Dr. Neimat Abdalla Ibrahim from the Department of Accounting & Finance, College of Commerce & Business Administration presented a paper at the first National Conference on Islamic Finance 2007, on the 27th and 28th of November, 2007. The conference was organized by the faculty of Business Management and Accountancy in the University of Darul Iman, Malaysia, and provided a forum for sharing goals, ideas and information on the current issues pertaining to Islamic finance. Islamic finance worldwide has gained significant attention due to its size, fast growth, and the potential impact on the international financial markets. Islamic banks are considered as the most important source of external funds for financing small and medium sized firms. However, their ability to channel long-term credit to small firms is still a debatable issue. Dr. Neimat’s paper examined the behavior of Islamic banks within the context of profound regulatory changes in the banking system and the extent to which this behavior affects small firms financing. Using aggregate data from all banks in the Sudanese banking sector, the results indicate that banking behavior is determined by the structure of financial resources, as well as the Central Bank’s monetary and credit policies. Dr. Neimat said in her presentation, “We find evidence that inadequate capital base and the dominance of sensitive financial resources provide justification for the conventional banking behavior that is allocation of sensitive resources to short term financing. The empirical finding indicates that Murabaha financing dominates over profit and loss sharing instruments. This evidence challenges the objective of Islamic banks which is supposed to provide long term financing, and facilitate availability of financing to small firms.”