Journal of Islamic Monetary Economics and Finance (JIMF)
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Developing Islamic Waqf Bank as a Mechanism for Financial System Stability
No full textThe establishment of Islamic banking institution all over the world is often related to the proclivity of muslims to live all aspects of their lives in accordance with the teachings of Islam. Islamic bank is one of the components in Islamic financial sector that plays very vital role to generate the growth of economics among muslim society. Indeed, Islamic bank was more robust to the financial crisis compared to the conventional banking institution. Cash waqf is a trust fund established with money to provide services to mankind in the name of Allah. The gifted capital then will be spent for all sorts of pious and social purposes inclusive for the financing and investment objectives. It is recognized that there is limited study in the area of cash waqf especially in the development of Islamic waqf bank (IWB). The main objective of this article is to analyze the possibility and obstacles in developing IWB in the mainstream Islamic financial institutions. The methodo-logy of research in this article is through a qualitative research based on interview with relevant officers in the Islamic banking, waqf, and academic sectors. The general finding in this article shows that IWB can apply cash waqf structure, whereby the cash waqf fund must be converted into fixed assets such as land and buildings. The rental income from the fixed assets and investments then can be channelled to waqf beneficiaries such as funding students’ education, health assistance, giving financing to the entrepreneur, and enhancing muslim economy in various fields. Nevertheless, a proper mechanism of IWB must be developed in order to avoid any obstacles in terms of capital requirement, risky investment, limited number of experts in the field of Islamic bank and waqf as well as legal and regulation requirement.
 
Behavioral Intention to Pay Zakah on Employment Income among Academicians in Kano State, Nigeria
No full textThe institution of zakah is the cornerstone of the Islamic economic system and the disbursement of the zakah fund in line with the Qur’anic injunction ensures equitable distribution and transfer of wealth from the rich to the poor. However, zakah practice in many Muslim countries left wide gap especially in realizing the goal of zakah in poverty reduction. For instance, zakah on employment income is largely neglected despite its juristic backing and changing economic structure that creates high professional income earners that form either upper middle class or lower middle class of the society. The objective of this paper is to explore the intention of income earners to pay zakah on their employment income in Kano State as this will add to the zakatable sources of the State Zakah commission. The paper employed Theory of Reasoned Action to examine the behavioral intention of 300 academics across Kano state government owned tertiary educational institutions to pay zakah on their income. Structural equation modeling was used to analyze the data collected. The overall result shows that the respondents have favorable behavioral intention towards payment of zakah on employment income. Specifically, the positive effect of both attitudinal beliefs and subjective norm on the behavioral intention is revealed. Hence, the need to come up with a comprehensive policy that will boost zakah collection, consequently its distribution to reduce extreme poverty in the state.
 
Waqf Accountability from the Stakeholder Salience Theory: A Case Study
No full textThis study aims to address the issue of accountability in a waqf institution. Specifically, the focus of this study is to shed more light on how the mutawalli (waqf trustee) discharges accountability in managing waqf. In so doing, an interpretive case study in one Indonesian waqf institution, that is, Dompet Dhuafa (DD), was undertaken. The data were obtained through semi-structured interviews. Other sources of data collection techniques employed along with the interviews include observations and document reviews. Furthermore, this study uses the accountability mechanisms as the conceptual lens. The accountability mechanisms consist of disclosure statements and reports, performance assessment, participation, self-regulation and social auditing. In addition to the accountability mechanims, the stakeholder salience theory is also used to understand how the mutawalli shows accountability to multiple stakeholders. The findings of this study reveal that although DD recognizes the salient nature of its stakeholders, it does not prevent the mutawalli from showing accountability to all stakeholders. The mutawalli is of the view that accountability is not limited to accounting and reporting. Moreover, the mutawalli believes that showing accountability to different groups of stakeholder requires different mechanisms of accountability. As such, this study concludes that DD’s commitment to accountability is proven through its effort to deal with stakeholder salience
Determinants of Cash Waqf Contribution in Klang Valley and Selangor: A SEM Approach
No full textCash waqf is becoming one of the popular Islamic financial instruments which not only focus on the religiosity but also has significant impact to the ummah development. This waqf scheme does not require richness in wealth, yet everybody in the society can contribute to cash waqf. The importance of cash waqf is getting popular as it has benefited in many ways, for example it can be used to develop assets and abandoned land for business and agricultural purposes. In addition, cash waqf also can be utilized to help institutions who are facing financial problem or liquidity issues. Nonetheless, rarely we found in the literature that empirically examines the cash waqf determinants and contributions. This paper is one of the few empirical studies that investigate the determinants towards the contribution of cash waqf in Malaysia. The purpose of this paper is to investigate the main factors that influence people towards the contribution of cash waqf instruments, special reference to the Klang Valley and Selangor. This paper employs structural equation modeling (SEM) to verify the determinants of cash waqf contribution. In doing so, we use primary data by distributing self-administrated questionnaire constituting a sample of 114 respondents from Klang Valley and Selangor. Our empirical results reveal that the main factors that driven people towards the contribution of cash waqf products are attitude and social influences, however interestingly religion obligation is not influence the contribution of cash waqf.
 
Opinion of the Zakah Recipients about the Role of Zakah on the Household Food Security: Evidence from the Rural Bangladesh
No full textAll economically solvent muslims according to the eligibility yardstick of giving zakah, are oblized to pay zakah. Payment of zakah is to distribute a certain part of once wealth among the poor, as per the Islamic philosophy, so that the poor can graduate from poverty utilizing this zakah fund. The prime objective of this study is to assess the opinion of the zakah recipients about the impact of zakah funds on their living- standard in terms of food security. Logit model is used to assess the opinion of the zakah recipients on their food security status. The study found no significant impact of zakah fund on the food security of some selected receipents in the rural areas of Bangladesh
Measuring Zakat Impact on Poverty and Welfare Using CIBEST Model
Get PDFThis research attempts to analyze the role of productive-based zakat program in reducing poverty level of mustahik (zakat recipient) households from the perspective of material and spiritual dimensions. The study utilizes primary data which is obtained from interview through questionnaire in DKI Jakarta and Bogor Regency. 221 respondents are selected and interviewed as research samples. They are zakat beneficiaries managed by BAZIS DKI Jakarta and Dompet Dhuafa. The primary data collection was conducted on February until May 2015. CIBEST model comprising four indices is used as tool of analysis. These indices are welfare index, material poverty index, spiritual poverty index and absolute poverty index. It is found that the presence of zakat utilization program is able to increase welfare index of the mustahik by 96.8 percent. The material poverty index and absolute poverty index can also be reduced by 30.15 percent and 91.30 percent, respectively. Unpredictable result occurs on spiritual poverty index in which there is an increase of two households living under spiritual poverty. It means that these two zakat recipient households suffer weakening spiritual values despite materially better-off in the presence of zakat program.
 
The Effectiveness of Zakat Funding through Dompet Dhuafa Beastudi Etos Scholarship Program
Get PDFThe Problems of education and poverty are interrelated. The poor people cannot access higher education and they will remain poor with insufficient education. Therefore, the effort to break the cycles of poverty is to provide opportunities for the poor to obtain higher education Dompet Dhuafa through Beastudi Etos empowers education by providing coaching, mentoring and education financing funding. The population of this research is all of the beneficiaries alumni Beastudi Etos scholarship with a total sample of 190 respondents. The result of the research has shown that Beastudi Etos scholarship program is one of the programs that are quite effective in breaking the cycles of poverty through education and economic improvement. The result also indicates that the program is effective in creating excellent and independent generation. It is shown that 81.58% of respondents have successfully completed their studies (Bachelor, Master and Doctoral degrees), the others are in the process of finishing bachelor degree. 88.95% of the respondents have worked and earn income more than 7,000,000 Rupiah/month, 21.5% have dependents from 1 up to 13 persons. In general, the respondents state that coaching and mentoring which has been given is affected on the character (97.4%), skills (94.2%), socials skill (97.9%), and social generosity (97.9%)
A Cash Waqf Investment Model: An Alternative Model for Financing Micro-Enterprises in Malaysia
Get PDFThis study was designed to empirically determine: (i) to look the factors causes micro enterprises opt for using internal funding instead of external funding; and (ii) to observe the probability of micro enterprises opt for Cash Waqf fund as alternative source of funding their business. The primary data is collected from the administered survey questions in Klang Valley (Selangor and Kuala Lumpur) and the analysis is conducted using statistical analysis and Structural Equation Modeling (SEM). The model is validated its acceptance in the field by adopting the Theory of Reasoned Action (TRA). From the findings, among the factors that lead micro enterprises to use internal funding are strict collateral requirement by commercial financial institutions, high cost of financing, strict documentation requirement and good financial and business track record. Unfortunately, most of them cannot fulfill these conditions and continue to face the problem of accessing finance. The present study has developed the Cash Waqf Investment model to support micro enterprises to improve their access to finance and enhance the skills. Based on the responses received from the field, it has been shown that the intention and readiness of micro enterprises in accepting the model as a source of financial and human capital development services is impressive
Measurement Optimalization of Zakat Distribution at Lembaga Amil Zakat Using Variable Measurement of Economy
No full textThe aim of this research conducted is to optimalize the zakat distribution using economy variabel measurement. Design/Metodology. The Quantitative Research Method is used to analyze financial data, with Optimalize Model as Z variable design, Measurement of Economy as Y variable and Objective Output as X variable, using AMOS program and SEM as tool analysis to confirm that the model can be used as a measurement tool. Research result. Using some indicators to analyze every variable, obtaining output and objective result, influence optimalization of measurement of economy. Conclusion. The measurement of optimalization of zakat distribution using measurement of economy variable, with independent variable/output exogenous and objective, can be used as a model to measure Lembaga Amil Zakat performance. Furthermore, this research need to have some indicators’ development especially in the area of objective variable.
 
The Role of Corporate Zakat on Optimal Capital Structure Policy: Evidence from Malaysian Firms
Get PDFIn the finance literature, the relationship between capital structure and firm value has been extensively investigated, both theoretically and empirically. The main issue on corporate finance is how firms dealing with the important decision of capital structure. In this study, a model of capital structure is formulated in which corporate tax and zakat payment exist by firms into the consideration of combination of debt and equity. The theoretical model as shown by comparative statics prove the implication which is negatively relationship between leverage of the firm and the corporate zakat payment. Meanwhile, the empirical evidence reveals several implication as follows, (1) tax deduction reduces the current liability item relative to the firms that prefer equity financing, (2) the significant of zakat is consistent with the theoretical model that zakat would encourage firm to issue more equity than debt, (3) the strong significant relationship between return on assets with the leverage are the leading indicator of capital structure in all models