourage entrepreneurial behavior, is consistent with this idea (Vinogradov, 2008).
Vinogradov (2008) explains the orthodox and reactive theories as the two primary ideas within cultural explanations. According to orthodox cultural theory, values from their own culture are what contribute to some immigrant groups as entrepreneurs. For example, immigrants may be more likely to pursue entrepreneurship if their culture encourages hard work and indecencies. However, in reactive cultural theory, immigrants engage in self-employment due to labor market limits and develop entrepreneurial views in reaction to the lack of possibilities in their new country (Vinogradov, 2008). According to Vinogradov (2008), these ideas demonstrate how an immigrant cultural background might impact their entrepreneurial career, either as a practical reaction to their new surroundings or because of ideals they got from their culture (Vinogradov, 2008).
Another research on entrepreneurs financing is Vinogradov and Jørgensen (2017), who studied immigrant entrainers in Norway, these entrepreneurs used a variety of strategies to get financing for their businesses. 116 immigrants were among the 1328 entrepreneurs surveyed for the research. The methods these business owners used to find global opportunities and various tactics to obtain financing were the main topic of this survey. Community financing was one of the main strategies found. Immigrant business owners look to their local communities for both financial and spiritual assistance (Vinogradov et al., 2017). This kind of financing depends on unofficial networks, where business owners may present their concepts to locals who are more likely to finance their businesses due to having close connections. The study also looked at connections with religious organizations as an important source of finance (Vinogradov et al., 2017).
As Vinogradov (2008) and Vinogradov and Jørgensen (2017) research showed, religious organizations are an important support network for many immigrant’s business owners, by providing both financial help and a sense of community both from cooperatives, collaborating and religious networks (Vinogradov, 2008) and (Vinogradov et al., 2017). Each study shows that in some cases collaborating with other immigrant entrepreneurs, support from religious organizations and cooperatives can help with financial for immigrant entrepreneurs and their businesses. This can be a helpful thing for a business startup because of the help from other people that can help them with the language barriers, financial barriers and to understand the policy of Norwegian entrepreneurship startup in the traditional financial and the understanding of cultural theory.
However, in the section of Brekke et al (2020) research on Islamic financial in the west written in the section of difficulty of Muslim, they researched the effects of secularization they’re on Muslim communities in the west, with a focus on how religious practices and beliefs change as Muslims relocate to new, secular environments (Brekke et al., 2020). Whether Muslim identity remains strong or becomes more secular is one of the main questions they present, particularly for the second and third generations. They point out that secularization theory may occur at both the individual and social levels. Secularization at the social level refers to the growing distance between religion and other aspects of society, such as politics, the legal system and education (Brekke et al., 2020).
In modern countries, when economic and financial institutions are taking center stage, this division is a process some refer to as “financialization”. By bringing religious values into finance, Islamic finance, which seeks to match financial operations with Islamic principles, may resist secularization according to (Brekke et al., 2020). This desire to start-up businesses by Islamic principle may be an aspect of a broader rising of Islamic principles in modern society, which is referred to as Islamization. In a secular culture, entrepreneurship may serve as a means of maintaining cultural and religious identity, as seen by a rise in financial practices that are consistent with Islamic principles among Muslim entrepreneurs in the West (Brekke et al., 2020).
Section 5: Gaps in the existing literature
As previously mentioned by previous research one of the main gaps discovered in reading the different research papers, was the lack of focus on gender-specific challenges in financing immigrant entrepreneurs. One of the studies delves into female immigrant entrepreneurs, particularly, Munkejord’s (2017) research was about the motives and experiences of 18 female immigrant entrepreneurs in Finmark and Northern Norway, where immigrants formed a small portion of the population. According to the study, Finmark offers a distinctive environment for immigrant women who seek entrepreneurship against a variety of chances and obstacles because of its limited population and distance (Munkejord, 2017).
According to Munkejord’s (2017) findings, these women launch their firms for four primary reasons. First, when alternative work opportunities are few or unattractive, some people turn to entrepreneurship to escape unemployment. Second, self-employment is seen by some as a strategy of avoiding underemployment, which frequently refers to positions that are below their skill level because of things like qualifications from the CV. Third, some women choose to become entrepreneurs to live sustainably in Finmark because of its distinctive way of life. Finally, some women regard owning a business as a logical next step in their careers, particularly if they are already well qualified for the job but want more control over their work-life (Munkejord, 2017).
According to Munkejord’s (2017) results, regional and family aspects frequently have an impact on launching a firm. Most women had children, and many came to Finmark because of their partners. Their entrepreneurial journey is influenced by combining ties to their families and managing in a society that offers small chances for immigrants. By demonstrating that traditional concepts, such as the “ethnic enclave economy” model, could not be effective in remote areas, this research improves our understanding of immigrant entrepreneurship (Munkejord, 2017). Immigrants frequently turn to their ethnic group for support in big cities, but these networks are less stable in smaller towns like finmark. Rather immigrant entrepreneurs adjust to the local economy and culture. According to Munkjord’s (2017) research she writes that they require a framework that considers factors that significantly influence business outcome, such as family circumstances and smaller location, in addition to race, genders, and class (Munkejord, 2017).
The findings reveal research gaps, particularly regarding the long-term effects of Islamic financing on immigrant business and the challenges faced by immigrant women in obtaining capital. There is a need for future research comparing various immigrant groups, in particular how law changes can make bank finance more accessible to Muslim immigrant entrepreneurs (Munkejord, 2017).
The research uses fieldwork and interviews to provide understanding on the varied experiences of female immigrant entrepreneurs and the larger social and economic factors that determine their path on entrepreneurship. The research improves the gaps on immigrant entrepreneurship by focusing on smaller towns, female entrepreneurship and provides an understanding of the difficulties and motivations that control these individuals (Munkejord, 2017).
6. Conclusion
In conclusion the major challenges experienced by immigrant entrepreneurs, especially those of Muslim background are the main topic of this literature review on immigrant entrepreneurship in Norway. One major obstacle is the difficulty of obtaining traditional financial methods because of things like cultural differences, language limitations, and lack of credit history. These difficulties are made worse for Muslim entrepreneurs by the Islamic restriction on interest, also riba, which makes traditional bank loans inappropriate. From the standpoint of the immigrant entrepreneur. These obstacles frequently lead them to look for help from their local communities, ethnic organizations, and religious groups, which offer both financial assistance and cultural help. Vinogradov (2008) and Vinogradov and Jørgensen (2017) have observed that these community-based networks, which include loans from religious and ethnic groups, provide an alternative to traditional banks and are necessary to get over obstacles to entry in the Norwegian entrepreneur environment.
For Muslim entrepreneurs, Islamic finance that provide interest free and moral financial solutions like profit sharing as an important solution. However, Brekke et al (2020) points out that Norway’s lack of Islamic banking options restricts Muslim entrepreneurs access to finance. Policy makers and financial institutions must incorporate sharia compliant goods into the market to allow Muslim entrepreneurs to fully engage in the financial system while upholding their religious beliefs, as indicated by the country’s increasing need for Islamic financing.
Additionally, to overcome difficulties associated with cultural adjustment and restricted access to official financial institutions, immigrant entrepreneurs frequently turn to alternative sources of financial, and assistance such as collaborating with other business owners or religious communities. This dependence on community-based associates shows the importance of personalized financial solutions that consider religious and cultural requirements. To Fill in knowledge gaps, such as the gender specific difficulties experienced by immigrant women and study the long-term impact of Islamic financing on immigrant business, more research is important on this topic. Government official can potentially close the gap in financial inclusion and assist immigrant entrepreneurs in making contributions to the Norwegian economy by establishing culturally accepted financial products and financing structures.
4. References
Askari, H., Iqbal, Z., & Mirakhor, A. (2011). New issues in Islamic finance and economics: Progress and challenges.
Brekke, T., & Larsen, M. C. (2020). Allah, villa, Volvo: Muslim professionals in the Nordic countries and their financial attitudes and practices.
Brekke, T. (2018). Halal Money: Financial inclusion and demand for Islamic banking in Norway. Research & Politics, 5(1), 2053168018757624.
Dabic, M., Vlacic, B., Paul, J., Dana, L. P., Sahasranamam, S., & Flinka, B. (2020). Immigrant entrepreneurship: A review and research agenda. Journal of Busniess Research, 113, 25-38.
Kettell, B. (2011). Introduction to Islamic banking and finance (Vol. 551). John Wiley & Sons.
Khan, M. M., & Bhatti, M. I. (2008). Islamic banking and finance: on its way to globalization. Managerial finance, 34(10), 708-725.
Mallette, F. (2006). A framework for developing your financial strategy. Corporate finance Review, 10(5), 11.
Munkejord, M. C. (2017). Immigrant entrepreneurship contextualised: Becoming a female migrant entrepreneur in rural Norway. Journal of Enterprising Communities: People and Places in the Global Economy, 11(2), 258-276.
Smith, J., Smith, R. L., Smith, R., & Bliss, R. (2011). Entrepreneurial finance: strategy, valuation, and deal structure. Stanford University Press.
Vinogradov, E., & Jørgensen, E.J.B. (2017). Differences in international opportunity identification between nativ and immigrant entrepreneurs. J Int Entrep 15, 207-228. https://link.springer.com/article/10.1007/s10843-016-0197-5#citeas
Vinogradov, E. (2008). Immigrant entrepreneurship in Norway. https://nordopen.nord.no/nord-xmlui/handle/11250/140348