Need for Shariah Based Islamic Finance for Higher Education

Abstract

Islam has highlighted abundantly the importance of education for the humanity, society and the whole world. In fact, the first word of the revelation is “Iqra” which means to read. On the other side, the economies that have emerged in the past and are ruling now all have one common factor among them i.e. plenty of higher education. For a developing country like Pakistan, higher education plays a very imperative ansd significant role in the economic development. However, one can find a sweeping deterioration in the education while ascending upwards from primary to higher education. Researchers have found out several reasons for this diminutive higher education. Therefore, the aim of this study is to explore the factors that are associated with the continuation of higher education in Pakistan. This study also figures out the need to develop a Shariah -based financing for higher education. Data is collected from university students and professionals through structured questionnaire. Descriptive statistics, factor analysis and multiple regression analysis have been used to analyze the data. Results prove finance shortage as main hurdle against higher education. Besides, parental literacy and gender also have impact on continuation of higher education. Higher education commission of Pakistan and universities is offering insufficient number of scholarships. Respondents would like to opt for Shariah- based finance if provided by Islamic banks in Pakistan. This study tries to bridge the gap between higher education seekers and their finances.