INCEIF Knowledge Repository (INCEIF University)
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The application of blockchain technology in crowdfunding: towards financial inclusion via technology
No full textThe emergence of innovative digital financial technologies, namely blockchain and crowdfunding, indicates new ways to reach the poor and economically vulnerable groups. This paper contributes to the emerging literature on financial technology by presenting the case of crowdfunding in financial inclusion. The rationale behind this inquiry is to demonstrate the relevance of crowdfunding to financial inclusion, and how might blockchain technology fuel the development of crowdfunding. This paper also constitutes one of the first attempts to analyse crowdfunding in Malaysia and Shariah-compliant crowdfunding. In this paper, a desk research is conducted where journal articles, books, magazines, newspapers, industry reports published on the subject matter are reviewed critically. To analyse the development of crowdfunding in Malaysia, 6 crowdfunding platforms are examined. The outcome of this research suggests that crowdfunding is a viable means to promote financial inclusion, and blockchain technology could help mitigate the current issues faced by platform operators
Has the adoption of Islamic banking model based on conventional bank values made Islamic banks less stable? A comparison with cooperative banks in Europe during the 2008 crisis
No full textDespite the increase in studies on Islamic banks, there is a number of issues. Firstly, the comparison is with commercial banks although in reality, Islamic banks have strayed from their theoretical foundations of mutuality and profit-sharing. A more apt comparison is thus with cooperative banks, which share similar theoretical foundations with Islamic banks. Secondly, this comparison may unlock the stability puzzle for Islamic banks. While theoretically they are argued to be stabilising, empirically, the evidence is mixed. Several works concur with the notion of superior stability in Islamic compared to conventional banks but of late, there are increasing findings to the contrary. This study thus seeks to first ascertain whether in mimicking conventional banks, Islamic banks have become just as unstable, or worse, during the 2008 financial crisis and the 'new normal' years between 2010 and 2015 ..
Islamic finance: grasping with price and profit theory
No full textThe Halal industry comprising of bank and non-banking firms is hardly visible in theoretical rigor except for the Shariah rules it promotes to exert religious labelling. While Islamic banks pay greater attention the elimination of riba, gambling and ambiguities in financing contracts to claim Shariah legitimacy, non-banking companies are more concerned about halal slaughtering, avoidance of pork in the production process, prevention of food adulteration, promoting hygiene in food preparation and many more
A multi-model approach to identifying determinants of financial distress in Malaysia
No full textFinancially distressed companies always bring about enormous financial and economic losses to many stakeholders, such as management, stockholders, employees and customers together with a substantial social and economic cost to the country. Therefore, a distress prediction model that can predict the event and identify the determinants in advance would serve to reduce such losses by providing a pre-warning signal to stakeholders. Preventive actions can then be taken by stakeholders if they can obtain early warning signal of probable failure that will lead to the efficient allocation of available resources to reduce losses. For these reasons, identifying the financial distress determinants that can give accurate prediction has become an essential aspect of finance. Our study will try to identify the financial distress determinants in Malaysia by applying logistic regression analysis (LRA) method together with multivariate discriminant analysis (MDA) and artificial intelligence algorithm (ANN) for robustness. Twenty-one independent variables were selected in our study that can be categorised as financial ratio variables, market variables and non-financial data variables. Data samples were derived from 158 Malaysian public listed companies and the assessment period was from the year 2001 until 2012 ..
Bonds with index-linked stochastic coupons in quantum finance
No full textAn index-linked coupon bond is defined that pays coupons whose values are stochastic, depending on a market defined index. This is an asset class distinct from the existing coupon bonds. The index-linked coupon bond is an example of a sukuk, which is an instrument that implements one of the cornerstones of Islamic finance (Askari et al., 2012): that an investor must share in the risk of the issuer in order to earn profits from the investment. The index-linked coupon bond is defined using the mathematical framework of quantum finance (Baaquie, 2004, 2010). The coupons are stochastic, with the quantum of coupon payments depending on a publicly traded index that is chosen to reflect the primary drivers of the revenues of the issuer of the bond. The index ensures there is information symmetry; regarding the quantum of coupon being paid; between issuer and investor. The dependence of the coupon on the index is designed so that the variation of the index mirrors the changing fortunes of the issuer, with the coupon's quantum increasing for increasing values of the index and conversely, decreasing with a fall of the index
Women on Boards recognizes female empowerment in Islamic finance industry
No full textWomen on Boards (WOB) has recognized the outstanding services provided by individuals in female empowerment in the Islamic finance industry by conferring them a special award of recognition at a ceremony held at Hotel Jen on the 30th April 2018. The chief guest of the ceremony was Minister of Home Affairs Azleen Ahmed. This is the first time in the history of the Maldives a dedicated set of awards was given to recognize female empowerment in the Islamic finance industry at a global event as it is rare to find an award in the Islamic finance space specially dedicated to female empowerment
Case study of Koperasi Sahabat Amanah Ikhtiar Malaysia Berhad
No full textAmanah Ikhtiar Malaysia or history of AIM is closely linked to the establishment of Grameen Bank. It all began when Prof. Dr Muhammad Yunus, Economic lecturer at Chittagong University of Bangladesh conducted a study in 1976 with a sample of poor community that rarely engage in the banking world. From his study, these poor people are not able to improve their standard of living due to lack of capital. Therefore, Prof. Yunus suggests that capital injection is a basic human right and shall be given to the poor people in helping them to improve their social and economic welfares ..
Capital flows and regulatory arbitrage
No full textEvents earlier in the year in Australia show the extent to which cross-border capital flows can arbitrage regulatory hurdles. It appears that in an effort to rein in a burgeoning housing bubble, the Australian central bank, the Reserve Bank of Australia (RBA) has placed caps on bank lending to real estate developers. The policy, aimed largely at curbing purchases of Australian homes by foreigners through domestic borrowing, initially was effective. In addition to foreign speculators, domestic housing developers too were hit hard. Such regulation would have essentially taken the wind out of a domestic housing bubble, had it not been for foreign hedge funds and private equity. Given free capital flows, these foreign entities, which are really shadow banks, stepped in to provide the needed funding, obviously at higher interest rates. At that point of time, the foreign lenders appeared to be making huge profits from the large interest spreads. For both the foreign lenders and the foreign speculators of Australian property, the ability to sidestep the regulation appeared to be a win-win
Insolvency law: the humane approach of classical Islamic jurisprudence
No full textThe Islamic finance industry continues to be characterized by uncertainty over how it will deal with individual as well as corporate insolvency. As a result, interest in this area of law is growing. To this end, Islamic insolvency law is emerging as an independent field of study. Being a legal exploratory study using the library method, this study aims to highlight some of the humane principles that should inform a framework for the industry. The author made an attempt to trace back these humane principles to the primary and secondary sources of Islamic jurisprudence. In addition, the author has attempted to focus on the specific legal differences between Islamic and civil law in terms of insolvency. The outcome of this study emphasizes the need for policy makers to focus on both the substantive, and procedural rules of Islamic Banking and Finance. It further highlights that Islamic financial instruments need to properly be geared towards dealing with default or default-like situations and that community resources need to be channeled towards the development of dispute resolution mechanisms
Musharakah mutanaqisah home financing and its economic implications
No full textFollowing the U.S. Subprime Crises of 2007-08, many developed countries went into deep recession. In the literature, there are many reasons provided as probable causes of the crisis. However, it is undeniable that the flaws of the conventional financial system and home financing methods are among the important sources of the crisis. In this thesis, we argue that the damage caused by the Subprime crisis may have been avoided to a considerable extent if true profit and loss sharing (PLS) based method of financing has been applied. In that regards, we suggest an improved version of Islamic home financing called the enhanced musharakah mutanaqisah (EMM)