Financial Exclusion, Soft Segregation and Moral Constraints as Drivers of Entrepreneurial Activities in Scottish Muslim Immigrants

Abstract

This study examines financial structures adopted by Muslim immigrant entrepreneurs in Scotland and the challenges they face accessing state-driven financial support. It explores the effectiveness of different financing models, emphasising how religious values and moral concerns shape financial decisions. The study suggests that formal, top-down state support often clashes with strong religious sentiments, prompting entrepreneurs to seek morally aligned, informal financing alternatives. Focusing on Scotland, particularly cities like Aberdeen, Dundee, Edinburgh and Glasgow, the research highlights the financial integration challenges faced by Muslim immigrants, underscoring their entrepreneurial innovations rooted in religious obligations. The paper analyses financial services available to these entrepreneurs, including the Scottish Growth Scheme, and identifies gaps and opportunities within Scotland's financial landscape. Through in-depth interviews with 26 Muslim immigrant entrepreneurs, the findings reveal a dependence on informal financing sources and a reluctance to engage with conventional banks due to religious prohibitions. This study ultimately provides insight into how financial exclusion, coupled with moral and religious constraints, drives innovation and alternative financial practices amongst Scotland's Muslim immigrant entrepreneurs.