Abstract:
International trade is an important sector in the economy that has great influence in the countries’
economic growth and developments. Islamic financial Institutions as like conventional institutions play
vital role to finance for international trade. The modes of financing are different depends on variants
services that are included such as financing for exporters, importers and producers. This research has
been carried out in order to identify the possible application of Islamic international trade financing by
Sri Lankan IFIs. This is a qualitative study whereby the data were collected from both primary and
secondary sources. Primary data were collected through direct interview and discussion. Secondary data
were gathered from journal articles, other research papers, books, annual reports of banks, and official
websites of IFIs LOLC AL-Falah and PLC Al-Safa. Kalmunai branches of both IFIs were selected as
sample of this study. The operational procedures and Shari’ah contracts involved in the processes of
international trade are identified. Further, the study has found some challenges in the practice and the
recommendation are provided to rectify those issues.
