The Role of Salam and Parallel Salam in Achieving Economic Development: A Case Study of the Agricultural Bank of Sudan

Abstract

This study addresses the role of Salam and Parallel Salam in achieving economic development
through a case study of the Agricultural Bank of Sudan during 2012–2022. It aims to evaluate
the contribution of these two Islamic financing formulas to supporting productive activities,
particularly agricultural activities, and to identify the main challenges and risks associated with
their practical application.
The study adopts a descriptive documentary approach, drawing on documentary and secondary
sources, including official reports and publications issued by the Agricultural Bank of Sudan
and the Central Bank of Sudan, literature on Islamic finance, academic studies, and Sharia
standards issued by the Accounting and Auditing Organization for Islamic Financial
Institutions (AAOIFI).
The study describes and analyzes the application of Salam and Parallel Salam in the Sudanese
banking context, focusing on their contribution to productive activities and economic
development. It also examines the challenges and risks associated with their application and
identifies possible areas for improving their effectiveness. The findings indicate that Salam and
Parallel Salam can direct financial resources toward real economic activity, support agricultural
production, and stimulate economic activity. However, their effectiveness is affected by
production and delivery risks, price fluctuations, marketing, and storage. The study highlights
the importance of developing follow-up and risk-management mechanisms and improving the
marketing and institutional environment to enhance the efficiency of Islamic finance.