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1 – 3 of 3Saeed Al-Muharrami and Daniel C. Hardy
Islamic and cooperative banks – including credit unions – are broadly similar in that they both share risk with savers. However, risk sharing goes along with ownership control in…
Abstract
Islamic and cooperative banks – including credit unions – are broadly similar in that they both share risk with savers. However, risk sharing goes along with ownership control in cooperatives, whilst Islamic banks share risk with borrowers also, and full downside risk with depositors. Islamic banking is consistent with mutual ownership, which may ease some of the governance and efficiency concerns implied by Shari’ah constraints. Greater risk sharing among cooperative bank stakeholders, along the lines of products offered by Islamic banks, may strengthen cooperatives’ financial resilience.
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Zurina Shafii, Rose Ruziana Samad and Rochania Ayu Yunanda
Cooperatives are formed with the idea of cooperation. Due to their features, cooperatives have the potential to address the issue of poverty alleviation and improvement in income…
Abstract
Cooperatives are formed with the idea of cooperation. Due to their features, cooperatives have the potential to address the issue of poverty alleviation and improvement in income distribution, which currently is the central focus of governments' economic policy making. Currently, Islamic cooperatives or shari'ah-based cooperatives have also been developing well. Shari'ah-based cooperative is essentially the transformation of conventional cooperative through an approach in line with the Shari'ah principles. It could be one of the best solutions in supporting Islamic banking and finance for unbankable customers. This chapter describes the development of cooperatives in Malaysia and Indonesia. The chapter also discusses the need for cooperative governance and highlights the features of cooperatives that results to their governance is more complex that the governance of business organisations. This chapter also highlights laws, regulation and shari'ah governance measures taken by both jurisdictions to promote growth of shari'ah-based cooperatives.
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