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Abstract

This study aimed to explore the concept and types of credit facilities and their relationship to the money supply. It also aimed to explain the concept of Islamic banks and their reality in Jordan, as well as the nature and types of financing formulas used by Jordanian Islamic banks in the facilities they grant and their impact on generating bank money. This was achieved through a presentation of statistical analysis models for the independent study variables, represented by credit facilities, the factors affecting them, and the extent of their impact on the dependent variable represented by the money supply. The study concluded that Islamic banks are part of the banking system, accepting deposits and granting credit facilities while contributing to the process of monetary expansion. However, the impact of these credit facilities granted by Jordanian Islamic banks remains limited, as monetary expansion is linked to various banking legislations that affect the volume of the money supply, such as the required cash reserve ratio and the legal liquidity ratio. Additionally, the commodity nature of these financing formulas used by Islamic banks ties the process of money generation and credit expansion to production, helping to balance the commodity stream and the cash stream, which ultimately limits the process of monetary expansion.

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