INCEIF Knowledge Repository (INCEIF University)
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Waqf development in Malaysia
No full textThe practice of waqf has existed in Malaysia since the coming of Islam to the Malay Archipelago in the 9th century (CE) (Arnold, 1913). The early awqaf properties were in the form of prayer rooms (surau), mosques, cemeteries and subsequently, madrasahs (Dahlan & Kamarudin, 2006). Mahamood divides the history of waqf in Malaysia into three phases, namely, pre-colonial Malaya, colonial Malaya and postindependence Malaya (Mahamood, 2006) but notes that there has not been much research done on the pre-colonial period in order to confirm the first awqaf properties in Malaya. Based on the premise that the earliest awqaf created were in the form of mosques, the earliest official mosque is said to be the Kg. Laut mosque in Kota Bharu, Kelantan that was built in 1676 CE (Mahamood, 2006). Nevertheless, recent research by historians, based on excavation of Lembah Bujang, an area in the northern state of Kedah in Peninsular Malaysia, has found traces of an old mosque dating back to the 9th century (Dahlan & Mohamad, 2018)
First National Finance and Amana Takaful collaborate to develop Islamic finance in the Maldives
No full textOn the 1st November 2022, First National Finance and Amana Takaful (Maldives) signed an MoU to develop Islamic finance in the Maldives. The MoU was signed by Hassan Ziyath, CEO of First National Finance Corporation, and Hareez Sulaiman, the managing director of Amana Takaful (Maldives). The MoU is to further develop Islamic finance in the Maldives by facilitating the structuring of Islamic finance instruments and conducting awareness about Islamic finance. First National Finance Corporation was incorporated on the 15th July 2021 and its vision is to be the leading catalyst for financial sector development and integration of the local economy to the global financial system
COVID-19 and GCC stock market performance: an analysis of the boon (financial stimulus package) and curse (oil price plunge) effects
No full textThis study aims to investigate the reaction (in terms of returns and volatility) of Gulf Cooperation Council (GCC) country-wise stock markets (both conventional and Islamic) in response to the surge of COVID-19 cases, with special reference to the announcement of financial stimulus packages in each country and the recent global oil price plunge. Further, the study also examines the impact of COVID-19 cases on the stock market returns of each GCC country and the continuous dynamics of correlation between COVID-19 cases and GCC stockmarkets. This study uses an exponential generalized auto regressive conditional heteroskedasticity model and continuous wavelet coherence to estimate the stock market volatility and comovement between COVID-19 cases and stock returns. Empirical findings indicate an adverse reaction (negative returns and high volatility) during the period examined, with the stimulus package resulting in a positive transformation of returns in each country-level stock market as well as the regional stock index. Further, no evidence of an adverse effect of the oil price plunge is identified. All findings are identical between both conventional and Islamic stock indices. While ample research has been conducted on the impact and dynamics of the pandemic on stock markets, little has addressed the areas of financial stimulus packages and the oil price plunge. The findings of this study show that further research needs to be conducted to elucidate the ways in which effective financial stimulus packages can be formulated in the GCC region to mitigate the adverse effects of COVID-19 for economies without causing major financial deficits, as well as to find strategies to diversify economies away from the oil curse
The need to digitize sukuk issuance amid Covid-19 crisis
No full textCovid-19 pandemic was a health crisis that plunged the world into economic turmoil due to its resultant national lockdowns across economies which brought business and market activities to a standstill. In order to adapt to ensuing restrictions owing to the pandemic, forge ahead in a new way of living, work and interactions with one another (new normal), digitizing business and market operations is considered a necessary option. Sukuk is an essential Islamic capital market product whose operations involve multiple parties/intermediaries alongside some technical financial, administrative and legal/shariah processes. On this note, this chapter aims to study and examine the need for digitizing and automating sukuk operations and related activities to pave way for innovation, development and better continuity of sukuk market. In conducting the study, a review of literature approach is employed where relevant works on sukuk and fintech were examined. Using content analysis, the chapter explored digitization of sukuk in the Islamic capital market via fintech and blockchain and associated benefits, including peculiar challenges therein. An interview was also conducted to better understand the Wethaq case study. The chapter reveals that digitizing sukuk issuance adds value to sukuk and remedies certain inadequacies associated with sukuk transactions; can increase transparency of underlying sukuk assets and cash flows and can reduce costs due to lesser number of intermediaries. Digitization is the future of sukuk issuance and will promote sukuk well through the Covid-19 crisis and beyond
Private credit in dual banking countries: does bank ownership type matter?
No full textThis study investigates how the effects of government and foreign bank ownership on private credit vary in the cases of Islamic and conventional banks using data extended from Claessens and van Horen (2014) of 29 dual banking countries from 1995 to 2017. In support of the political view of financial development, we find that the presence of state-owned Islamic banks seem to be slightly less harmful to private credit flows than their conventional peers, particularly in the period after the global financial crisis. We also document evidence showing that countries with a larger foreign Islamic bank presence tend to have deeper credit markets postcrisis. However, such advantages may often be outweighed by the costs associated with increased penetration by foreign conventional banks
Adoption of ZakaTech in the time of COVID-19: cross-country and gender differences
No full textDespite the significant growth in Islamic economies and the increasing number of Muslim youths inclining digital services, empirical-based research addressing the adoption of digital Islamic services is still limited. ZakaTech is a new phrase that has recently emerged as a modern term describing novel technologies adopted by zakat institutions; yet, it has been largely neglected in the literature. Therefore, this study aims to provide an integrated model that scrutinizes the determinants of acceptance and use of technology (UTAUT) of ZakaTech, combined with social cognitive theory (SCT), in the midst of the COVID-19 crisis where social distancing is the norm in conducting economic activities. Based on cross-national evidence from two Muslim-majority countries, a total of 1,006 valid responses were collected from zakat payer users in Saudi Arabia and Egypt using a Web-based survey. To validate the research model and draw significant insights, SmartPLS structural equation modeling was used. By analyzing both Saudi and Egyptian samples, the authors found that all UTAUT constructs are statistically significant, except for effort expectancy in Egypt. The effects of self-efficacy and social isolation on ZakaTech adoption are supported across both countries. Trust in technology reduces users' inherent risks and increases their likelihood of adopting ZakaTech services in Saudi Arabia, while this is not the case in Egypt. However, the study revealed that trust in electronic-zakat systems (EZSs) is a vital predictor for mitigating perceived risk among Egyptian users of ZakaTech, but it is not the case in Saudi Arabia. Moreover, significant gender differences were found between males and females in the adoption of such digital services in both countries, particularly regarding self-efficacy, trust in EZSs, social isolation and social influence
Sadaqah and waqf and their social impact (the case of Rida' al Walidain Organization/Sudan)
No full textThese are the slides presented by Associate Professor Dr. Magda Ismail Abdel Mohsin entitled "Sadaqah and waqf and their social impact (the case of Rida' al Walidain Organization/Sudan)" at the Final Meeting for the Comparative Study of Donation 2022, Tokyo, Japan
Weak and missing links of Islamic finance in Nigeria: a legal appraisal
No full textLaw and Shariah are crucial for the establishment and operation of Islamic finance. The interface of law and Shariah in Islamic finance dictates that both are required in Islamic finance regulations and governance. However, the fact that Shariah has generally been rendered subordinate (where it is recognised) to financial laws under common law legal system means that rules of Shariah are not, by default, applicable to Islamic finance. Such is the case particularly where the rules of Shariah are contrary to the common law, which is often the case, even in Shariah matters of Islamic finance. To this extent, the rules of Shariah have to be 'recognised' by the law otherwise applicable rules of common law would prevail. Thus, it becomes necessary to accord such recognition to Shariah rules in the conventional rule-making sense so that rules of Shariah would not be considered alien under the law of the land (Nigerian law). Accordingly, besides conferring validity on Shariah contracts and enabling enforcement of Shariah rules in Islamic finance transactions, a governance system established by law that encompasses Shariah is the only way of ensuring Islamic finance in Nigeria is truly Islamic in all its activities
The potential of Islamic crowdfunding to finance small construction projects in Malaysia
No full textOne of the most critical challenge faced by the Malaysian construction industry after the COVID-19 pandemic is the lack of financing options to finance the stranded construction projects. It is perceived that for small construction projects facing financing issues, crowdfunding could be an alternative financing option that could be explored. As such, the objectives of this study are to: examine the challenges faced in financing the small projects in Malaysian construction industry after COVID-19 pandemic; explore the possibility of using crowdfunding as an alternative financing mode for small projects in the Malaysian construction industry; and find out the challenges in implementing crowdfunding to finance small projects in the Malaysian construction industry. To achieve these objectives, the study adopts qualitative research methodology where secondary sources such as reports and journal articles published on the topic have been reviews and due to limited studies available specifically on crowdfunding and construction industry in Malaysia, semi-structured interviews have been conducted with experts to get their perspective on the subject. The findings of this study reveal that there is potential in utilizing crowdfunding in the construction industry in Malaysia to finance small projects. However, in order to adopt crowdfunding in the industry, there is need to create awareness about in among the stakeholders and the government also could provide some incentives for those who would like to choose this alternative mechanism to fund their projects. Further, it is recommended Master Builders Association Malaysia to take the initiative in this regard and enter into a collaboration with any licensed crowdfunding operator in Malaysia to commence the utilization of crowdfunding for construction projects. It is anticipated that the outcome of this research will assist the stakeholders of Malaysian construction industry to realise the significance of adopting crowdfunding to finance small projects in the construction industry and will encourage them to explore this option
Impact of non-intermediation activities of banks on economic growth and volatility: an evidence from OIC
No full textThis paper investigates the impact of non-intermediation activities of banks on economic growth and volatility of OIC. For the purpose, we utilize LSDVC estimation approach using the sample of Organization of Islamic Countries (OIC) member countries for the period of 2001-2013. We find non-intermediation income to be insignificant for both economic growth and volatility of OIC member countries in general though it reduces volatility of Gulf Cooperation Council (GCC) economies. Intermediation activities are found to be insignificantly related with the growth of OIC member countries, but on the other hand, they are found to reduce volatility in OIC member countries. Our results are robust across different specifications and estimators