INCEIF Knowledge Repository (INCEIF University)
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Takaful in Malaysia: in need of a balancing act
No full textThe general and family takaful sectors in Malaysia have showed positive growth. Based on the Malaysian Takaful Association (MTA) 2017 figures, the total combined assets of the industry has risen to MYR26.9 billion in 2016. Family takaful penetration declined slightly to 14.6% in 2016 compared to 14.71% in 2015
Governance framework in Islamic financial institutions
No full textThis chapter provides a discussion on a study that examines shariah governance practices in the Malaysian IFIs. It provides important insights into current and critical shariah governance issues that are faced by the Islamic finance industry worldwide. The chapter is divided into four sections. This first section provides some background on the Islamic finance industry. The second section reviews prior studies on shariah governance from different geographical areas: some details are given on methodology. Section three outlines research findings on various issues examined by the study such as the definition of shariah governance, the importance of the shariah governance framework and its functions and shariah committee competency. Section four concludes the chapter
Sustainable fiscal position for Malaysia: a proposal for reform
No full textMalaysia needs more fiscal space to manoeuver and safeguard growth under current challenging economic condition. The current persistent deficit and high leverage has raised concerns about the sustainability of Malaysia's fiscal position. Amid the above concerns, measures that have been taken by the Government thus far; mainly in the form of subsidy rationalization and the introduction of the Goods and Services Tax (GST); although required, have not been popular among the masses, and ineffective if the Government does not reign in its operating expenditure and borrowing. Increasing borrowing further via bond issuance or long-term government borrowing increases vulnerability, adds interest payment burden on future taxpayers and creates adverse distributional implications
Financial development, Islamic finance and shadow economy
No full textThe slides highlight the research questions on: 1) would the presence of Islamic finance be associated with lower shadow economy; 2) are Islamic finance and the financial development complementary in reducing the shadow economy sector
Can economic freedom help to alleviate poverty and reduce inequality? International evidence
No full textThe topic of poverty and inequality is still a central discussion among the economist. The current efforts in fighting poverty and inequality, which are considered unsuccessful, has motivated the economist and policy makers to find new ideas and strategies in combatting poverty and inequality. At the same time, the area of economic freedom is increasingly being discussed and linked with other major economic areas. This paper aims to examine the relationship between economic freedom and poverty as well as inequality ..
Resource rich Muslim countries and Islamic institutional reforms
No full textThe Organization of the Islamic Cooperation (OIC) countries have high economic potential in various fields, including productive land, mining, energy, agriculture, human resources and financial means. Collectively, the member countries of the OIC contribute over 9% of the world's total GDP1 with 22.8% of the world's population. Saudi Arabia and the United Arab Emirates alone, contribute about 17% of world oil production2. It could be expected that the wealth of natural resources would position the oil-producing OIC countries at the forefront of economic performance and growth. Yet, their economic performance often falls behind other countries. Income disparity in the OIC countries has remained constant over the last 30 years
Fair and equitable risk sharing in Islamic finance, a fiqhi perspective
No full textThis dissertation begins the discussion by referring to Verse 278 of Surat al-Baqarah to distinguish it from the ribawi system. Allah swt said: "Allah has permitted al-bay' and prohibited al-riba." The findings suggest that al-bay' in this verse refers to a system. Al-bay' as a mutual exchange in which one bundle of property rights is exchanged for another allows both parties to share production and transportation. Al-bay' or exchange has surrounding rules that construct the system. The outcome of this system can claim that it is through its rules which govern just exchange, distribution ..
A small island nation aspiring to spearhead Islamic finance in South Asia: size does not matter
No full textShare of Islamic banking in the national banking sector of the Maldives is reaching 5%. Despite this, the Maldives has not featured in ISFIRE previously. In fact, it has not been even ranked in Islamic Finance Country Index (IFCI), published by our yearbook, Global Islamic Finance Report (GIFR). This is an important exclusion, as the country has been involved in Islamic banking and finance for more than 14 years. This article should serve as a prelude to a country report that will be included in GIFR 2018, to be published in March 2018
Sukuk credit rating: determinants and wealth effect in the pre and post shariah governance reform
No full textThis research investigates the determinants of Malaysian Sukuk’ credit rating by studying firm financial characteristic, corporate governance attributes, macroeconomic factors, and Sukuk structures. The sukuk structures determinants examine during the pre- and post-Shariah governance reform period (SG2010) to ascertain the effectiveness of the governance reform. Lastly, this research investigates the wealth effects of change in Sukuk ratings (upgrading or downgrading). Both listed and unlisted firms are analysed, with total 328 sukuk issuances and 1110 sukuk rating announcements from 2009 to 2014. Ordered logit regression and generalized ordered logit regression are used to explain the impact of different determinants on sukuk credit rating. Event study methodology was applied to ascertain the wealth effect of 16 sukuk upgrade and 20 sukuk downgrade announcements. The results on determinants of sukuk credit ratings indicate that a positive sukuk credit rating is associated with financial information, governance attributes, and sukuk structure whilst the macroeconomic factors did not influence sukuk credit ratings. More precisely, firm size, profitability, and leverage had significant positive effect on sukuk credit rating for listed firms whilst only firm profitability had a positive effect on sukuk credit rating for unlisted firms
Islamic banking: business model, issues and challenges
No full textThe Islamic banking sector has ascended to be systematically important in several OIC countries particularly in Malaysia and the GCC. Globally, the sector has recorded a double digit growth rate far exceeding the growth rate of its conventional counterpart. Its sustained growth in the provision of financial services founded on Islamic principles even during crisis episodes, especially duting the recent global financial crisis, makes Islamic banking gain traction even in the non-Muslim world. Over recent years, it has made its presence in such countries as Switzerland, the UK, and the USA