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Open Access
Article
Publication date: 29 September 2022

Sumaira Siddiky, Randi Swandaru and Aishath Muneeza

Micro-enterprises, like any other business entity, face financing challenges. However, micro-enterprises often cannot access financial institutions as they cannot fulfill the…

1383

Abstract

Purpose

Micro-enterprises, like any other business entity, face financing challenges. However, micro-enterprises often cannot access financial institutions as they cannot fulfill the conditions to obtain financing facilities from a formal financial institution. As such, they have to rely on family or friends for financing needs. The most critical challenge faced in this regard to Muslim micro-enterprises is finding out a way in which family and friends could give a financial helping hand without the involvement of riba (interest). At the same time, the person giving the financing can enjoy a profit. This paper aims to propose the Tawarruq Fardi Financing (TFF) model that Islamic micro-enterprises could use to fulfill their financial needs. It becomes a solution when obtaining financing from friends and family or any other third party who could be a private investor who does not want to engage in an equity relationship.

Design/methodology/approach

This study adopts a qualitative research methodology, combining descriptive and content analysis using the inductive reasoning approach.

Findings

The paper's outcome shows that the proposed TFF could assist Islamic micro-enterprises in obtaining Shariah-compliant financing without engaging in an equity partnership. It allows them to fulfill their financing needs bearing in mind the interest of both parties involved in the transaction.

Originality/value

This research will assist Islamic micro-enterprises to find out a Shariah-compliant financing facility from family, friends and any other private investors without entering into an equity relationship. The proposed model would be a Shariah-compliant alternative to interest-free loans and engaging in an equity relationship for the sake of getting benefits for both parties involved in the transaction.

Details

PSU Research Review, vol. 8 no. 2
Type: Research Article
ISSN: 2399-1747

Keywords

Article
Publication date: 28 November 2022

Randi Swandaru and Aishath Muneeza

This study aims to scrutinize the modus operandi of global financial frauds in Islamic financial institutions and assesses whether those frauds can be prevented using High…

Abstract

Purpose

This study aims to scrutinize the modus operandi of global financial frauds in Islamic financial institutions and assesses whether those frauds can be prevented using High Standards of Shariah Governance.

Design/methodology/approach

A qualitative research methodology is deployed to conduct this study by analyzing and scrutinizing academic journals, reports, regulatory guidelines and articles.

Findings

The findings in this study show that the modus operandi ranges from bribery, forged documents, unlawful profiteering, credit limit allowance ignorance, Ponzi scheme, culprit collaboration from inside and outside the banks. This paper also argues that the centralized and high-standard Shariah governance framework better prevents fraud by providing better Shariah supervision and risk management measures.

Research limitations/implications

The observations in this study are limited to financial fraud at Islamic financial institutions that happened in the 21st century with more than $100m in financial loss or penalty.

Originality/value

This study may contribute significantly by providing insight for regulators to strengthen the Shariah governance framework in their respective countries. It also benefits Islamic financial institutions by enhancing their capacity to anticipate future financial fraud.

Details

International Journal of Law and Management, vol. 64 no. 6
Type: Research Article
ISSN: 1754-243X

Keywords

Book part
Publication date: 20 January 2022

Randi Swandaru and Magda Ismail Abdel Mohsin

COVID-19 pandemic has impacted global human lives, killing millions and attacking the real economy to its core. United Nations has called for global solidarity to overcome this…

Abstract

COVID-19 pandemic has impacted global human lives, killing millions and attacking the real economy to its core. United Nations has called for global solidarity to overcome this unprecedented disaster. Having said that, zakat has been utilized to respond to this ongoing suffering in Muslim countries. This chapter explore zakat utilization for COVID-19 under the shariah perspective and discuss the role of zakat to respond to the pandemic in Muslim countries. A qualitative methodology including conceptual and content analysis is applied to conduct this study. The findings show that most sharia scholars agreed to utilize zakat for the COVID-19 pandemic and endorse advance zakat payment. Moreover, zakat has been disbursed mainly to fulfil basic needs, support emergency health services, sustain education activities, recover economic impact and maintain dakwah programme. The global zakat institutions have also started up the international initiative to respond to this pandemic. This study contributes to the academia on showing how zakat is a conceivable and reliable instrument to give immediate response to this pandemic in Muslim countries. The best practices found in this study are worthy for zakat institutions to continue their programme under this pandemic and be resilient for the next global scale of disasters.

Details

Towards a Post-Covid Global Financial System
Type: Book
ISBN: 978-1-80071-625-4

Keywords

Abstract

Details

Towards a Post-Covid Global Financial System
Type: Book
ISBN: 978-1-80071-625-4

Content available
Book part
Publication date: 20 January 2022

Abstract

Details

Towards a Post-Covid Global Financial System
Type: Book
ISBN: 978-1-80071-625-4

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