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This paper aims to explore Istisna’a as a tool of monetary policy (MP) and examines its effectiveness in achieving full employment income and price stability.

This paper uses Istisna’a as a tool of MP and examines its effects on key macroeconomic variables on purely theoretical ground. The effectiveness and the impact of Istisna’a-based MP is examined by using aggregate output and aggregate expenditure model, embedded with Islamic economic principles, including zakat function.

Istisna’a-based MP immediately creates well paid jobs, positively contributes and expands the size of the manufacturing sector, increases capital per person employed, labor productivity and thus increases output, employment and promotes industrialization. Increase in the size of manufacturing sector will not only increase manufactured value-added exports but also cut high valued manufactured imports and thus increases positive trade balance and eventually reduces trade deficits. Increase in labor productivity will improve the standard of living, and eventually the economy will yield sustainable high growth rates, full employment and prosperity.

This is probably one of the first attempt to systematically develop the Istisna’a-based MP with detailed MP transmission mechanism. This new contribution in the field of Islamic MP will unveil the horizon of sustainable economic growth, creation of well paid jobs, expansion of manufacturing sector, rapid industrialization and the increase in capital per person employed across the economy, and eventually Istisna’a-based MP will be one of the most effective tool of MP for transforming an economy into a relatively higher and sophisticated stages which will eventually promote sustainable development.

The purpose of this paper is to develop a systematic approach for business customer segmentation.

This study proposes an approach for business customer segmentation that integrates clustering and multi-criteria decision making (MCDM). First, proper segmentation variables are identified and then customers are grouped by using hierarchical and partitional clustering algorithms. The approach extended the recency-frequency-monetary (RFM) model by proposing five novel segmentation variables for business markets. To confirm the viability of the proposed approach, a real-world application is presented. Three agglomerative hierarchical clustering algorithms namely “Ward’s method,” “single linkage” and “complete linkage,” and a partitional clustering algorithm, “k-means,” are used in segmentation. In the implementation, fuzzy analytic hierarchy process is employed to determine the importance of the segments.

Business customers of an international original equipment manufacturer (OEM) are segmented in the application. In this regard, 317 business customers of the OEM are segmented as “best,” “valuable,” “average,” “potential valuable” and “potential invaluable” according to the cluster ranks obtained in this study. The results of the application reveal that the proposed approach can effectively be used in practice for business customer segmentation.

The success of the proposed approach relies on the availability and quality of customers’ data. Therefore, design of an extensive customer database management system is the foundation for any successful customer relationship management (CRM) solution offered by the proposed approach. Such a database management system may entail a noteworthy level of investment.

The results of the application reveal that the proposed approach can effectively be used in practice for business customer segmentation. By making customer segmentation decisions, the proposed approach can provides firms a basis for the development of effective loyalty programs and design of customized strategies for their customers.

The proposed segmentation approach may contribute firms to gaining sustainable competitive advantage in the market by increasing the effectiveness of CRM strategies.

This study proposes an integrated approach for business customer segmentation. The proposed approach differentiates itself from its counterparts by combining MCDM and clustering in business customer segmentation. In addition, it extends the traditional RFM model by including five novel segmentation variables for business markets.

The purpose of this paper is to propose a financial instrument by combining two main contracts in Islamic finance with the aim to minimize risks involved in Islamic venture capital (IVC) activities.

A mathematical model and explanatory figures are provided to see how IVC firms can benefit from the combination of “Ijara” contract and “Diminishing Musharaka” contract to provide financing for start-up and high-tech companies.

The proposed instrument could be considered as an alternative solution for IVC firms. It represents a low level of risk with a stable income in the beginning of the project. In addition, it allows benefiting from the possible development of start-up and high-tech companies with a smooth exit from the capital of the financed company without the intervention of another investor. It is also considered as a motivational instrument for the entrepreneurs, because it allows benefiting from a grace period on the one hand and from a lower cost of financing compared to other type of funding on the other hand.

Some studies have concentrated on identifying and understanding the concept, the operation and the challenges of IVC industry. The study is considered among few studies that provide a practical model for IVC firms, which takes account of the different stages of venture capital process. The instrument can promote the development of IVC firms and give alternative financing opportunities to Muslim entrepreneurs.

The current model provides a truly revolutionary solution for young Muslim entrepreneurs who do not accept to be financed by the proposed instruments of venture capital (VC) firms such as convertible bonds and warrants. On the other side, it provides an alternative solution for IVC firms to the already offered products such as “Musharaka”, “Mudharaba” and “Wakalah” contracts. An expert in “Fiqh Al-Muamalat” (Islamic law of transaction) assessed the Sharia compliance of the model.

This paper aims to investigate the macroeconomic effects of Qard-al-Hasan (QH) as a tool of monetary policy (MP) and its effectiveness in achieving full employment and price stability in the economy.

QH-based MP and its effects on major macroeconomic variables are examined on theoretical ground by using the standard aggregate output and aggregate expenditure model within the framework of Islamic economic principles.

QH-based MP positively influences real sectors of the economy and increases output, and the economy returns to full employment. QH provides the lowest possible borrowing costs across the economy and thus triggers rightward shift in aggregate supply curve and thus increases output and lowers price level. In addition, increase in output eliminates excess demand or shortages and thus maintains price stability. Furthermore, QH-based MP also increases exportable surplus and exports, decreases imports as well as increases inflow of funds and foreign currency reserves with the Central Bank and thus makes MP more effective.

QH-based MP is usually expansionary MP, and as such, it can be argued that there is a probability that QH-based MP may lead to higher inflation rate. However, in this study, it has been shown with real world data in Table II, that 23 countries in Group 1 have pursued zero or negative interest rate policy and their experiences mitigate such probability.

This is, perhaps, the first paper that presents a complete model of QH as a tool of MP with fully explained transmission mechanism. This is new contribution in the literature of Islamic finance where theoretical model on QH is systematically developed and applied as an effective tool of MP in attaining full employment and price stability. This model of QH-based MP can unfold a new horizon of uninterrupted economic growth, full employment and price stability by increasing output and employment, as well as by eliminating excess demand or shortages.

The purpose of this paper is to look into millennials’ acceptance of Qard al-hasan using the Islamic theory of consumer behaviour (iTCB) in Malaysia.

For this study, convenience sampling was used and 203 usable questionnaires were received from the respondents who are millennials and university students. The questionnaire link was distributed via social media platforms to the millennials.

The findings of this study reveal that there exists a strong and positive relationship between the role of iman and Maqasid consumer index in determining the millennial acceptance of Qard al-hasan. On the contrary, Islamic altruism does not turn out to be the factor of Qard al-hasan acceptance. Resultantly, these results suggest that millennials in Malaysia accept Qard al-hasan and based on those educational institutions may consider offering zero-interest benevolent loans to alleviate the financial burden of unprivileged students.

Although this study provides positive results, a minimum of two research constraints may direct future efforts in this area. This study initially focuses on a specific ecosystem of Islamic financial products in Malaysia, with a particular emphasis on Qard al-hasan. As a result, subsequent research ought to strive to encompass a larger perspective on Qard al-hasan. Secondly, this research uses a theory that is still in the applicability phase, which has led to some productive discussions for further improvements.

To the best of the authors’ knowledge, this work is one of the few studies conducted on an empirical basis using the iTCB in the milieu of Qard al-hasan in Malaysia.

This paper aims to explore the viability of applying Qard Hasan as an Islamic crowdfunding financial instrument to finance micro-enterprises in Malaysia.

This is a qualitative study in which semi-structured interviews were conducted with several crowdfunding professionals concerning the application of Qard Hasan in Islamic crowdfunding. To realise the purpose of this study, the data is subjected to thematic analysis.

The finding reveals that though it is often argued that Qard Hasan is basically not a business-oriented instrument, a closer look at the framework reveals the uniqueness and flexibility of this instrument to be adopted as a viable financial instrument for crowdfunding in financing micro-enterprises in Malaysia. Although it is associated with various risks including default risk and the risk of attracting big funds. However, these risks can be managed and overcome by using FinTech mechanisms such as blockchain to carry out due diligence, monitor the project and ensure the repayment in installment.

The findings of this study may not be suitable for generalisation to all crowdfunding practices as the semi-structured interview is concentrated predominantly in Malaysia. However, it still provides valuable contributions to the Islamic crowdfunding sector in Malaysia between theory and practice.

The Qard Hasan crowdfunding framework in this study can potentially be applied to help micro-entrepreneurs reach out to financial services within their means. This framework provides means to grow the micro-enterprise sector.

Qard Hasan crowdfunding will effectively alleviate poverty by creating an avenue of opportunities for business enterprises and close the gap between the wealthy and the poor classes in society, which will eventually bring about more cooperation, more collaboration and cultivate a generous society.

In spite of the fact that Islamic crowdfunding is not a new topic in research, it lacks empirical studies, particularly qualitative analysis. As this study engages with experts in Shari’ah and crowdfunding regarding the potential application of Qard Hasan, it highlights a fresh discussion both in theory and practice.

This paper aims to investigate the effects of eliminating Riba in foreign currency transactions. Riba or interest arises when foreign currencies are bought and sold at different rates. From the Islamic perspective, the difference between the buying and selling rates of foreign exchange will constitute Riba. Also, this paper examines the effects of eliminating such Riba on major macroeconomic variables.

This study is based on the hadith which imply that if buying and selling rates of currencies or foreign exchanges are same, i.e. if one sells BD1 = Dh10 and Dh10 = BD1 on spot, there will be no Riba. This can be guaranteed if the Islamic banking system introduces the technology, often known as FinTech interest-free foreign exchange bank machines (IFfexBM), which will automatically dispense BD10 for Dh100 and vice-versa, both locally and globally, and it will have tremendous positive effects in the economy. Furthermore, the effects of introducing FinTech for eliminating Riba will be analyzed on economic and international trade activities by using aggregate expenditure (AE) and aggregate output model within the tenets of Islamic principles.

If Islamic banks (IBs) can introduce FinTech global network system where any client can buy or sell foreign currency at the same rate without any markup, it will increase the market share for IBs by increasing the number of customers and number of branches, and it will increase the inflow of funds and volumes of transactions, especially in international trade, global financial transactions and cross-border shopping. Such an increase in transactions will increase AE and AE will continuously shift up. Such an upward shift will have positive effects on equilibrium output, employment and prosperity.

This is, perhaps, one of the latest attempts to eliminate Riba from foreign exchange transactions by introducing FinTech IFfexBM in each and every locality. Such elimination of Riba will not only reduce the cost of cross-border transactions but it will also reduce cost in international trade and financial transactions among nations, and therefore, it will have expansionary effects on equilibrium output, employment and global prosperity.

Qardhul Hasan (QH) is a type of Islamic contract that prioritises benevolent aspects between beneficiaries and the fund provider. The effective management and distribution of QH can contribute to overcoming economic problems in society. This study aims to explore the potential to enlarge the sources of QH funding and QH financing in Indonesian Islamic banks. The paper proposes a framework for QH management in Islamic banks by identifying the sources of QH funds as well as the management and potential allocations of QH funds.

This study uses a descriptive analysis method with a framework-based review to discuss the strategy of optimising the sources, financing and management of QH in Islamic banks. The implementation of QH in the Islamic banking industry is described based on the previous literature and current phenomena.

To positively impact economic development, Islamic banks can collaborate with parties that are more focused on charitable activities and have greater resources to channel and use QH funds. This study also formulates a framework of QH funds management that prioritises efforts to multiply benefits for both the fund provider and the beneficiaries.

The descriptive method used in this paper comprises preliminary research to analyse the current phenomena and potential strategies that can be implemented. Future studies may use empirical data to strengthen the analysis.

The recommendations of this paper can be used by relevant social fund management institutions in collaboration with Islamic banking.

QH reflects not only the social aspects of Islamic banks and extends beyond their corporate social responsibility activities, its effective management will make a greater contribution to reducing the level of unemployment, poverty alleviation and supporting the country’s economic development.

This paper provides a framework that integrates financial institutions in maximising QH fund management to encourage greater benefits for the community. Although previous studies have mentioned the important role of QH, relatively few have considered how Islamic banks maximise its management.