bluuebunny/crossref_metadata_2025 huggingface dataset:
Retirement Awareness Among The Working Population Below 40 In Malaysia
Authors: Auni Zulfaka  , Salina Kassim
Published: February 2025

The paper aims to review and discuss retirement awareness among the working population below 40 years old in Malaysia. Retirement awareness is essential since by 2035, Malaysian will be an aging society with 30 per cent of its people will be in the category of 60 years and above. Consequently, retirement awareness helps ensure proper action or strategy regarding retirement preparation before reaching their retirement phase. This study applies a quantitative approach using survey questionnaires as the main instrument of data collection. A total of 287 working individuals the age below 40 years old have participated as the respondents to examine their retirement awareness towards retirement planning. Data collected were analyzed using descriptive analysis. The study provides an in-depth analysis of respondents' retirement confidence (RC), goal clarity (GC), attitude towards retirement (ATT), financial literacy and knowledge related to retirement planning (FL), and the sources of retirement information (SRI), all these are measured using a 5-point Likert scale. The findings indicate that the working adults do have some degree of awareness about retirement, and they do undertake early preparations for their retirement. Overall, this study provides information about the critical implications for the retiring population to survive during their retirement phase and help them to be more confident and well-prepared to face life's reality after retirement. Hence, it is recommended for employers to provide programs or courses that cover retirement areas as one of the initiatives to help their employees be more aware of their future retirement life, which will prevent a financial crisis in the later years.
The Profit/Gain from Islamic Law of Contract Perspective and The Issue Of Ownership Risk (Daman al‐Milkiyyah)
Authors: Tawfik Azrak  , Hani Hazaa
Published: February 2025

In Islamic finance it is crucial to discuss the concept and the meaning of al-bay’ (Sale) and subsequently the concept of “Iwad”, when anyone want to understand issues concerning shariah legitimacy in Islamic banking and finance. The sale (Albay’) or the equivalent value “Iwad”, from shariah view, should consist of three main components, namely: market risk (ghurm), the work and effort (kasab), while the third component is liability (Daman). Albay; which is trade and commerce, constitutes the Quranic alternative to riba, as the contract of sale in Islamic law requires the seller to own the subject matter before executing the sale. The prophet Muhamad (pbuh) said: “do not sell what you do not own”. Therefore, there is a strong link between ownership and market risk. This research paper is analyzing the concept of profit from Islamic law perspective and discuss the issue of ownership risk in Islamic financial contracts. Using in depth analysis of literature review and qualitative methods of content analysis, this research implicitly explains the effect of Ghurm, Kasab, and Daman on Islamic finance transactions that are based on Albay'. Further, it highlights the principle mutual trade and cooperation in Albay' transactions.
Impactful and Collective Microtakaful in Addressing the Impact of COVID-19 Pandemic
Authors: Nurdianawati Irwani Abdullah
Published: February 2025

Present economic condition during the COVID-19 pandemic affects an uncertain environment to every level of community which leads to a nerve-wracking financial concern. The low-income group or popular known as ‘B40’ group seems to be unswervingly affected by recent instability in the nation’s economy that results to situations having multiple uncertain outcomes requiring them to manage their unique risks and seek protection thereof. Vulnerable in their financial position, COVID-19 poses more threat to the health of the low income-earners group more than others especially when the environment they mostly live in is not adequate for hygiene standard level. Previously, there was a concerted effort taken up by a group of Takaful Operators to provide a micro-Takaful protection to the ‘BR1M’ (‘Bantuan Rakyat 1-Malaysia’/1-Malaysia People's Aid) recipients. It was intended to provide Takaful coverage to the breadwinner of a B40 family with an aim to minimize the adverse effect of a possible financial catastrophic if the sole breadwinner of the family died. Micro-Takaful is a way to jointly attend, cater and mitigate the financial risks, which is in line with the Islamic principle of Harm Prevention. The concept of helping and assisting particularly the unfortunate ones to mitigate risk and reduce losses and sufferings due to misfortune constitute the very aspiration of the micro-takaful principles. This study aspires to examine the extent of effectiveness of the previous collective Micro-Takaful projects on BR1M recipients that were proven to benefit 7.2 million recipients as of in 2018 nationwide. Takaful operators who persistently aiming to become the value-based intermediary (VBI) inspired by the Regulator in order to achieve the Sustainable Development Goals by providing Micro-Takaful to the needy people. The data is mainly from the participating Takaful operators in the previous Micro-Takaful and BR1M project in order to evaluate the present and future direction of micro-Takaful initiative in the present ‘BSH’ (‘Bantuan Sara Hidup’/Living Aid).
The Principle of Tadarruj in Islamic Finance: A Conceptual Review
Authors: Muhammad Shahrul Ifwat Ishak  , Ahmad Akram Mahmad Robbi  , Nur Syahirah Mohammad Nasir
Published: February 2025

Even though Islamic finance industry has been recognized among the promising sectors in the world, it is claimed that the modern financial environment is not too conducive to its progress. In fact, Islamic financial institutions have experienced various challenges, risks and restrictions in their operation. To adapt Shari’ah rulings into modern financial system, this effort must be carried out gradually. In this regard, this paper aims to explore the principle of tadarruj (gradual) and its application within Islamic finance. Since this is a conceptual research, it is based on document analysis. It is found that the element of tadarruj can be learned from the prohibition of riba at the time of revelation. In modern time, it seems that this principle has been considered in Islamic banking development in Malaysia, one of among progressive countries in this industry. Since this paper provides a philosophical perspective over the concept of tadarruj, it may be useful for all Islamic finance players including regulators, practitioners, and scholars, particularly to introduce new policies, to develop products and to expand the operation of Islamic finance industry.
Effectiveness of Zakat Community Development Program: A Case Study in West Sumatera
Authors: Vima Tista Putriana
Published: February 2025

This research aims at assessing the effectiveness of zakat community development program, a community-based development program funded mainly through zakat, undertaken at Tanah Datar District, West Sumatera. The program was intended to establish a center for superior goat breeding in the district which was expected to enhance the quality of life of the program beneficiaries (zakat recipients) and to transform them to become zakat payers. The program was designed as four years program which was started in 2016 and ended in 2020. The research was designed as case study research involving in-depth interviews, site observations, and documentary analysis. The time spent for conducting the case study research was two years and 9 Months (December 2018- October 2021). The findings of the study showed that the program can be categorized as ineffective program due to the following reasons. First, the program had been introduced as a top-down approach. The program attempted to create a totally new community, a breeder community, in the selected village while the residents do not have qualities required to become a good breeder. The program could have been a successful one if the program focusses on developing the existing local economy potency. Next, the Zakat Board of Tanah Datar District has no institutional capacity to implement the program. The implementation had relied on the assistance from a research center in North Sumatera Province. Once the support was withdrawn, Zakat Board of Tanah Datar could not do much with the program. Finally, the program was lacked stakeholders’ support and lacked transparency and accountability.
Potential Solutions to Financing Problems among the Poor: A Case of Baitul Maal Wa Tamwil (BMT) in Indonesia
Authors: Mukhtar Arif Siraj  , Aditya Hadid Riyadi  , Abdukadir Abdullahi Sheik  , Abdukadir Abdihakim Jama  , Nur Harena Redzuan
Published: February 2025

Many people in the poor category do not have access to most financial services, especially from formal banking institutions. For example, in Indonesia, as of 2020, there are approximately 91.3 million Indonesians who still do not have access to financial or banking services in the country. Given the difficulties to access financing to undertake their economic activities, the poor have been economically unproductive and remains in poverty. There is a need for non-banking financial institutions (NBFIs) to play a role in reaching people who are still disconnected with the banking system. Several models of NBFIs can be engaged to solve the problem. Indonesia, as a country with the largest Muslim population in the world, has a very well-known NBIFI, namely Baitul Maal wa Tamwil (BMT). With a business model that focuses on the lower-middle-class economy and the MSME sector, it is hoped that BMT is able to provide a solution to the problem of access to financial services for the poor. This study aims to determine the issues and challenges of BMT in providing financial service solutions to the poor in Indonesia. In addition, this study provides alternative solutions to the problems faced by BMT in their efforts to improve financial inclusion in Indonesia. The study adopted a qualitative method based on a review of literature from research journals and other types of publications. The study hopes to provide enriching inputs in the development of the Islamic microfinance industry in Indonesia and other countries.
English Case Law on Islamic Finance: Interpretation and Application of Shariah Principles
Authors: Mohamad El Daouk
Published: February 2025

The emergence of Islamic finance in the United Kingdom (‘UK’) has rendered it a remarkable alternative to conventional finance. The following paper studies how the English and Welsh courts interpret and apply Shariah-based Islamic finance principles under English law. The paper takes the view that Islamic finance arrangements and the Shariah principles that inspire them are capable of being conveyed through their conventional counterparts under English finance law, insofar as doing so does not contravene English law. The focal points enshrined under this paper are: [1] the means through which Islamic finance arrangements are interpreted and applied under English law; [2] the approaches undertaken to honour such Islamic finance principles without contravening English law; and [3] the approach taken when the courts are faced with a conflict of laws. Using legal analysis, this paper finds no one-fit-for-all method for the English and Welsh courts when dealing with Islamic finance cases. However, the unanimous principle is that Islamic finance arrangements will never be treated exceptionally to their conventional counterparts.
Determinants of Zakat Compliance among Muslim Individuals: A Systematic Literature Review
Authors: Syadiyah Abdul Shukor
Published: February 2025

Zakat, also known as almsgiving, is the fourth pillar of Islam. Extensive literature has reported different factors in influencing zakat compliance. This study aims to identify, review and synthesize the determinants of zakat compliance among Muslim individuals. The present paper carried out a systematic literature review (SLR) of the related literature. The inclusion criteria were: i) publication date between 2000 and 2020, ii) being an empirical study, iii) written in English, and iv)published in the Scopus or Google Scholar database. Following Preferred Reporting Items for Systematic Reviews and Meta-analyses (PRISMA) procedures, 12 eligible empirical studies were included. The review suggests that compliance to pay zakat is determined by 1) psychological factors, 2), environmental factors, 3) organizational factors and 4) socio-demographic factors. This study contributes to the literature by consolidating studies on the factors determining zakat compliance among Muslim individuals and offers some implications for practitioners in implementing appropriate strategies to increase zakat collection.
Climate-Related Disclosure in Malaysian Wakalah Sukuk
Authors: Mohd Noor Noor Fadhzana
Published: February 2025

It is evident that climate change, especially those related to Covid-19 has opened many new avenues of research and policy making initiatives. Climate-related disclosure is among them. While a number of policies have been drafted and finalized in both local and international markets, the practices to conform to the policies are only at the infant phase. Considering the initiatives taken by global policy makers and local regulators in relation to climate change, it is imperative to provide some insights on the responses of various financial players. For a beginning, this study has considered a number of sukuk issuers and their climate-related disclosures. Since these issuers’ principal activities involve various business activities, diversity of climate change and climate-related disclosures are anticipated. Using a document analysis on 13 selected Wakalah sukuk documents, it was found that there are four types of climate-related risk disclosure with six types of disclosure practices. Further analysis is based on the provisions of Climate Change and Principle based Taxonomy (CCPT) (2021) and recommendations of Task Force Climate related Financial Disclosure (TCFD), the climate-related disclosure was found to be minimal and inadequate. However, the findings of this study are only limited to small sample size. Nonetheless, the findings may provide some insights for the financial players in their efforts to provide a quality climate-related disclosure and practices in tandem with the initiatives of the local regulators and international policy makers.
Islamic Financial Engineering at the Crossroads: Between the Need for Hedging and the Compliance Requirements
Authors: Kafou Ali
Published: February 2025

Financial engineering is a vital need for the prosperity of Islamic finance. It offers solutions to create new opportunities, expand the existing market and create market niches for Islamic financial institutions. Despite its importance, the literature on Islamic financial engineering is scarce, and almost nothing exists from a practice perspective as this aspect is very secretive within Islamic financial institutions. The present paper is a theory-based-research attempting to gather, analyze in depth and present the thematic of Islamic financial engineering and related issues to its application, especially for market risk hedging. We first start with the theoretical background of Islamic financial engineering to identify its principles and understand the challenges it faces. As a case study, we delimit our research to Islamic explicit derivatives, which are designed instruments to hedge market risk. The analysis of those instruments shows that the current path of Islamic financial engineering is towards imitation and replication of conventional products rather than designing genuine conceptual alternatives. Finally, we argue that the imitation strategy is not inevitable; it is possible to do without within the mutuality framework.
Evaluating Sukuk Default Factors: A Case Study on Dana Gas Sukuk in the UAE
Authors: Ali Mohammed Imad , Hasan Aznan , Sharofiddin Ashurov
Published: February 2025

In the last couple of years, the Islamic finance industry was rocked by several sukuk defaults, the most prominent among them being Dana Gas Sukuk. These defaults led to hordes of questions related to Shariah governance, unstandardized legal documentation, Shariah non-compliant structure, lack of intent and transparency, incongruence in governing laws, and a lack of regulatory support. This paper assesses Dana Gas Sukuk by conducting a qualitative analysis to determine the circumstances that led to the failures of this sukuk. Using secondary sources this paper employs a content analysis method and scrutinizes the sukuk understudy with a special focus on its structure, governance mechanism, and legal jurisdiction. Thus, the study suggests standardizing the legal documentation and Shariah interpretation of the Islamic capital market, as it would reduce the risk of Shariah non-compliance and remove all the uncertainty and ambiguities and would help to avoid such sukuk default. Finally, it can be asserted that an attempt is made to offer some recommendations that hopefully will avert similar defaults in the future and help the Islamic finance industry to achieve greater standardization and clarity.
Muslims’ Perception of Islamic Insurance (Takaful) in Malaysia
Authors: Syed Ahmed Salman  , Yukichika Kawata
Published: February 2025

Conventional insurance does not comply with the teachings of Islam. Experts of Islamic finance recommend takaful as an alternative to conventional insurance. Malaysia is on track to becoming a global center for Islamic finance; the Malaysian market harbors fifteen takaful companies. The takaful industry, compared to other Islamic financial areas, is relatively new, and the infiltration rate remains low. This study aims to compare products offered by Islamic insurance, conventional insurance, and products in general to analyze the strengths and weaknesses of Islamic insurance. A questionnaire was distributed to insurance policyholders following any religion residing in Malaysia. The snowball sampling method was used, and 500 responses were obtained, from which respondents (Muslim) (N=322) was analyzed. This study revealed that 1)there is room for improving the clearness of takaful when explaining its features to Muslim, and 2) takaful is lag theprogress in many advertising methods such as websites, cinemas, and televisions.
An Innovative AI Blockchain Framework for Islamic Microfinancing
Authors: Katterbauer Klemens , Hassan Syed  , Laurent Cleenewerck de Kiev
Published: February 2025

The digital economy has undergone significant transformations with blockchain becoming a household name in the fintech environment. Besides powering cryptocurrencies, blockchain technology enables power transactions in a variety of forms and enables decentralization which may reduce transaction costs. Islamic microfinance has become important with many new institutions arising in order to satisfy the demand for microfinance services while ensuring that these services comply with the Shariah Law. Cost of transactions and low degree of digitalization are the major obstacles with current solutions. We present an innovative blockchain artificial intelligence framework for the optimization of Islamic microfinance service provisioning as well as providing financial and transaction services in order to ease transactions and make them more secure and readily available. The framework was evaluated on a large dataset from the Central African Republic, and we could demonstrate strong performance of the AI-blockchain framework. The framework provides a viable solution for Islamic microfinancing to enhance transactions services and overcome some of the existing challenges with Islamic finance.
Measuring Financial Knowledge Among Muslim Women: The Case of Indonesia and Malaysia
Authors: Aulia Arifatu Diniyya  , Kassim Salina , Mohd Yunus Saidatolakma
Published: February 2025

Financial literacy is taking an important role in supporting the development of women's empowerment. To determine the action for financial education for women, the level of financial literacy among women is needed to be observed. This study aims to measure the level of financial knowledge among Muslim women in Indonesia and Malaysia. A quantitative method of study is employed by distributing 411 questionnaires that consists of Islamic financial knowledge and general financial knowledge questions. As the sample of this study focuses on women in Indonesia and Malaysia, the findings of this study could not be generalized to other Muslim women in other countries. The research found that Muslim women in Indonesia and Malaysia have a moderate Islamic and general financial knowledge level. Several areas of weaknesses found in this study are; the understanding of the role of parties in mudharabah contract, knowledge on zakat, and the simple time value of money calculation. These three areas of weaknesses could be emphasized in the financial education program.
The Role of Istihsan in Applying Maslahah in Islamic Finance
Authors: Ishak Muhammad Shahrul Ifwat , Mohd Sharoni Syairazi Muhammad Husni
Published: February 2025

This paper identifies the role of istihsan in Islamic finance that should be emphasized to strengthen the element of Shariah compliance. Over the period, it is argued that applying Shariah rulings in Islamic finance has witnessed several challenges and difficulties resulting in some aspects may need toleration for the sake of maslahah. The data of this study is based on library research, by referring to classical and contemporary books of usul fiqh, academic and non-academic works and related resolutions from the BNM and SCM. The findings reveal that the role of istihsan can be manifested through providing an exceptional ruling from general rulings, considering modern norms of business practices before applying rulings, harmonizing between Shariah and civil laws, and adapting Islamic finance within the change of circumstance. While this study utilizes limited secondary data as well as it focuses on Malaysia, it engages with the real Islamic finance issues in this country. Thus, this study is hoped to benefit many parties who involve directly and indirectly in this industry, particularly to deeply understand the application of Shariah principles in Islamic finance.
Risk-Taking in Public versus Private Banks: Evidence from Islamic Banking
Authors: Binhowaimel Muath Mohammed
Published: February 2025

This study examines risk-taking by publicly traded and privately owned banks in an Islamic banking sector employing a diversified international sample of 133 IBs across 35 countries. Unlike the vast majority of previous research, this study uses ordinary least squares (OLS) and Heckman's two-step models to analyse a comprehensive risk-taking by two proxies. It investigates the risk and stability features using the credit risk and Z-score as the insolvency proxy. The study finds that publicly traded banks engage in more risky activities than their privately owned peers. The study further analyses the link between ownership structure and risk in Islamic banks, finding that state ownership shows that it is not a determinant in taking risk differences. On the other hand, institutional investors are more likely to engage in risky activities when they hold higher stakes. Despite this, the results provide some advice to the financial actors in their attempts to deliver information to the risk-taking practices in concert with regulators and international policymakers.
Hybrid Sukuk in Light of the Recent Implementation of AAOIFI Shariah Standard no. 59 Related to the Sale of Debt
Authors: Itam@Ismail Muhammad Issyam , Noordin Kamaruzaman , Mansor Fadillah
Published: February 2025

Sukuk is among the primary fund-raising method for the sovereigns and corporates in a Shariah-compliant manner. Besides the Islamic investors, sukuk has been well received by conventional investors as an instrument that can provide similar risk and reward equal to the bond. However, as there are various sukuk structures in the market, hybrid sukuk is among the popular structure preferred by the issuers. One of the reasons is it requires a lower physical or tangible asset requirement i.e., 30% out of the total sukuk issuance amount ("tangibility ratio"). However, this changes with the implementation ofShariah Standard no. 59 on the Sale of Debt by Accounting and Auditing Organisation for Islamic Financial Institutions(“Standard 59”) (“AAOIFI”). It mandates a higher tangibility ratio requirement and an additional requirement ofmaintaining the tangible asset value. Thus, via document analysis methodology, this paper aims to explore further theimplication of these requirements toward the underlying asset condition and tradability of hybrid sukuk, as well as otherpotential impacts.
The Nature of the Administrative Relationship between the Shariah Board and the Stakeholders in the Kingdom of Bahrain
Authors: Dawood Hassan Mazin Abdulhameed , Haji Besar Mohd Hairul Azrin , Jaidin Jainatul Halida
Published: February 2025

Corporate governance involves a set of relationships between a company’s management, its board, its shareholders, and other stakeholders. With regards to Islamic corporate governance (ICG), the institution of the Shariah board comes into the picture and plays a crucial role in ensuring that all corporation activities are in line with the Shariah principles. In addition, shareholders also play a big role as active participants and conscious stakeholders in the process of decision-making and policy framework to promote the interest of the stakeholders. The other stakeholders including the community should also play their roles in stimulating the social well-being of the community. This paper attempts to define the administrative relationship between the Shariah board and other stakeholders by looking at their duties and roles in the Kingdom of Bahrain. For this purpose, it relies on doctrinal and Islamic worldview methodologies and uses both content and legal analysis methods. After the discussion, it is concluded that the administrative relationships between the Shariah board and other stakeholders may take the form of wilāyah, imāmah, or proactive and reactive istishārah (consultation), depending on the type of stakeholders.
Digital Mutual Stimulation Theory for Strengthening Islamic Finance in China
Authors: Yu Shanxuan
Published: February 2025

Central Bank Digital Currencies (CBDCs) represent a very important innovation in the digital and payment space affecting the participants in the global financial services industry. A CBDC is an innovation and is a digital payment instrument that is denominated in the national unit of the account. Islamic finance has similarly experienced significant growth in the last several decades, but challenges remain in terms of transaction processing speed and cost. Given the significant opportunities of central bank digital currencies in reducing transaction costs, and increasing transaction speed, the interrelationship between the promotion of Islamic finance and CBDCs is of significant interest. The conceptualized theory digital mutual stimulation outlines the growing relationship between the strengthening of Islamic finance and the utilization of the digital yuan. Specifically, the theory provides an outline that the ease in the conduct of transactions, as well as reduction in transaction cost and greater democratization will significantly strengthen the provisioning of Islamic financial products. The article utilizes a grounded theory approach integrating empirical research data from interviews and surveys. The digital nature of the digital yuan acts as a stimulus for smart contract execution and reduces the need for an intermediary as well as increases trusts between the contracting parties. This becomes especially important for international trade and transfers, as well as for asset purchases. Given the connection in Islamic finance between financing and real assets, the digital Yuan can play an important role in strengthening this interconnection and support Islamic finance in China and beyond.
Do Microtakaful Schemes as Risk Management Tools Contribute to Halal Small Business Sustainability? Evidence from Malaysia
Authors: Haruna Babatunde Jaiyeoba  , Moha Asri Abdullah  , Wan Mohd Naziman Wan Ahmad  , Yudi Fernando
Published: February 2025

Microtakaful schemes have become increasingly crucial for risk management among halal small businesses. However, little is known about which of the schemes offered contribute to halal small business sustainability. Hence, this study intends to ascertain whether microtakaful schemes as risk management tools contribute to halal small business sustainability. This research adopts a quantitative research design by way of survey methodology to obtain data from halal small business owners and managers in Klang Valley, Malaysia. Additionally, exploratory factor analysis (EFA), confirmatory factor analysis (CFA), and structural equation modelling (SEM) were used to uncover which of the microtakaful schemes significantly contribute to halal small business sustainability. The results show that disability and family microtakaful schemes are positively and significantly related to halal small business sustainability. Whereas property and health microtakaful schemes are found to be positively, but insignificantly related to halal small business sustainability. Meanwhile, our findings on property and family microtakaful schemes reveal that more awareness and education should be prioritised by microtakaful operators.
The CSR of Islamic Banks and Halal Businesses in the Post Covid-19 Pandemic Era
Authors: Haruna Babatunde Jaiyeoba  , Md Siddique E Azam
Published: February 2025

This chapter discusses the CSR activities of Islamic banks and Halal companies in this era. As the world begins to transition from the Covid-19 pandemic, there is a need for Islamic banks and Halal businesses to retrospect into what has been learned during this crisis and to understand that stakeholders are now more concerned about how businesses operate and contribute to the betterment of the community than ever before. To avoid running the risk of losing customers and employees, Islamic banks and Halal companies must genuinely make large efforts to further their CSR initiatives by committing and promoting the greater good in society. The CSR sphere in post-Covid-19 must minimise, if not eliminate, the existential threat of the widening gap between the haves and have nots created by the Covid-19 outbreak. To this end, the researchers intend to identify and expose Islamic banks and Halal companies to various CSR activities that could help enhance their reputation, gain a competitive edge, achieve cost savings and operational efficiency, reinforce their credibility among Halal consumers and communities, manage their regulatory compliance and mitigate associated risks, and improve their long-term resilience and adaptability in this era. Specifically, the CSR activities covered in this study include commitment to Halal best practices, Zakat and charitable donations, Halal economic responsibility, legal responsibility, environmental responsibility, employee welfare, and responsible dealing with clients. Following the discussion of these CSR activities, the implications, with respect to the practice and theory, of this study are explicated, and recommendation and limitations of this study are offered.
Role of Institutional Support in Economic Development: Investor Perspective. A Case of Government of Pakistan (GOP) Ijarah Sukuk
Authors: Uzma Kashif  , Ahmed Ali Sidiqui  , Hafiz Saad  , Shahzad Ali
Published: February 2025

The study aims to investigate the role of Ijarah Sukuk in the economic development of the Pakistani business environment an initiative taken by the Government of Pakistan (GOP) by issuing Shari’ah-compliant investments at a national level during a period of deep financial crisis in the country. A modified questionnaire was used in this study to answer research questions and test the evolving hypothesis. Questionnaires containing 30 items were distributed and collected from 379 respondents as representative of Sukuk investors. The data collected was analyzed using Smart PLS. The findings suggest that within the recently reorganized Islamic Market of Pakistan, the variable with the greatest influence and strongest predictive power is Shari’ah Compliance. It is followed by market structure and subsequently the quality of underlying assets. However, once Shari’ah-compliant securities are introduced, investors are anticipated to seek the advantages offered by well-structured markets, such as yields, market liquidity, and the balance of Islamic Securities in both long and short-term Sukuk. This study represents a pioneering effort in Pakistan, as it examines the impact of fundamental investor characteristics and Shari’ah compliance on investment decision-making in the nascent Islamic Market. The findings of this study hold potential value for countries at the early stages of establishing Islamic banking cultures. Moreover, the results will prove beneficial for policymakers as they seek to expand the range of Islamic instruments available to investors through the utilization of Islamic modes of financing. Additionally, the study sheds light on how the market environment, regulatory measures, and other investor-oriented factors can be optimized to create a more viable and attractive environment for investors.
Towards Adopting Zero Interest Financing (ZIF) and Profit and Loss Sharing (PLS) Principle in Islamic Microfinance: The Case of Amanah Ikhtiar Malaysia
Authors: Saad Norma Md , Mohamed Mustafa Omar , Le Long S , Haneef Mohamed Aslam , Abdul Ghani Mazanah
Published: February 2025

Microfinance institutions evolved to alleviate poverty by providing micro-credit to the poor. Islamic microfinanceÂ evolved to provide alternative to the interest based conventional microfinance. However, the financing modes beingÂ used by the Islamic micro-finance institutions (IMFIs) are mostly debt based, which have resemblance to the interestÂ based conventional modes. IMFs shun away from using the PLS scheme, which they consider risky. Theoretically, itÂ is argued that PLS mobilizes factors of production, encourages risk sharing and ensures distributive equity in incomeÂ and wealth. There is hardly any literature that has shown that PLS is workable in a pristine environment of zeroÂ interest. Furthermore, there is hardly any studies that have discussed on the feasibility of financing the poor using aÂ combination of PLS and zero interest financing (ZIF). This study will experiment on the feasibility of providing smallÂ financing using a combination of PLS and ZIF to empower the working poor. The research incorporates literatureÂ survey, field study and business model applications in its methodology to achieve the desired objectives. The resultsÂ of this pioneering project are expected to promote the local socio-economic welfare of the poor and provideopportunities in applied areas for future research.
Speculative Rational Bubbles: Asset Prices in GCC Equity Markets
Authors: Abdul Manap Turkhan Ali , Omar Mohd Azmi
Published: February 2025

Conventional theory of speculative bubbles describes stock bubbles as stock prices that exceed their fundamental value because current owners believe that the stocks can be resold at an even higher price in the future. A speculative bubble driven by rumors and not supported by fundamentals will result in mis-allocation of resources into non-optimal uses. Therefore, identifying and dating speculative explosive bubbles has been a major concern in the economic literature.Â  This study examines the presence of the phenomenon of stock market bubbles in the GCC countries including Saudi Arabia, Qatar, United Arab Emirates, Oman and Bahrain over 2000 to 2013. Considering rational bubble change stock price from random walk to an explosive regime and traditional unit roots has less power in detecting periodically collapsing bubbles, this study employ newly developed testing approach of right tailed unit root test to not only investigates the presence of rational periodically collapsing bubbles, but also stamps the times of bubbles emergence and collapse. Our empirical results indicate the existence of rational bubbles in GCC stock market. The estimation of the starting date of the bubbles indicates that explosive regime emerges in the early 2000s.
A Critical Analysis of Poverty Alleviation Strategies of Al-Hayat Relief Foundation in Nigeria
Authors: Adepoju Razaq Idowu , Oyesanya Oyekolade Sodiq
Published: February 2025

Poverty is a global phenomenon that is dynamic, complex and multi-dimensional. It remains a major factor in human history. In recent years, however, international consensus has tended to focus development goals on poverty alleviation. Three actors, therefore, have been identified in the existing literature as agents for poverty reduction, the bilateral or multilateral corporations, the governments and the non-governmental organisations (NGOs). However, studies have shown that the roles of the third group are remarkable in the poverty alleviation agenda the world over. The non-governmental organisations are capable of introducing participatory development opportunities for grassroots people or poor communities. Using observational technique, interview and content analysis,this paper is aimed at presenting a critical analysis of poverty alleviation strategies of Al-Hayat Relief Foundation, with a view to establishing a framework for the Muslim communities in Nigeria in their quest for poverty reduction. The Foundation is one of the non-governmental organisations providing non-interest microfinance credit facilities for Muslims in Southwestern Nigeria.
Impact of Financial Crisis on Non-Traditional Income: Islamic Banks vis a vis Conventional Banks
Authors: Alfarisi Mohamad Fany
Published: February 2025

The present study aims to investigate the existing of shock due to the subprime financial crisis (2008) to the commercial banks performance in ASEAN-5 countries (Indonesia, Malaysia, Singapore, Thailand, and Philippine) particularly on the non-traditional activities aspect. Commercial banks in the present study are classified into Islamic and conventional banks. The data of 136 commercial banks in ASEAN-5 countries during the period of 2004-2012 from have been collected from the Bankscope database. The composition of sample based on type of bank is twenty samples are categorised as Islamic banks and the remaining 116 samples are under the category of conventional banks. We manage to run panel data regression using three estimation methods namely pooled-OLS, fixed effects and random effects methods. Based on the Breusch and Pagan Lagrangian Multiplier (LM) and Hausman tests, the random effects method is preferred. Islamic banks earn relatively lower non-traditional income compared to conventional banks. During the 2008 financial crisis commercial banks earn relatively lower non-interest income. Additionally, we find no evidence than Islamic and conventional banks non-traditional incomes are significantly different during the 2008 global financial crisis.
Analysis of Loan Loss Provisions: Malaysia and Gulf Corporation Countries (GCC) Islamic Banks
Authors: Mat Rahim Siti Rohaya , Ahmad Nazar Shafinaz , Ramli Nurhaslina
Published: February 2025

This paper examines the relationship between loan loss provisions (LLP) in connection with bank profitability, bank liquidity and bank capital. We investigate loan loss provisions (LLP) of Islamic banks in Malaysia and the Gulf Cooperation Council (GCC). This paper seeks to analyze a full-fledged Islamic banking system operating on a parallel basis with a full-fledged conventional system. The sample micro balance panel data analysis comprises a total of 196 Islamic banks covers the period 2006-2012. Analysis was carried out via Generalized Methods of Moments (GMM) model. The authors estimate Generalized Methods of Moments (GMM) models perfectly to overcome endogeneity problems. The evidence remains valid for all instrument used in this study, including loan loss provisions, total deposit ratio, equity loan ratio, and return on average equity and gross domestic products. The empirical result shows loan loss provisions (LLP) is found to be statistically significant for our full samples and GCC Islamic banks but not in the case of Malaysian Islamic banks.
Behaviour of the Islamic Stock Market in a Prolonged Downturn in the Global Market: Empirical Evidence from Malaysia
Authors: Mustafa Siti Aisyah , Ramlee Roslily , Kassim Salina Hj
Published: February 2025

By focusing on Malaysian data, this study investigates the response of the Islamic stock market to changes in major macroeconomic variables such as industrial output, money supply, unemployment rate, exchange rate and foreign interest rate. It focuses on the period from January 2010 to December 2014 to capture the period of a prolonged downturn in the global financial market due to the U.S. financial crisis which started in 2007. The study adopts the co-integration approach of the Auto Regressive Distributed Lag (ARDL) model in order to capture the long-run relationship between the variables. The results show that the Islamic stock price reacts positively to the domestic factors, namely industrial activities, money supply, unemployment rate and real effective exchange rate disturbances. Interestingly, it reacts negatively to the foreign interest rate, suggesting investorsâ€™ â€œflight to qualityâ€ behaviour during a downturn in the global equity market.
Interest Rates and Financial Instability
Authors: Hadian Mehdi , Davoodi Parviz
Published: February 2025

Several financial crises, which have occurred in different geographical areas over the past 100 years have reinforced the notion that crises and market imbalances are inherent characteristics of capitalism. By surveying the transitions of financial markets, especially during the last three decades, it has been clarified that the existence of interest rates can be considered as a fault line in the economic system and will disrupt the harmony between the real and financial sectors. Based on quarterly information in the real and financial markets of the United States during 1993-2014, and econometric analysis of Granger causality, the result of this study shows that the presence of usury and its growth in the conventional economic system will expand the debt markets, which cause the separation between nominal values in the financial markets and their intrinsic values in the real sector of the economy. With the emergence and increase of this separation, asset price bubbles are created. The greed of economic agents to take advantage of profitable opportunities, which occur due to price bubbles, increases borrowing and, therefore, expands the debt markets. Moreover, during this process, speculation activities will inflate asset prices excessively, causing more separation between the real sector and the financial sector. Consequently, the amount of monetary resources for the real sector will be decreased and, therefore, economic growth and employment will decline. Although some macro-prudential policies have been implemented to mitigate systemic risks and reduce the incidence of financial crises, they will not remedy the inherent instabilities of financial contracts. Islamic financial rules provide the economic system with mechanisms, which bring robustness and resilience to the financial system.
Effect of Crude Oil Spot and Futures Price Volatility on South East Asia Islamic Equity Market
Authors: Quadry Mahmud Oluwaseyi , Adeyemi Adewale Abideen , Jaiyeoba Haruna Babatunde , Alli Rafat Motunrayo
Published: February 2025

This paper examines the effect of crude oil price volatility on Southeast Asia Islamic equity market index. The paper focuses on the long run and short run effect of both the spot and futures price of crude oil on the Islamic equity market index in south East Asia. Daily data from September 2007 to June 2015 obtained from Bloomberg database is used in the paper. The analysis based on time series techniques within the co-integrating framework. The vector error correction model is used in this study complimented with Impulse Response Factor IRF to examine out of sample causality. The major finding of this study is that crude oil spot and futures prices have positive impact on the Islamic equity index in Malaysia, Singapore and Thailand. Though based on the short run relationship, there is remarkable difference in the speed of adjustment back to equilibrium among the Southeast Asia Islamic equity indices. Given the ongoing price volatility of crude oil prices and the market expectation that it may not abate anytime soon, this paper promotes the viability of the Southeast Asia Islamic equity market as investment safe haven to mitigate the impact of such volatility in crude oil prices.
A Framework for Determination of Actual Costs in Islamic Financing Products
Authors: Mohd Nor Azman , Haron Muhamad Nasir
Published: February 2025

Islamic banking commonly considered as an alternative to the conventional banking system, conducts its business based on certain financial contracts in order to attain profit, while doing away with the element of interest (riba). Among the services offered by Islamic financial institutions (IFI) are financing products and fee-based services to generate profits free from interests and other non-permissible incomes. The fee-based services conducted by Islamic banks may raise some Shariâ€™ah issues such as the practice of charging a fee on services related to loan (qard) facility. Similarly, in financing activities, the IFI also imposes some amount of compensation or related charges in the case of late payment or default events for such financing. This paper aims to discuss the mechanism to determine the calculation of such actual charges and fees from Shariâ€™ah perspective. Nevertheless, this paper does not intend to discuss the issue of â€œpricingâ€ for Islamic financial products to determine its sales price and profit margin. This paper proposes Shariâ€™ah compliance parameters on the computation of the actual costs for some related financing products offered by Islamic financial institutions.
Risk Management in Changing Benchmark Rates Regime: Prudential Implications for Islamic Banks and Supervisors
Authors: Chattha Jamshaid Anwar , Alhabshi Syed Musa Syed Jaafar
Published: February 2025

Post-global financial crisis scenario has presented extraordinary challenges to the global economy, in general, and the banking industry, in particular. This has brought the financial industry to a set of new challenges including risk management in changing benchmark rates risk for Islamic banks. Thus, in recent years, the management of benchmark rates (or interest rates) received considerable prominence in the banking sector due to a number of reasons including supervision of banksâ€™ benchmark rates under Basel II Pillar II. Taking into account the specific features of Islamic banks, the purpose of the paper is to theoretically and empirically review the possible prudential implications of lowly and increasing benchmark rates risk, and provide a sturdy risk management and regulatory perspective for Islamic banks and supervisors. For low rates perspective, policy rates of 12 central banks were collected and analyzed.  However, for increasing rates scenario, we used duration gap and stress testing approaches, with a sample of 50 Islamic banks from 13 countries, for the period 2009-2015. Our empirical results indicate that persistently low benchmark rate regime carries strategic implications for Islamic banks including pressure on profitability, excessive risk taking and distortion in credit allocations. On the other hand, an increasing benchmark rate regime indicates the significant loss of the capital base, emergence of displaced commercial risk causing early withdrawals by the customers due to higher expectations in dual banking systems. This study concludes that implications under both scenarios call for a better risk management with appropriate tools and effective supervisory oversight for Islamic banks.