INCEIF Knowledge Repository (INCEIF University)
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Integration of Islamic philanthropic economic services for alleviation of poverity: the case of affordable housing
No full textThis paper argues that the goal of poverty alleviation and a decent standard of living is not attainable in Muslim communities unless the economic and social services of the Islamic philanthropic institutes are integrated and a full-fledged collaboration would be resumed among the managing boards. The first part of the paper will examine why Muslims participate in altruistic giving and what are the alternative forms of contributions that are provided by Shariah of Islam. The second part will review the potential and actual contributions of the said Islamic benevolent giving for poverty eradication and well-being of low and vulnerable income families. The third and concluding part will discuss the conditions, methods and mechanism for integration and coordination among Islamic philanthropic institutes for provision of affordable housing
Analisis Syariah terhadap bitcoin
No full textPada Januari 2009, Satoshi Nakamoto telah menghasilkan mata wang kripto pertama yang dikenali sebagai bitcoin. Pada peringkat awalnya, mata wang kripto ini kurang mendapat sambutan meskipun teknologi yang mendasarinya amat berinovasi dan berdaya maju. Bitcoin (menggunakan simbol BTC) ini hanya mula menarik minat pengguna selepas nilainya melonjak sebanyak 600 peratus bagi BTC1 dalam masa kurang daripada setahun; iaitu BTC1 bersamaan dengan nilai USD1,000 pada 1 Januari 2017 kepada USD7,000 pada 3 November 2017. Kejayaan besar yang dicapai bitcoin ini telah menyumbang kepada penghasilan lebih banyak mata wang kripto seumpamanya dicipta dan dilancarkan. Sehingga 7 Januari 2018, lebih daripada 1,284 mata wang kripto telah dibangunkan dan bilangan ini dijangka akan terus meningkat
The rationale for the adoption of Islamic banking in Muslim-minority jurisdictions
No full textWhat differentiates Islamic banking from conventional banking is not simply the absence of interest payments. The fact that Islamic finance is interest-free does not mean that capital is costless. Unlike in the conventional system where the interest rate determines the cost of borrowed capital, which is pre-determined, the returns on funds provided by Islamic banks are not pre-determined as that would depend on the final outcomes. That said, one must hasten to add that there is much more to Islamic banking than the elimination of interest (riba) which is prohibited in Islam. Real sector connectivity and risk sharing principle represent the two important hallmarks of Islamic finance
COVID-19 pandemic: the role of Islamic finance
No full textCOVID-19 pandemic is a virus-related natural disaster. The COVID-19 pandemic was detected in 2019 in Wuhan in China and then spread to Hong Kong and then other countries, as it has considerably broader reach in terms of numbers of both countries and people affected than other virus-related disasters (Hassan et al. 2020). The possible reason for this global contagion is the increased integration of the global social and economic supply chain linkages so entrenched in the globalized ecosystem since 1980s. These previous virus-related pandemics including Severe Acute Respiratory Syndrome (SARS) (2002-03), Swine Flu (2009-10), Middle East Respiratory Syndrome (MERS) (2012-13), Ebola (2014-15), and Zika (2016) had a relatively high mortality but low infection rates compared to COVID-19 that is highly contagious but relatively less fatal but generating greater economic losses due to its prolonged persistence (Verikios et al., 2011). The prolonged nature of this pandemic has halted the global economy and caused substantial socio-economic adversities in all economies, albeit more in emerging and developing economies that have greater vulnerabilities of poor population, lack of financial resources and infrastructure to provide reasonable health services in normal times, let alone during pandemics. COVID-19 have beaten them all by affecting the economy and financial systems of almost 211 countries, with more than 50 million diagnosed and 1.2 million deaths at the point of writing this article (November 2020). This pandemic has contributed to mass economic destruction due to total and partial lockdowns of the economy, economic disruption through reduction of output or even closure of factories and increase in unemployment. Since the pandemic is global, the export-oriented economies suffer greatly as importing countries reduce their imports due to decrease in demand for goods and services
Developing regional healthcare facilities in Maldives through mudharabah perpetual sukuk
No full textThe purpose of this paper is to identify the underlying issues of healthcare system in Maldives in order to provide an understanding of the challenges facing healthcare providers in islands and atolls in a wider context. The paper scrutinizes the financial burden faced by the current healthcare system in Maldives. It also proposes shariah compliant mechanism that can be utilized to minimize financial burden in a long-term basis. It is hoped that the outcome of the research will assist the policymakers of Maldives to devise a shariah compliant mechanism to finance the development of atoll and island health facilities in a sustainable manner
Merton's equation and the quantum oscillator II: option pricing
No full textMerton has proposed a model for contingent claims on a firm as an option on the firms value, and is based on a generalization of the Black-Scholes stochastic equation (Merton, 1974). A special case of Merton's model is proposed - based on the quantum oscillator - for pricing options. Two cases of the option price are obtained: both these cases yield possible candidates for the generalization of the Black-Scholes option pricing formula. However, one of the proposed option prices does not obey the martingale condition and the other does not yield the correct discounting of future cash flows. For these reasons, the option prices do not obey put-call parity. The options can, however, be used to approximately price market traded options. The oscillator model for the option price has an extra parameter that is absent for the Black-Scholes case. Similar to the model studied by Baaquie et al. (2014), which that does not obey put-call parity, the option's price can be studied empirically and the extra parameter in the model could, in principal, generate implied volatility
Determinants of halal food export performance: the impact of halal certificate, OIC trade-cooperation, and the level of restriction on religion
No full textDespite the rapid growth of the halal economy during the last decades, the number of empirical researches related to the determinants of international halal trade is still limited. This study provides an initial attempt to investigate the factors that impact the value of halal trade flow. It focuses specifically on the halal F&B sector which is the biggest segment of the halal economy. To overcome the limitations of halal trade database, the study applied the WTO assumption when assigning HS codes on the specific trade concerns database (in the case of halal food and beverage) together with the Shariah principle of "presumption of permissibility" to acquire an approximate value of halal F&B trade between countries. The tested samples contain bilateral trade information of 59 countries (20 OIC members), selected according to their economic size and value of F&B exports. The estimation period covers the period from 2007 to 2016. The examination period is limited due to the availability of restriction on religion data which is one of the focused variables. In addition, the study did not exclude the world financial crisis period (2007-2008) because of the necessity in the nature of an F&B product that less elastic to the impact of the financial crisis
Oil and macro-financial linkages: evidence from the GCC countries
No full textWe assess potential roles of recent oil price swings in macro-financial linkages for the case of the Gulf Cooperation Council (GCC) countries using bank-level panel data from 2000-2016. Employing both dynamic panel and panel VAR modelling, we document evidence indicating significant implications of oil price changes on the GCC financial and real sectors and significant macro-financial linkages. The results are robust in suggesting favourable effects of positive oil price changes on bank profitability, credit growth and output growth. Likewise, we document robust evidence indicating immediate contraction in credit growth, deterioration in credit quality and decline in economic growth following negative oil price changes. We also note that the implications of oil price changes tend to be felt more strongly by small banks. Finally, we find substantial causal interactions between output growth and bank variables, notable of which are robust findings of significant responses of (i) credit growth and bank profitability to business cycle and (ii) business cycle to credit quality. With the documented roles of oil prices on macro-financial linkages, the oil market developments should be monitored closely and, in anticipation of oil price drops, attention should be given to maintaining lending activity as well as safeguarding banks' financial soundness such that the contraction of real activity can be contained
The relationship between financial inclusion and financial stability in Muslim countries in comparison with OECD countries: the role of institutions
No full textThe world is striving towards eradicating poverty via inclusive growth. Financial inclusion is seen as an important tool towards getting the unbanked, poor population into the financial system. Does greater financial inclusion create financial stability? Engaging the less financially capable people into the financial system is not a risk-free undertaking. Relaxation of rules and regulations which trigger sub-prime crisis in 2007-2008 has proven that more exposure to 'unfit' borrowers may lead to financial instability. Our study focuses on OIC countries for the impressive growth of lslamic finance during the past decade where 95% of the assets reside in the majority-Muslims countries yet their financial inclusion still within the lower range. We benchmark all the Research Questions against OECD countries which represent the advanced economies with higher level of financial development. Our first objective of the study is to identify the key determinants of financial inclusion. Following which, this study also analyses the impact of financial inclusion on financial stability. Succeeding the financial crisis in 2007-2008, the literature has been relating the important influence of institutional quality in maintaining financial stability. This brings us to our third objective of the study, which is to examine the role of institutional quality as a mediator for maintaining financial stability in both regions ..
Regtech for Islamic banking and finance: a new frontier for the modern-day regulatory framework development
No full textThis paper aims to exhibit how regtech can be utilized in developing supportive, yet prudent, policies to the Islamic banking and finance sector which are aligned with the objectives of the Shari'ah. Regtech has showcased to be a powerful enabler for both regulators and market participants to collect, analyze and improve compliance to be achieved in real-time at low costs. Apart from that, the ability for regtech and facilitating technologies to collect hard and soft data (e.g., financial information and behavioural data) provides an avenue for regulators to incorporate the ethos of Islamic finance into its policy development processes. To achieve the said objectives, this paper would also explore the possibility of incorporating the ethos proposed by Islamic finance, which places the emphasis of fairness, ethical business practices and acting in bonafide for all stakeholders (e.g., people, planet and profit)