Tuesday, May 19, 2020

Contribution of Islamic Civilization in Biotechnology - Free Essay Example

Sample details Pages: 3 Words: 787 Downloads: 9 Date added: 2019/10/10 Category Religion Essay Topics: Islam Essay Did you like this example? Muslim reflection on biotechnology are manifested by enormous divergences in the representations of reality that impact ethical deliberations. Due to the cultural and political diversity of Muslim civilizations around the globe, attain meaningful harmony is very tough. Certain key changes that Muslim ethical practices experience under pressures of rapid modernization and globalization, with its associated agonies, debates about biotechnology show the weakness of Muslim ethics from a variety of outlooks. Don’t waste time! Our writers will create an original "Contribution of Islamic Civilization in Biotechnology" essay for you Create order Islam is truly a system of life that represents the important sphere of connection with Allah, with the human beings along with other living organisms. The associations to be well reputable, three important axes of Islamic cores which highlighted are faith (tawheed), workshop (ibadah) and morality (akhlaq). These principles will balance and keep one’s moral and spiritual beliefs while continuing to strive on the path in which leads to Allah’s wish. Islamization of knowledge is a method which combines the ideologies of educational philosophy of Quranic science into the national education curriculum with the intention to integrate science and theological knowledge to upload the understanding and the civilization related to Islam. Science is an analysis, synthesis and philosophy of the universe. CONTRIBUTIONS In biotechnology faith is strictly linked to the question of religious principles, morals and ethics. This was further supported by that the humanitarian problems that frequently become a serious arguments between the scholars and scientists which contains human cloning, molecular biology and genetics. In the view of religion and law, human cloning is considered as a risk to social life and it will disturbs the personal organization as it is actually a effect of an asexual reproduction. According to the Islamic view based on creation, the formation of human embryo is the role of male and female cells in the practice of sexual relations which are confined or permitted to a legal marriage. Hence, offspring ancestry or family bond between the child and his parents is evidently recognized. Another negative outcome comprise a marriage that is no longer essential as a technological development in the modern world has generated new desire in the minds of most people specially among infertil e pair or the couples whose children died in dreadful accident. When human population is denied, humaneness will be demolished as human clones do not have a soul. Due to the inferences that cloning holds, Islam consider it as religious as well as ethical violation and thus such technology should not be practiced at all. International Islamic scholars exclude and act against all forms of human cloning and these include Said Ramadhan al-Buti, Abdul Aziz bin Baz, Dr. Wahbah al- Zuhayli, Dr. Gamal Serour , Dr. Muhammad Sayyid Tantain, Sheikh Muhammed bin Saleh al-Othimin, Dr.Nasr Farid Wasil, Dr. Muhammad Syaikh Mukthar al- Salami, Abd.al-Muhsin al-Turki, Suleiman Al-Ashqar. Certain Islamic groups and experts around the world which call for forbidding of human cloning. A sudden development in biotechnology has raised several problems and arguments on the Islamic legislation between Muslims all over the world. The results of new theories in biotechnology have always caused a problem whether they are right or wrong. Many findings are only based on the logical reasoning. Some of them are manipulating the outcomes by not revealing the real facts and truth. This unprincipled issue has been debated or raised up in the international conference on bio-etiquette held in Beirut. Numerous proposals have been highlighted in the conference to confirm the compatibility between biotechnology and value or moral of human kind such as: †¢ The significance must be given to the formation of a national committee to decide the role of culture in facing the challenges related to biotechnology. †¢ The necessity for the agreement to harmonize bio-etiquette with the local and national situations. †¢ Legislative mechanism and institutions are desired to regulate person’s greediness in biotechnological commerce. †¢ To improve plans in generating a consciousness associated to bio-etiquette, so that one make a choice based on correct information. Therefore, the integration between biotechnology and theology appears to be solves the problem by teaching the moral values and Islamic etiquette. SUMMARY The contribution of Islamic civilization in the field of biotechnology. Some people accepted the technologies were others are not accepting the new or modern technologies in related with the religion Islam. According to the Islamic religion, they will not agree with the artificial methods of reproduction that are done asexually such as human cloning, molecular biology, genetics etc. many Muslim scholars stay against the new artificial technologies developed in the case of reproduction. The civilization in the field of biotechnology faith is strictly linked to the question of spiritual beliefs, morals and ethics. The integration between biotechnology and theology appears to solve the problem by teaching the moral values and Islamic etiquette.

Monday, May 18, 2020

Immanuel Kant’s Critique of Pure Reason - 1379 Words

The Transcendental Deductions of the pure concept of the understanding in Immanuel Kant’s Critique of Pure Reason, in its most general sense, explains how concepts relate a priori to objects in virtue of the fact that the power of knowing an object through representations is known as understanding. According to Kant, the foundation of all knowledge is the self, our own consciousness because without the self, experience is not possible. The purpose of this essay is to lay out Kant’s deduction of the pure concept of understanding and show how our concepts are not just empirical, but concepts a priori. We will walk through Kant’s argument and reasoning as he uncovers each layer of understanding, eventually leading up to the conclusion†¦show more content†¦In order for us to have knowledge, these concepts a priori have to be united, synthesized. Therefore, in general, we need two concepts for knowledge; synthesis and receptivity. Synthesis, as mentioned abo ve, is when we use the data we obtained from senses and unite it together with intuition and receptivity, as defined by Kant â€Å"can make knowledge possible only when joined with spontaneity† (52). This spontaneity arises from the threefold synthesis which he lays out for us in the rest of the deduction; the synthesis of apprehension, the synthesis of reproduction, and the synthesis of recognition. In the first part of the threefold synthesis, Kant discusses the role of unity of intuitions. Intuition, as defined before, is a way through which knowledge is formed about the object and through which we think of the object. Thus, all representations of the object as Kant points out are subject to time and each representation, for single moment, can never be anything without absolute unity. Through this idea, the term synthesis of apprehension is refers to the idea that intuition, although offer something manifold, cannot be enough without synthesis as the intuition is containe d in one representation. Simply stated, it is through the intuition, which contains a manifold, and this manifold cannot be derived with a single representation. Kant’s argument in this part ofShow MoreRelatedCritique Of Kant1376 Words   |  6 PagesDefining Kant’s Critique of Pure Reason and its Relation to the Science of Metaphysics The understanding itself, in regard to representations and objects, is the paramount focus of Immanuel Kant’s (1724-1804), Critique of Pure Reason (1781/1787). Although there is a manifold of philosophical definitions of what the critique of pure reason is defined as, this essay will assist in alleviating the flux that occurs when comprehending the meaning of Kant’s, Critique of Pure Reason. After reading mostRead MoreKant : The Father Of Enlightenment1071 Words   |  5 PagesEnlightenment The 18th Century is referred to as the Age of Reason or Enlightenment as it was during this period that reason and individualism was advocated as a means of power. Science and reason were revolutionizing society by challenging the facts deeply rooted in tradition. This new rational way of thinking used logic to arrive at conclusions. Immanuel Kant, a German philosopher, was one of the primary figures of this era that cultivated reason and whose works have revolutionized modern philosophyRead MoreThird Breaking Down His Most Important Philosophies1097 Words   |  5 Pageshe came up with such ideas. B. Provide example/ apply to life: 1. Groundwork of the Metaphysics of Morals 2. Metaphysical Foundations of Natural Science 3. Critique of Practical Reason 4. Critique of the Power of Judgment 5. Critique of Pure Reason a. Knowledge b. Metaphysics Topic: Critique of Pure Reason In order to understand Kant’s position, we must first understand the philosophical environment that influenced his thinking. There are two major historical movements in the early modern periodRead MoreKantian Ethics And The Categorical Imperative Essay1581 Words   |  7 PagesAnalysis of Kantian Ethics and critiques In Elements of Pure Practical Reason Book, I, Immanuel Kant, a prominent late Enlightenment Era German philosopher discusses his most famous ethical theory, the â€Å"Categorical Imperative.† The â€Å"Categorical Imperative† is a proposed universal law in stating all humans are forbidden from certain actions regardless of consequences. Although this is the general definition of this ethical theory, the Categorical Imperative† exists in two above formulations, A strictRead MoreThe Most Influential Thinkers Of The German Enlightenment Era1119 Words   |  5 PagesImmanuel Kant was born April 22, 1724 in Kà ¶nigsberg. Kant is considered one of the most influential thinkers of the German Enlightenment era. He could easily be labeled one of the greatest and most important Western philosophers of all time. Kant was born the fourth of nine children to Johann and Anna Kant. His father was a harness maker, and the large family lived a rather humble life. The family practiced Pietism, an 18th-century branch of the Lutheran Church. As a result of this, Kant’s earlyRead MoreImmanuel Kant s Philosophy And Philosophy1389 Words   |  6 PagesResearch Paper- Immanuel Kant Immanuel Kant was a famous philosopher whose philosophical influences impacted almost every new philosophical idea, theory, concept etc. In a sense, he was considered the central face of contemporary philosophy. Kant spent his whole life in Russia. Starting out as a tutor, to then a professor, he lectured about everything; from geography to obviously philosophy. In his early life, he was raised to emphasize faith and religious feelings over reason and theological principlesRead MoreSummary of Immanuel Kants Life Essay1100 Words   |  5 PagesSummary of Immanuel Kants Life Immanuel Kant (1724-1804) spent all of his life in Kà ¶nigsberg, a small German town on the Baltic Sea in East Prussia. (After World War II, Germanys border was pushed west, so Kà ¶nigsberg is now called Kaliningrad and is part of Russia.) At the age of fifty-five, Kant appeared to be a washout. He had taught at Kà ¶nigsberg University for over twenty years, yet had not published any works of significance. During the last twenty-five years ofRead MoreKant s Theory Of Rights929 Words   |  4 Pagesindividual wants to do it. Duty motive involves individuals that do not get any personal benefit from their actions. (M.J Sandel, 2009) Kant’s theory of rights involves a strict logical deduction of the principle of justice from the moral law. The principle of justice must fix human rights that would make any government respect and enforce every individual autonomy. In Kant’s readings, â€Å"autonomy is the universal ethical ideal for all individuals, and its realization requires the political commitment toRead More An Analysis of Solipsism in Kant’s Critique of Pure Reason Essay2201 Words   |  9 PagesAn Analysis of Solipsism in Kant’s Critique of Pure Reason My goal is to examine solipsism and discover how Immanuel Kants Transcendental Idealism could be subject to a charge of being solipsistic. Following this, I will briefly review the destructive impact this charge would have on certain of Kant’s positions. After the case for solipsism is made, I intend to describe a possible line of rebuttal from Kant’s perspective that could be made to the charge. The issue of solipsism is intriguingRead MoreKant s Philosophy On Moral Philosophy1515 Words   |  7 PagesImmanuel Kant presented his most notable positions on moral philosophy in his book The Groundwork of Metaphysics of Morals. Georg Wilhelm Friedrich Hegel subsequently presented a number of objections to Kant’s positions, mainly in his book The Phenomenology of Spirit. Hegel presents objections to Kant in two different ways, implicitly and explicitly. Hegel gives arguments against Kant’s moral theory as well as the general philosophical thought that produces the moral theory that Kant presents. But

Wednesday, May 6, 2020

Poems of Puritan Authors Themes of Religious Beliefs in a...

Domestic Life in Poetry Since well before the United States became its own independent nation, the people of this land have worked to develop a purely unique identity, which was at least in the beginning, ruled by the religious beliefs of the population. Part of the structure of this identity, as with the cultural identity of any developing nation, has been created through the literature of American authors. When the Puritans came to the New World, they led a life that was focused on their religious beliefs. The church, prayer, and devotion to God were what dictated the behaviors of all people and the cultural development of those people. They left England to escape persecution because their religious practices demanded a rigid interpretation of the Bible, and the leading of a very simple life with stoic and unceremonious religious services. Anne Bradstreet, a Puritan, is arguably the most famous writer to come out of this period. However, there were other poets writing in this time as well including male p oets Michael Wigglesworth and Edward Taylor. In comparing the three, and taking particular interest in Anne Bradstreets poem Contemplations, it becomes evident that religion was an integral part of Puritan life, permeating into all other parts of life. In both the poems of Wigglesworth and Taylor, the reader cannot help but notice a somber tone. Their poems are reflective of the Puritan belief in a God-centric life and that all their endeavors should express their

The Code Of Ethics And Values - 1086 Words

Each individual has a code of ethics which helps to establish morals. Morals play an important part when it comes to determining what is right and wrong. You should also have core values. I think the most important value to have is integrity. Integrity means to be honest in everything you do and to have high morals. I will be honest, sincere, and reliable. Another important value to have is to be caring. Each and every day, I will be considerate and help those that need it. Being caring means having a kind personality which I think is an important aspect to have. Lastly, I would say that having a good attitude is important. I will always have a positive attitude and will never be arrogant. It is important to have all these values because in the field I am going in, you need to have integrity, be caring, and have a positive attitude. When making decisions, core values allow me to help structure my ethical standards from which I base decisions off of. Each day I am faced with different situations in which my ethical standards are tested. I have a mindset that when deciding what to do in different situations I try and have it result in the greatest good for the greatest number of people. Selflessness is my core ethical standard, however compassion is another value I carry. When reacting to events in my life, I try to remember to treat others how I would like to be treated. These two main standards are the basis for my ethical standards, and help me to decide what actions toShow MoreRelatedValues And Code Of Ethics1222 Words   |  5 Pagesher own set of values. A personal code of ethics by which feels he or she should abide throughout life. When one decides to enter the field of social work for their profession, there is a new list of values and code of ethics he or she must adopt. These are guidelines set by the National Association of Social Workers in the NASW Code of Ethics. Considering each person is different and therefore has different values he or she feels are important, each individual’s personal values could be congruentRead MoreThe Code Of Ethics And Values902 Words   |  4 PagesAs a social work undergraduate, we have several queries regarding why it is so important to follow the NASW code of Ethics and values that relate to human diversity, with regard for the worth and dignity of all persons, as applied to a specific case where we are delivering social work. It is very essential to recognize the five core values of social work, service, social justice, dignity and worth of the person, importance of human relationships, and integrity and competence on our occupation ofRead MoreEthics The Code Of Values And Moral Principles2156 Words   |  9 PagesWhat is ethics? Ethics a philosophical term originating from Greek word â€Å"ethos† meaning custom or char acter. It is concerned with describing and prescribing moral requirements and behaviors, which suggests that there are acceptable and unacceptable ways of behaving that serve as a function of philosophical principles (Minkes, Small, Chatterjee, 1999). Ethical behavior is defined as behavior which is morally accepted as â€Å"good† and â€Å"right† as opposed to â€Å"bad† or â€Å"wrong† in a given situation (SimsRead MoreCode Of Ethics : Nursing Values And Ethical Responsibilities1602 Words   |  7 PagesI. CODE OF ETHICS IN NURSING There are seven primary fundamental values in the code of ethics for registered Nurses These values are entitled as â€Å"Nursing values and Ethical Responsibilities.† (Centennial Edition, 2008) ï  ¶ Nursing Values and Ethical Responsibilities 1) Providing Care Nurses should be able to provide safe, skilled and proficient, solicitous care to the patients. The relation between the nurse and the patient. 2) Promoting Health and Well-Being Nurses should be enable to work withRead MorePersonal Code Of Ethics And System Of Moral Values1063 Words   |  5 Pagesshowing him how it is to be a leader. Integrity is expected of all health professionals in the work place. A leader demonstrates integrity by being consistently truthful, honest, and reliable. A nurse leader adheres to both a personal code of ethics and system of moral values. A leader has a positive attitude that helps to motivate others to join in the purpose. Leaders have initiative and take the first step to make it happen. Leaders have lots of energy and enthusiasm which enables them to get thingsRead MoreThe New Zealand Counselling : Code Of Ethics And Their Core Values1643 Words   |  7 PagesEthics Essay Counselling This essay will outline and discuss four ethical principles included in the New Zealand Counselling: Code of Ethics (NZAC), and their core values. Two ethical dilemmas will also be applied to a case study. Finally, the essay will address three avenues of complaint the client could possibly pursue. For the objective of this essay I will be working as a counsellor for the Blakely family. Specifically, I am assisting Darren, 40 (father) and his child Ciaran, 13 with theirRead MoreNursing Code Of Ethics, Personal And Societal Values, And The Legal Aspects Of The Nursing1251 Words   |  6 Pagesindividuals (Haugh Mildon, 2005). In this research paper, I will consider two case studies from the perspective of the nursing code of ethics, personal and societal values, and the legal aspects and responsibilities of the nurse. The Nursing Code of Ethics According to the American Nurses Association (ANA) Code of Ethics for Nurses with Interpretive Statements (2015), the code â€Å"establishes the ethical standard for the profession and provides a guide for nurses to use in ethical analysis and decision-making†Read MoreCode of ethics serves as the moral compass that directs and guides the integrity, values, and1500 Words   |  6 PagesCode of ethics serves as the moral compass that directs and guides the integrity, values, and beliefs of an organization. A code of ethics clarifies to employees what the company stands for and its expectations for employee conduct (Daft, 2013). A well-written code is a true commitment to responsible business practices in that it outlines specific procedures to handle ethical failures. Within the research enterprise, the code of ethics ensures that research projects involving human subjects areRead MoreProfessional Ethics and Values1020 Words   |  5 PagesRunning head: PROFESSIONAL VALUES AND ETHICS Professional Values and Ethics University of Phoenix Professional Values and Ethics What is the difference between values and ethics? Values are rules by which people make decisions about what is right versus wrong; good versus bad and what one should or should not do. The definition of values according to Dictionary.com is â€Å"the ideals, customs, institutions, etc., of a societyRead MoreCode of Ethics for Computer Professionals1134 Words   |  4 PagesMost professions have codes of ethics and for the same reasons computer professionals need a code of ethics. Professions that have been in existence for many more years than the information profession have had time to recognise their ethical responsibilities. In the information field it can be more difficult to immediately recognise who is affected by the actions of an individual or organisation. This does not mean that information professionals have no moral responsibilities. It is common across

Research on Synthesis

Questions: 1. A statement of common themes addressed in each of the three articles? 2. A statement of the conclusions that can be drawn when the articles are taken together as a single entity. What is the overall message of the group of articles? Answers: 1. A statement of common themes addressed in each of the three articles The main theme from the three articles is the importance of leadership role. All the three articles revolve around the leadership topic and task about the positive, negative, types and impact of leadership role among the students. From the given three articles, one can generalize that there are three building blocks of being a good leader one is the ability to create and assemble stakeholders around an imparted vision, secondly, the capacity to guarantee viable interpretation of that vision into cement results; and lastly a commitment to uprightness and morals and the act of responsibility. From the article of Lilienfeld et al., (2012), one thing is clear that being a leader doesnt mean that everything will always be right. There exist both the successful and unsuccessful factors that have to be always taken care of. Some of the positive aspects can be that leadership can be invaluable to organizations if leaders have the capacity to delegate errands proficiently and build laborer be nefit. Great leaders have the capacity to focus the qualities and shortcomings of diverse workers and representative work as needs be. Then again, insufficient leadership can lessen benefit. For instance, if a director chooses to remain quiet about simple errands and agents troublesome assignments to representatives, it could bring about problematic productivity. Sound leadership can enhance employees spirit and make laborers more faithful to the organization (Tourish, 2014). Loyal employees believe their leaders and may be ready to work harder and stay with the organization when challenges are out of hand. The negative aspects to describe can be leadership can be a drawback in business is that authority itself is not a gainful movement. While investing time driving and teaching employees is fundamental to verify that they perform their obligations well, directors don't really create products or administrations while going about as leaders (Franke and Felfe, 2011). Successful authority is vital to an association's prosperity. Leaders can make various moves to help keep ventures from failing. In request to run the associations smoothly, successfully and productively, the most critical and esteemed element associations need is Human assets. The accomplishment of an association relies on upon the tireless, faithful and concerned directors and representatives. Leaders must have energy for their work with the goal that it spreads to those whom they administer. That includes leaders having faith in the organization in which they work. Leaders must make clear and particular objectives and goals, have the capacity to impart those, and verify that the objectives are measurable (Maddock and Viton, 2008). A leaders needs to unmistakably impart what is required. If that the worker does not comprehend what to do, then the activity is situated up for failure. "Leaders need to be considered responsible to the association for results, arrangement must be respo nsible to the results, and the representatives must be responsible for their activities" (Newcomb, 2005). Leaders attempt to rouse their adherents through extraneous rewards. Leaders can likewise act by depending on dynamic administration by exemption which happens when the leaders screens adherents to guarantee missteps are not made. These types of leaders are generally termed transactional leaders. Leaders who have a strong impact on his or her followers in looking at their eagerness toward oneself for the benefit of the group and serves to create followers initiative capacities through guiding, tutoring, and by giving support to the followers are characterized as transformational leaders (van Eeden, Cilliers and van Deventer, 2008). These kinds of leadership traits and qualities should be taught to the students of management and school students who are the future business man and woman. Educational leadership has a basic part in the change of society, and for change to happen, powerful leaders are key (Bisschoff, 2005). Alongside the boundless conviction that the nature of initiative has a huge effect to class and understudy results, there is additionally expanding recognition that compelling school leaders and directors must be created in the event that they are to give the best conceivable training to their learners (Odom, Boyd and Williams, 2012). In this manner, the teachers ought to attempt to fuse real life cases which students can create qualities of leadership from their childhood itself. 2. A statement of the conclusions In conclusion, it can be stated that from the three articles it is quite clear that leaders has a strong role to play. The leadership qualities have to build in a person right from his/her education days. Thus, the teachers or the educators need to create link between their teaching, students a leadership that helps the students to develop interest and skills about leadership. Leader is needed in every association at each level, the achievement then again disappointment of an association relies on upon the nature of initiative especially from top administration. They have different characteristics either they have be transactional in nature or transformational in nature References Bisschoff, T. (2005). Book Review: Developing Educational Leadership. Educational Management Administration Leadership, 33(4), pp.487-488. Franke, F. and Felfe, J. (2011). How does transformational leadership impact employees' psychological strain?: Examining differentiated effects and the moderating role of affective organizational commitment. Leadership, 7(3), pp.295-316. Lilienfeld, S., Waldman, I., Landfield, K., Watts, A., Rubenzer, S. and Faschingbauer, T. (2012). Fearless dominance and the U.S. presidency: Implications of psychopathic personality traits for successful and unsuccessful political leadership. Journal of Personality and Social Psychology, 103(3), pp.489-505. Maddock, G. and Vit, R. (2008). Why Companies Lack Successful Innovation. [online] Businessweek.com. Available at: https://www.bloomberg.com/bw/stories/2008-12-02/why-companies-lack-successful-innovationbusinessweek-business-news-stock-market-and-financial-advice [Accessed 20 Mar. 2015]. Newcomb, K. (2005). Transformational Leadership: Four Keys to Help You and Your Organization. Debt 3, 20(6), p.34. Odom, S., Boyd, B. and Williams, J. (2012). Impact of Personal Growth Projects on Leadership Identity Development. Journal of Leadership Education, 11(1), pp.49-63. Tourish, D. (2014). Leadership, more or less? A processual, communication perspective on the role of agency in leadership theory. Leadership, 10(1), pp.79-98. van Eeden, R., Cilliers, F. and van Deventer, V. (2008). Leadership Styles and Associated Personality Traits: Support for the Conceptualisation of Transactional and Transformational Leadership. South African Journal of Psychology, 38(2), pp.253-267.

Small and Medium Enterprises free essay sample

Granularity: This refers to a situation where the risk grading system at banks does not have the requisite capability to discriminate between good and bad risks. The consequence is tightening of Y. Srinivas (The author is Manager, Compliance Group at ICICI Bank. He can be reached at srinivas. [emailprotected] com) Small and Medium Enterprises (SMEs) play a very significant role in the economy in terms of balanced and sustainable growth, employment generation, development of entrepreneurial skills and contribution to export earnings.However, despite their importance to the economy, most SMEs are not able to stand up to the challenges of globalisation, mainly because of difficulties in the area of financing. With the opening up of the Indian economy, it has become necessary to consider measures for smoothening the flow of credit to this sector. The article provides a crosscountry perspective in this regard and highlights the Indian scenario with reference to SME lending. We will write a custom essay sample on Small and Medium Enterprises or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page rs or managers know more about the prospects for, and risks facing their business than their lenders) exists, lenders may respond by increasing lending margins to levels in excess of that which the inherent risks would require. However, the sheer ticket size of SME lending makes it inviable for banks to invest in development of information systems about SME borrowers. In such situations, banks may also curtail the extent of lending even when SMEs are willing to pay a fair riskadjusted cost of capital. The credit terms, or an increase in prices, or both.From the borrower’s perspective, this leads to an outcome where the bank is over-pricing good risks and under-pricing bad risks. The fact that most banks in India have not developed adequate expertise in SME lending risk assessment exercises leads to the problem of granularity when it comes to SME lending. (c) Pecking Order Theory: Pecking order theory ? ows from the above two issues, which makes SME lending highly dif? cult fo r banks. Un- der this hypothesis, SMEs, which face a cost of lending that is above the true risk-adjusted cost, will have incentives to seek out alternative sources of funding.Evidence suggests that in such situations SMEs prefer to utilise retained earnings instead of raising loans from banks. (d) Moral Hazard: Even when loans are made to SMEs, it may so happen that the owners of these SMEs take higher risks than they otherwise would without lending support from the banks. One reason for this situation is that the owner of the ? rm bene? ts fully from any additional returns but does not suffer disproportionately if the ? rm is liquidated. This is referred to as the moral hazard problem, which can be viewed as creating a situation of over-investment.The moral hazard problem may, thus, result in SME lending turning bad in a short period of time, a situation that all banks would like to avoid. (e) Switching Costs: SMEs may ? nd it harder to switch banks, when countered with any issue. It is a known fact that the smaller the business, the more signi? cant the switching costs are likely to be and, therefore, it is less likely that the bene? ts of switching outweigh the costs involved. This situation results in SME lending becoming a sellers market, which may not be attractive to SME borrowers. Steps for Smooth SME Lending In order to ensure that the 36 The Chartered Accountant September 2005 above issues do not stand between SMEs and Bank Finance, the following steps could be taken as remedial measures: Collateral: Existence of collateral that can be offered to banks by SMEs could be one effective way of mitigating risk. Banks could, therefore, look at collateral when pursuing the question of SME lending. It can also be stated that a borrower’s willingness to accept a collateralised loan contract offering lower interest (relative to unsecured loans) will be inversely related to its default risk. However, not all SMEs would be able to offer collateral to bank s.Hence, Reserve Bank of India (RBI) allows banks, with a good track record and ? nancial position on SSI units, to dispense with collateral requirements for loans up to Rs. 25 lakhs. (a) Relationships: The length of the relationship between a bank and its SME customers is also an important factor in reducing information asymmetry, as an established relationship helps to create economies of scale in information production. A relationship between a SME and a bank of considerable duration allows the bank to build up a good picture of the SME, the industry within which it operates and the calibre of the people running the business.