Search results

This study aims to validate a potential synergistic venture between cash waqf (Islamic endowment) institutions (CWIs) and financial cooperatives (FCs) in the provision of affordable Islamic home financing (IHF) in Malaysia.

The study adopted semi-structured interviews with ten experts to validate the cash waqf-financial-cooperative-mushārakah mutanāqiṣah (CWFCMM) model. Thematic analysis technique was used to analyse the verbatim texts.

The findings show that the majority of the informants have positive perceptions of the potential of the CWFCMM model to provide financially affordable IHF products in Malaysia. Nevertheless, this study sheds light on the varying degrees of latent issues and challenges that might arise in the implementation of this model. For example, FCs need to practice the correct business model, implement good governance structures and employ the right people. Meanwhile, CWIs need to work on their accountability issues by publishing their audited accounts in mainstream newspapers, much like what is being done by non-governmental organisations such as the widely recognised Malaysian Medical Relief Society (MERCY Malaysia).

This study interviewed a small, industry-specific number of informants in generating its findings. Time and budget constraints are some of the limiting factors in carrying out the study. Because of these factors, the generalisation of the study’s findings will be limited.

First, the CWFCMM model offers an alternative, financially affordable IHF instrument to low- and middle-income households in Malaysia. Second, the involvement of third-sector institutions such as FCs and CWIs in the provision of IHF will reduce the burden of the government in its spending on home financing solutions for civil servants. Third, this model will harness the potential of waqf-based financing beyond the contemporary limited applications to mosques, graveyards and taḥfīẓ (Qurʾan memorization) schools.

This study presents an alternative IHF model that transcends the current institutional framework that is heavily dominated by Islamic commercial banks and government-owned home financing institutions. The study does not focus on a single third-sector institution but on an integration of at least two of them, CWIs and FCs, in implementing the IHF model.

Malaysia is one of the fastest-growing Asian economies with a properly designed and developed Islamic financial system. This unique feature of the Malaysian economy made it an important case study, and the purpose of this study is to assess for the dynamic contribution of Islamic finance to the growth of the real economy.

The study uses a quarterly data set of 20 years analysed via the autoregressive distributive lag bounds test approach to cointegration.

The results in the short-run show a non-significant relationship between Islamic banking indices and the real economy. However, in the long-run, financing and deposits of Islamic banks are favourable and contribute significantly to the growth of the Malaysian economy. There was an accumulation of meaningful and wide-ranging investment over the period of the study and productivity of capital was also extra-efficient. The direction of causality is found to be bidirectional between Islamic banking deposits and Malaysian gross domestic product (GDP), but there is a weak causal effect from Islamic banking financing to GDP.

Malaysia has a dual financial system (conventional and Islamic) and both can affect its real economy. This research is limited to Islamic banking’s effects on Malaysian economic growth. The research also limits the scope and coverage for 20 years, from 1998 to 2017 to cover the years for which data is available for all the variables used in the study.

The results confirm that the Islamic banking sector in Malaysia is performing well in carrying out its major function of financial intermediation, which is the pooling and channelling of funds to productive investment activities. Consequently, the fact that Malaysia excels in Islamic finance is not a fluke. It is because of the effective performance of Islamic financial institutions in the country. Furthermore, Malaysian authorities are doing their level best in promoting Islamic financial activities.

The study fulfills the need to uncover the relationship between the Islamic financial system and the real economy in Malaysia. It differs from other studies as it uses the most recent available data, introduces new variables and identifies the channel by which Islamic banking development transmits growth.

This paper aims to understand the issue of interest rate benchmarking in Islamic financial institutions (IFIs) from a macro-economic perspective and assessing the relevance of creating a Sharīʿah-compliant profit rate benchmark to solve this issue. This paper also aims at suggesting an Islamic alternative that will handle both the negative economic impact on IFIs as well as on their financial performance.

The paper is based on literature review of conventional finance and Islamic finance theories to construct a theoretical model to assess the impact of interest rate benchmarking on the ability of IFIs to achieve the objectives of the Islamic economy.

The macro-economic perspective concludes that conceiving a profit rate benchmark for the Islamic finance industry is not relevant to raising the Sharīʿah credibility of the industry. Indeed, several adjustments need to be introduced in terms of the business model.

The recommendations of this paper require the involvement of financial authorities and governments for their implementation. Indeed, the adjustments require a macro-economic review.

The paper considers a profit rate benchmark irrelevant and inefficient. Instead, it suggests the necessary adjustments in terms of business model and economic approach for IFIs to achieve their objectives.

The paper considers zakat implementation and the adjustment of IFIs as the real path to implement a fair wealth distribution in the society.

The creation of a profit rate benchmark has always been the only solution for the pricing issue in IFIs. This paper challenges this idea and tries to give a deeper understanding of the situation.

This paper aims to define a methodology to assess the impact of introducing Islamic finance on financial inclusion.

The paper is based on a literature review to understand the link between Islamic finance and financial inclusion. The second part of the paper presents a conceptual framework to assess the impact of introducing Islamic finance on financial inclusion in a defined context based on the profiling of people interested in Islamic finance.

The paper brings an insight on the impact of introducing Islamic finance. Indeed, it could cause a financial migration to Islamic banks that can take many forms and depends on many factors that call for deep analysis.

The paper would help financial authorities and financial institutions to measure the impact of introducing Islamic finance on their businesses and the stability of the whole system.

Islamic finance can not only enhance financial inclusion but also create financial migration. The two implications can vary from one context to another.

Islamic finance can contribute in the effort of including “self-excluded” people with religious concerns as well as people without access to financial services.

This paper promotes the idea that Islamic finance is not exclusively a way to enhance financial inclusion.

The purpose of this paper is to examine bank performance using the different performance measures, namely, return on assets, return on equity and bank margins (MAR).

Unbalanced panel data were constructed to test the related hypotheses and provide evidence on the relationship between ownership types, banking models and performance indicators adopting the random effects techniques.

The findings of the paper substantiate that the banking models are significant performance indicators. However, the results are contingent on the GDP growth of the country. Moreover, the evidence indicates that the impact of ownership types is inconclusive in all measures of performance. However, the GDP is significant when it interacts with the types of ownership, particularly for foreign and government banks, although the evidence is mixed and unfavourable for government banks.

The results of the study provide insights for bankers and policymakers to enhancement Yemen’s banking sector.

This study is considered as the first attempt in examining the role of banking model and ownership type and their link to banking model.

This paper aims to propose a liquidity management solution for Islamic financial institutions (IFIs) that concurs with sustainable development and financial stability.

The study is a qualitative research. It uses the exploratory research methodology, specifically the content analysis approach, to gather primary data and identify and interpret relevant secondary data and Sharīʿah concepts. The purpose is to develop a liquidity management solution for IFIs. The proposal is based on the Unleveraged Green Investment Trust (UGIT) model, which is consistent with Basel III regulatory requirements. In developing the UGIT model, the exploratory research was complemented by a case study to examine the UGIT solution for the particular case of renewable energy.

The model demonstrates how financial innovation can meet both financial stability and sustainable development objectives, thereby achieving the spirit of Islamic finance. The structure further highlights the importance of regulatory and fiscal frameworks to enhance liquidity management and investor appeal for green financial instruments.

This study suggests a structure of UGIT to enable IFIs to meet their liquidity management needs while promoting sustainable development.

This paper aims to explore the opinions and recommendations of various experts on the integrated cash waqf micro enterprise investment (ICWME-I) model, particularly in terms of its suitability, applicability and prospects in the market.

The research involves primary data which are collected from semi-structured interviews conducted with experts from various backgrounds. Thematic analysis was used to examine the data.

The experts support the suitability of the ICWME-I model in providing financial services to micro enterprises. They highlight the importance of establishing, managing and operating ICWME-I model under the aegis of the State Islamic Religious Council in Malaysia or the corporate sector. They further emphasize that the characteristics of micro enterprises, the element of sustainable funding, the importance of proper management and administration, legal matters and public awareness are key factors that influence the sustainability of the ICWME-I model.

This paper adds to the literature on waqf and micro enterprises especially from the Malaysian context. The paper validates the ICWME-I model in terms of its suitability, applicability and prospects in the market by interviewing experts from various backgrounds.

Small and medium enterprises’ (SMEs) capital structure and financial policies are important areas of policy concern. Only a limited number of studies on capital structure have, however, been conducted on SMEs, and this deficiency is particularly evident when investigating what influences funding decisions around Islamic finance. This paper accordingly aims to investigate whether Omani SME owner-managers’ intention to adopt Islamic finance is influenced by their knowledge of Islamic finance, their own characteristics and/or their firms’ characteristics.

The authors administered a questionnaire survey via face-to-face interviews to 385 SME owner-managers operating in Muscat, Oman’s capital city. The Kruskal–Wallis one-way analysis of variance (ANOVA) non-parametric test was used to analyse the questionnaire survey data.

The findings indicate that while SME owner-managers’ Islamic financial knowledge and personal characteristics do influence their intention to adopt Islamic finance, their firms’ characteristics have no significant influence on SME owner-managers’ decisions to accede to Islamic financing.

The research’s first limitation is that it gathered data from SME owner-managers in Muscat only. Future studies could survey a wider sample of Omani SME owner-managers. Second, the study’s findings cannot be generalised to large and public firms, as the sample includes owner-managers of SMEs only. Finally, there is a need to investigate other factors such as nonfinancial and behavioural factors, which were not explored in the present study, but which may influence SME owner-managers’ Islamic financial decisions.

Theoretical and empirical studies on capital structure have focused primarily on large listed firms. Only a few studies have paid attention to the capital structure of SMEs, particularly in the context of an emerging market such as Oman. This gap in the literature is mostly evident when investigating the factors that influence the funding decision towards Islamic financing in a country, such as Oman, where Islamic finance represents a new banking sector offering.

This paper aims to investigate sale with the temporary exclusion of usufruct, a format debated in classical Islamic jurisprudence. More specifically, it examines the application of this sale format in the diminishing partnership arrangement used by American Finance House LARIBA to finance house purchases. It analyzes the Sharīʿah issues and assesses the risks involved.

The research is qualitative, surveying and critically analyzing classical fiqh literature and contemporary juristic resolutions, as well as LARIBA’s financing documents. Finally, it systematically surveys the associated risk factors, first qualitatively, and then by quantifying them.

The research concludes that sale with the temporary exclusion of usufruct is a valid contract in Islamic law. When the usufruct is priced at market rate, the financing arrangement is genuinely Islamic and brings added value. Moreover, it is very effective in addressing risks for Islamic banks, particularly in countries with legal systems not designed to accommodate Islamic finance.

This study systematically examines all aspects of a contract that has not received sufficient academic attention, that has been underutilized by the Islamic finance industry and that is more fitting for implementation than many of the contracts currently being used.

Enrolling in an academic discipline or selecting the college major choice is a dynamic process. Very few studies examine this aspect in India. This paper makes a humble attempt to fill this gap using NSSO 71st round data on social consumption on education. The purpose of this paper is to use multinomial regression model to study the different factors that influence course choice in higher education. The different factors (given the availability of information) considered relate to ability, gender, cost of higher education, socio-economic and geographical location. The results indicate that gender polarization is apparent between humanities and engineering. The predicated probabilities bring out the dichotomy between the choice of courses and levels of living expressed through consumption expenditures in terms of professional and non-professional courses. Predicted probabilities of course choices bring in a clear distinction between south and west regions preferring engineering and other professional courses, whereas north, east and NES prefer humanities.

The present paper follows the same approach as that of Turner and Bowen (1999). The Multinomial regression is specified as P ( M i = j ) = ( exp ( β j × X i ) / ∑ j − 1 5 exp ( β j × X i ) ) , where P (M_i=j) denotes the probability of choosing outcome j, the particular course/major choice that categorizes different disciplines. This response variable is specified with five categories: such as medicine, engineering, other professional courses, science and humanities. The authors’ primary interest is to determine the factors governing an individual’s decision to choose a particular subject field as compared to humanities. In other words, to make the system identifiable in the MLR, humanities is treated as a reference category. The vector X_i includes the set of explanatory variables and β_j refers to the corresponding coefficients for each of the outcome j. From an aggregate perspective, the distribution of course choices is an important input to the skill (technical skills) composition of future workforce. In that sense, except humanities, the rest of the courses are technical-intensive courses; hence, humanities is treated as a reference category.

The results indicate that gender polarization is apparent between humanities and engineering. The predicated probabilities bring out the dichotomy between the choice of courses and levels of living expressed through consumption expenditures in terms of professional and non-professional courses. Predicted probabilities of course choices bring in a clear distinction between south and west regions preferring engineering and other professional courses, whereas north, east and NES prefer humanities.

Predicted probabilities of course choices bring in a clear distinction between south and west regions preferring engineering and other professional courses, whereas north, east and NES prefer humanities. This course and regional imbalance need to be worked with multi-pronged strategies of providing both access to education and employment opportunities in other states. But the predicted probabilities of medicine and science remain similar across the board. Very few research studies on the determinants of field choice in higher education prevail in India. Research studies on returns to education by field or course choices hardly exist in India. These evidences are particularly important to know which course choices can support student loans, which can be the future area of work.

The research evidence is particularly important to know which course choices can support student loans, which can be the future area of work, as well as how to address the gender bias in the course choices.

The paper has social implications in terms of giving insights into the course choices of students. These findings bring in implications for practice in their ability to predict the demand for course choices and their share of demand, not only in the labor market but also across regions. India has 36 states/UTs and each state/UT has a huge population size and large geographical areas. The choice of course has state-specific influence because of nature of state economy, society, culture and inherent education systems. Further, within the states, rural and urban variation has also a serious influence on the choice of courses.

The present study is a value addition on three counts. First, the choice of courses includes the recent trends in the preference over market-oriented/technical courses such as medicine, engineering and other professional courses (chartered accountancy and similar courses, courses from Industrial Training Institute, recognized vocational training institute, etc.). The choice of market-oriented courses has been examined in relation to the choice of conventional subjects. Second, the socio-economic background of students plays a significant role in the choice of courses. Third, the present paper uses the latest data on Social Consumption on Education.