INCEIF Knowledge Repository (INCEIF University)
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Saudi Arabia
No full textSaudi Arabia is one of the largest Islamic finance markets in the world and therefore holds a position of special importance in the study of Islamic finance as well as in the study of shari'ah governance in Islamic financial institutions (IFIs). Saudi Arabia is the largest Islamic banking market in the Gulf Cooperation Council (GCC) by market share; its Islamic banking assets accounted for 51.5 per cent of the domestic banking sector as at 2Q2017. Globally, Saudi Arabia ranked second after Iran among twelve jurisdictions where Islamic banking is systematically important. It accounted for 20.4 per cent of global Islamic banking assets in 2017 as compared to Iran, which accounted for 34.4 per cent. Even in the development of other segments of Islamic finance, Saudi Arabia holds a significant position. It ia active in the sukuk market, with its issuances - including those by the Islamic Development Bank (IsDB) - representing 33 per cent of total global issuances in 2017, thus ranking after Malaysia, which registered 38 per cent of total issuances. Saudi Arabia also accounted for 37 per cent of total Islamic funds in 2017, while 32 per cent of Islamic funds were domiciled in Malaysia. Moreover, it is the largest takaful market registering 38 per cent of global takaful contributions, followed by Iran (34 per cent), Malaysia (7 per cent) and the United Arab Emirates (6 per cent)
Performance of Shari'ah compliant and non-Shari'ah compliant listed firms: a case study of Malaysia
No full textShari'ah provides the basic tenets of the Islamic finance industry and advocates banks to share their profits and losses with investors. But what it means for a firm to be "Shari'ah-compliant" and what form of connections it can have, even in theory, to either the firm's value or profitability is still an untapped question. This study tries to answer this question. This study aims to find the impact of Shari'ah compliance on firm performance. The results obtained would be useful in helping investors, regulators, companies, government, academicians and practitioners in their decision-making process as to ensure better economic and business gains, both locally and globally. Panel data on 634 Shari'ah-compliant firms have been used in this study for the period of 2000-2014. The results indicate that Shari'ah compliance adds to the value of firms as firms perform transactions according to Shari'ah while avoiding non-permissible activities. This study adds value to the existing literature by showing the statistical results for the impact of Shari'ah compliance on the performance of the listed firms on Bursa Malaysia
Risk-sharing asset-based redistribution in public finance: a stock-flow consistent analysis
No full textIncreasing inequalities is one of the defining social, economic, and political challenges of the post-Global Financial Crisis (GFC) era. Apart from the negative social, public finance, and short-run growth effects of high inequality, the compelling evidence indicates that inequality is an important cause for the financial crises (Kumhof, Ranciere, and Winant 2015; Rajan 2010; de Haan and Sturm 2016; Turner 2016) and low long-term economic growth (World Economic Forum 2017; OECD 2015; IMF 2017). The inequality problem and its visible repercussions on economic growth and financial crises have spurred interest in the economics of inequality
Revisiting Islamic finance in the midst of COVID-19 pandemic: the case of Malaysia
No full textThe ongoing COVID-19 pandemic has shattered the 2020 global economic growth. Amidst lingering uncertainties of the effects of COVID-19, governments around the world have set out measures to assist its economies through economic stimulus packages and interest rate cut. At the international front, the World Bank and the International Monetary Fund (IMF) on 25 March 2020 issued a joint statement calling on all bilateral creditors to suspend debt payments from International Development Association (IDA) countries that request forbearance (IMF 2020). A similar call was made by central banks around the world. On 24 March 2020, Bank Negara Malaysia (BNM) ordered banking institutions to grant an automatic moratorium on all loan/financing repayments/payments, principal and interest (except for credit card balances) to all individuals and SME borrowers/customers for a period of six months from 1 April 2020 (BNM 2020)
Novel Coronavirus (COVID-19) from the Islamic perspective: implications and solutions
No full textThis paper contributes to the discussion forum of King Abdulaziz University for Islamic Economics on the economic, social and legal implications of the coronavirus. It aims to record some observations about the main paper of the forum and provide additional discussion of the economic, social and legal implications. In addition, it proposes solutions to these repercussions based on the principles of Islamic law and its overall objectives. The paper notes that efforts to monitor and analyze these repercussions were undoubtedly significant. However, some of them were characterized by a lack of precision and a piecemeal approach. It deals with some of the proposed solutions, especially on the economic side. The paper concludes that the proposed solutions for overcoming the repercussions of coronavirus according to the Islamic perspective must be based on the comprehensive objectives of the Shariah. Moreover, they must adopt an objective analysis of the facets of these repercussions according to the requirements of systematic research and analysis. This will ensure discipline in the analysis and comprehensiveness in the proposals
The role of Islamic finance as a catalyst to sustainable entrepreneurship
No full textFairer and healthier planet have been the main agenda of governments around the globe since the last few decades. Global crisis like climate change, global warming, poverty, hunger, inequality and many more, have raised the concern on our planet sustainability. As a result, the United Nations Summit in New York from 25 to 27 September 2015 unveils the 2030 Agenda for Sustainable Development with 17 Sustainable Development Goals (SDGs) and 169 targets which are integrated and indivisible. This agenda promotes transformation of thinking and approaches to be more inclusive, people-centred and to include sustainable development consideration where possible
Economic and social impacts of sovereign sukuk
No full textThis chapter explores the economic and social impacts of sovereign sukuk in Sudan and its unique challenges. The first of its kind, this research collected primary data from different groups of investors of Sudanese governmental sukuk. Adopting a qualitative approach (interview questions and open and closed-ended surveys), four sets of questions were distributed to four groups (individual investors, institutional investors, government officials, and academics). The survey found that despite sukuk's influence in activating the economy and financial markets, and encouraging savings awareness, the market in Sudan is facing many challenges. Accordingly, it is recommended that sukuk issuances should appeal to a wider audience including retail investors. The ensuing system, which could likewise be adopted by other countries, would generate more liquidity for development projects and may prove helpful for developed sukuk markets. Additionally, evolving capital markets would enhance the economic and social impact of governmental sukuk
The impact of COVID-19 on Islamic finance: in the midst of every crisis, lies great opportunity
No full textCOVID-19 is a pandemic that has overturned the world including the whole mankind. Never in the wildest dreams, one would have anticipated that a health crisis would lead to a multi-dimensional crisis where trade and transportation activities has been stopped; creating domino effect where many have become jobless overnight and is stuck at home unable to find alternatives to ease their personal situation. It is not only the individuals who were affected, but starting from small businesses to big giant corporations, COVID-19 has hit hard. As a result, there is no way individuals or private sector could survive unless and until the government saves them by providing a helping hand. The helping hand extended by the government costs a lot to them as there is no way to receive revenue during the time of unprecedented pandemic and it is being forced to find alternative source of funding to save themselves from getting into a fiscal deficit crisis
Zakat - the power of alleviating poverty
No full textThe recent statistical data on poverty shows that most of the people who live below the poverty line are found in Muslim countries. For example, the total population who are living below poverty line in Algeria is 25%, in Egypt 25.2%, in Bangladesh 26%, in Syria 35.2%, in Afghanistan 35.8%, in Pakistan 36.3%, in Nigeria 46%, in Sudan 46.5%, in Chad 46.7%, in Senegal 46.7%, in Yemen 54% and in Somalia 73%. Some scholars relate this poverty to the oppression, humiliation and bad policies which had been imposed in almost all Muslim countries during colonization and have continued up to the present time. Others relate this to the incompetence and the corruption on the part of their governments which led to the last Arab spring and what followed. We cannot deny the above-mentioned reasons as the catalyst for the spread of poverty in the Islamic world
Halal certification process for fisheries products in Maldives
No full textThis paper aims to examine existing halal certification regime in Maldives and address impediments therein that challenge and inhibit the growth of the country's halal industry in relation to fisheries products. This is qualitative research based on first-hand experiences of the authors in the halal certification process in the Maldives. Doctrinal methodology is used in the analysis of primary sources of data, including Maldivian laws and halal certification regulations to identify issues of practical relevance. This is complemented with content analysis of secondary data sourced from journal articles, books, reports and online databases that were examined in identifying hindrances and loopholes in the halal certification process. Fish is generally halal, but processed fisheries products cannot be so deemed when certain additives and enhancers are constituents therein. At the moment, Maldives halal certification pertains only to fisheries products. Against this backdrop, this research identifies knowledge gap, legal and governance constraints pertaining to capacity as impediments towards the halal certification of such products in the Maldives. Such concerns hinder the Maldives from tapping the socio-economic benefits of the halal certification of its fisheries products to the desired level in the development of its halal industry