INCEIF Knowledge Repository (INCEIF University)
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Takaful (Islamic insurance), retakaful, and microtakaful
No full textTakaful, or mutual assistance, is the Islamic counterpart of conventional insurance. The word takaful is derived from an Arabic word kafalah, which means to guarantee. A group of participants agree to support one another jointly for the losses arising from specified risks. They contribute to a fund, and are compensated or reimbursed from that fund in the event of certain risks. The scheme is managed on the participants' behalf by a takaful operator. It is similar to a mutual insurance concept, but it complies with Shariah and is based on concepts of mutual solidarity and risk sharing
Islamic finance consultancy: an Eaglemont career book for students
No full textThis Eaglemont Career Book on Islamic finance consultancy aims to paint an accurate and in-depth picture of the good, the bad and the downright challenging aspects of the work to give the reader the best possible picture of what lies ahead if they decide to pursue a career path that takes them towards this destination. The intention throughout the book is to answer the same questions that jobseekers and students might ask themselves
Financial retakaful: managing your capital efficiently
No full textThe slides highlight on the financial reinsurance for life insurers, financial retakaful, and financial models through financial retakaful lenses
Contemporary practices of musharakah in financial transactions
No full textMusharakah, which is translated as 'joint venture or partnership' or 'profit and loss sharing contract' is regarded as an ideal financing contract in Islamic finance. Musharakah has been applied to Islamic banking and Islamic capital market across the world and it is also proposed as one of alternative model in takaful business. Musharakah contract is also combined with other contracts and interesting products such as Musharakah Mutanaqisa has been developed. However, there are considerations concerning the principles of Shariah. This paper aims to discuss these matters and offer recommendations in order for Musharakah to be more widely accepted and adopted by the Muslim communities across the world. It is anticipated further research can be conducted to find out the implication of applying AAOIFI resolution on Musharakah or equity based products to find out the effect of it on different jurisdictions with different domestic laws and rules
Impact of political connections and Shari'ah compliance on firms' profitability - a case study of Malaysia
No full textConnections between politicians and business houses are not uncommon. Literature shows that firms tends to connect with politicians/political parties to get easy access to credit, to have lax regulatory oversight, to have preferential treatment for the government contracts and for having access to insider information. On the other hand a Shari'ah compliant firm is considered to perform ethically and justly due to adherence to the rules and regulations prescribed by Shari'ah. In recent years the research on political connections of Malaysian listed firms is increased. But the comparison of politically connected listed firms and Shari'ah compliant listed firms in Malaysia is lacking. Malaysia is a leading country in Islamic finance hence; this paper analyzes the impact of political connections and Shari'ah compliance on the profitability of the listed firms' in Malaysia for the period of 2000-2014. The paper used regression technique for the analysis. The result of the study shows that Shari'ah compliant firms perform better than the politically connected firms. Shari'ah compliance has positive and significant impact on the profitability of the firm whereas political connections have negative and significant impact on the profitability of the firm in the case of Malaysia
Shari'ah screening, market risk and contagion: a multi-country analysis
No full textThis study investigates the relationship and shock transmission between firm leverage and systematic risk within the Shari'ah stock screening rules among seven European countries with a sample of 689 firms for the period from 2008 Q2 to 2013 Q1. Due to the fact that high leverage augments systematic risk and accentuates the firm's vulnerability to shocks,debt screening is used to examine the sampled portfolios. As it imposes limits on debt,we examined the impact of such an ethical screening and a risk moderating principle on stock volatility, susceptibility to contagion and the implications for portfolio diversification.Using a vector auto regressive dynamic panel of multi-country framework, systematic risk is analysed by taking into account firm characteristics, country effects, and the heterogeneity across firms, thereby ensuring the robustness of results. Our findings suggest that the systematic risk changes with changes in the capital structure; the Shari'ah-compliant stocks are shown in most cases to carry less risk than conventional stock, while they do not necessarily out-perform in terms of return; during the global financial crisis. We conclude that during the global financial crisis, Islamic compliant stocks demonstrated lower values of systematic risk in the case of "Low Debt" portfolios when comparison to "High Debt" portfolios
Good governance and crime rates in Malaysia
No full textThe purpose of this paper is to relate the quality of governance with crime in Malaysia. The study also identifies the best good governance tool to fight against crime in Malaysia. The study uses time-series data on crime rates and six measures of governance: voice and accountability, political stability, government effectiveness, regulatory quality, rule of law and control of corruption. In this study the authors employed the popular autoregressive distributed lagged modeling approach to estimate the long-run model of crime and governance. The authors test the hypothesis that good governance lowers crime rates (total crime, violent and property crimes). The results suggest a negative relationship between crime rates and good governance in Malaysia. This suggests that good governance reduces crime rates in Malaysia. The limitations of this study is the short time-series used in the analysis which is from 1996 to 2009. This study provides evidence that the practice of good governance, for example, lower corruption, good policing and judicial system can mitigate crime in Malaysia. The implementation of good governance will protect property right of individuals, business sector and the society as a whole, and this will enhance prosperity of a nation. This study provide the first empirical evidence that linking between crime and good governance in Malaysia
Islamic wealth planning
No full textThe slides "Islamic wealth planning, Islamic microfinance, and the infrastructure of sukuk" presented by Prof. Datuk Dr. Syed Othman Alhabshi at the Executive Programme for Government of British Virgin Island, British Virgin Island
Surplus distribution in current takaful operations: a critical Shari'ah perspective
No full textThis research addresses a number of issues related to surplus distribution in takaful. The first section is devoted to revisiting the main financial concepts related to the surplus such as underwriting surplus and profit. Modes of distribution such as pro-rata and offsetting will also be discussed in the light of equity principle advocated by the Shari'ah. The second section deals with the major juristic views and doctrines delineated against and in favour of surplus distribution. Legal doctrines such as ownership or otherwise surplus after donation will be meticulously discussed and reviewed in light of the current practices of takaful operators. The last section deals with a general outline of Shari'ah parameters in relation to equitable surplus distribution, followed by scrutiny of surplus distribution practices of a number of takaful operators both in Malaysia and the Gulf States. This article argues that, while it is strongly recommended to redistribute the surplus to the participants only, there are exceptional reasons supported by Shari'ah evidence allowing takaful operators to share in the surplus
Islamic social philanthropy
No full textWhen the Prophet (saw) first received the revelation, he was so scared and went back to his beloved wife Khadijah to cover him up. Khadijah comforted him by saying that Allah would not for sake you because you help the poor, you love orphans, you helped people, etc. Early converts were mostly the poor and slaves. Only a few were wealthy individuals such as Abu Bakr As-Siddiq and Uthman Ibn Affan (ra)