Minhaj University OJS
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Insolvency Risks in Islamic Banks: Lessons from Comparative Case Studies of Failed Institutions
Full text linkThis study investigates the causes of insolvency in Islamic banks (IBs) through a qualitative multiple-case analysis of failed Islamic financial institutions (IFIs) in Turkey, Jordan, and South Africa. The selected cases İhlas Finans (IF), Islamic Bank Limited (IBL), Islamic Investment House (IIH), and Islamic National Bank (INB) are examined to identify key governance, regulatory, and Shariah-related weaknesses that contributed to their collapse. Data were collected from secondary sources, including regulatory reports, court records, and academic studies, and analyzed using thematic and comparative approaches. The findings reveal that inadequate governance, absence of comprehensive insolvency and recovery frameworks, and weak Shariah governance were central causes of institutional failure. Conflicts between national laws and Shariah principles further compounded the insolvency risks. The study contributes to the literature by providing a cross-jurisdictional understanding of insolvency risks in Islamic banking and proposing the need for structured resolution mechanisms aligned with Shariah principles. Policy recommendations are offered to enhance regulatory supervision, strengthen Shariah governance, and improve crisis preparedness within the Islamic banking sector
Resilience of Islamic Banking in Indonesia: A VECM Analysis of Macroeconomic Shocks and Medium-Term Recovery Dynamics
Full text linkThe failure of conventional economics during the 2007/2008 crisis spurred the emergence of Islamic economic alternatives this day. Comparative studies have assessed its resilience. This research comprehensively examines Islamic banking's resilience to economic crises, addressing gaps in previous studies that focused only on specific crisis periods. Monthly data from 2015-2023 from SPS- OJK, BPS, and Monetary Statistics-BI were analyzed using VECM methods. Real GDP was found to have the most significant negative impact on various Indonesian Islamic banking performance variables. Islamic banks can, therefore, utilize an Early Warning System for real GDP. The variables affected by macroeconomic shocks show short- to medium-term dynamics, recovering from periods 3-5, and stabilizing performance. This study fills previous research gaps that indicated instability in Islamic banking by considering only short post-crisis periods. In the medium term, Islamic banking in Indonesia has proven effective in recovering from crises, as shown by the analysis of recurring economic crises.
© 2025 The Author(s). Licensed under CC BY-NC 4.0
Zakat and Waqf as an Islamic Microfinance Tool to Uplift Social and Economic Life of the People in Tajikistan
Full text linkZakat and waqf as an Islamic tool for Islamic microfinance has become increasingly relevant. Both these practices were historically institutionalized in Muslim communities since the rule of the Prophet (PBUH) himself. These practices develop a culture of shared equality within the community, eventually improving social ties and cohesion as well. The benefit of zakat and waqf as an Islamic microfinance tool is that it not only generates funds for the poor, but also creates sustainable solutions by creating sources of employment and education that effectively treats the problem of poverty. Tajikistan is one of the Muslim countries which is suffering from poverty and huge income gap between poor and rich. It is imperative to bring into consideration the development of constructive policies like zakat and waqf being an Islamic microfinance tool that will not only mitigate the country’s vulnerabilities to external factors but also contribute in the economic growth and development of the country. The paper not only explores the effectiveness of zakat and waqf as an Islamic microfinance tool but also assesses its relevance in the context of Tajikistan in uplifting the social and economic life of the people in the country. This implies that Tajikistan is yet to come up with a tool for poverty alleviation that is safeguarded from these external economic and social factors. The paper will also provide recommendations regarding policy adaptation and how the funds can be utilized for upliftment of poor through multichannel programs.
© 2025 The Author(s). Licensed under CC BY-NC 4.0
The Islamic Country Nigeria Borrows on Riba: Introducing Esham as an Instrument of Borrowing
Full text linkThe Nigerian government continues to adopt conventional financial instruments of government borrowing. The use of these instruments both in the past and in the present has not yielded the desired results as it continues to wallow in debt with little or no development to show for it. This borrowing escapade by the government would not have been problematic if Nigeria were a religiously neutral state. However, Nigeria is home to over a hundred million Muslims and her constitution guarantees freedom of religion whilst she regularly sponsors pilgrimages to the haramain and sharafain every year. It is therefore visible to the blind and audible to the deaf that Nigeria is an Islamic country and therefore should use Islamic instruments of borrowing. The objective of this paper is to highlight the abhorrent use of non-Islamic means of borrowing by the Nigerian Government and to introduce a relatively new instrument of borrowing for use within the Nigerian state. The benefit of using an Islamic means of borrowing therefore becomes evident in that, the overarching maqsad of the shari’ah being obedience to Allah, blessings from the heavens and the earth will naturally trickle in (The Qur’an, 7: 96) This is not withstanding the concomitant pragmatic and pecuniary benefits associated with non-usurious transactions. Methodically, the paper adopts legal reasoning, scriptural reasoning, constitutional analysis and public evidence
Creation of Islamic Brand Equity: A Study of Malaysia
Full text linkThe study explores the relationship between Islamic Branding and Brand Resonance of an Islamic Brand. This study empirically examines the influence of Islamic Branding Antecedents, i.e., Religiosity, Islamic Brand Knowledge, and Islamic Corporate Social Responsibility (ICSR) on Islamic Branding and its subsequent impact on the Islamic Brand Resonance. The research framework is based on the Customer-Based Brand Equity (C.B.B.E) pyramid and the Theory of Self-Congruity. The empirical study is conducted on the Muslim consumers in Malaysia. Survey research was conducted on a sample of 326 Muslim consumers from the cities of Kuala Lumpur, George Town, and Johor Baru. The results reveal a significant influence of Islamic Branding on the Brand Resonance among Muslim consumers in Malaysia. Furthermore, Religiosity, Brand Knowledge, and ICSR positively influence the perceptions of Malaysian Muslim consumers regarding Islamic Branding. Currently, research in the area of Islamic Branding is limited.
© 2025 The Author(s). Licensed under CC BY-NC 4.0
Bridging Equity and Excellence: A Comparative Study of Waqf and Performance-Based Research Funding in Academic Library Finance
Full text linkAcademic libraries are facing escalating pressures from reduced public funding, rising operational costs, and the growing need for digital innovation. As institutions seek resilient financial models, different countries have adopted varied funding mechanisms shaped by local contexts. This study offers a comparative analysis of two contrasting approaches: Malaysia’s Waqf-based model, rooted in ethical community contributions, and New Zealand’s Performance-Based Research Fund (PBRF), driven by measurable academic outputs. Using a qualitative multi-case study involving two Malaysian universities and one from New Zealand, data were gathered through interviews and document analysis. The findings indicate that Waqf provides inclusive, socially anchored support for targeted projects such as infrastructure upgrades and digital resources. However, its scalability remains limited due to rigid governance structures and its positioning as a complementary funding mechanism rather than a primary institutional source. In contrast, the PBRF enhances institutional research performance and international visibility but tends to deprioritize community engagement and equitable access. This study contributes to the discourse on sustainable library funding by proposing a hybrid framework that balances the ethical stewardship of Waqf with the structured accountability of PBRF. The findings offer practical implications for higher education leaders and policymakers navigating post-pandemic academic finance reforms, particularly in aligning institutional performance with broader societal responsibilities.
© 2025 The Author(s). Licensed under CC BY-NC 4.0
The Role of Islamic Finance in Enhancing Fiscal Space and Debt Sustainability: Evidence from D8 Countries with a Moderating Role of Institutional Quality
Full text linkThis study investigates the role of Islamic finance in enhancing fiscal space and debt sustainability in D-8 countries, with a special focus on the moderating effect of institutional quality. Using the Driscoll-Kray estimator, the research analyzes key Islamic finance instruments, Sukuk, Takaful, and Islamic banking assets, along with their interactions with institutional quality. The findings reveal that Sukuk alone has a weak and statistically insignificant impact on both fiscal space and debt sustainability. However, when combined with higher institutional quality, Sukuk’s positive effect on fiscal space becomes significant, highlighting the importance of strong governance. Takaful shows a marginally positive influence on fiscal space, but no significant effect on debt sustainability. Nevertheless, its effectiveness improves when institutional quality is high, demonstrating that stronger institutions can enhance Takaful’s role in fiscal development. In contrast, Islamic banking assets negatively and significantly affect both fiscal space and debt sustainability. This negative impact is intensified by higher institutional quality, suggesting that unchecked growth of Islamic banking assets could undermine fiscal stability, especially in well-governed environments. The study also finds that economic openness significantly reduces both fiscal space and debt sustainability, while institutional quality plays a vital role in strengthening debt sustainability. Overall, the results underscore the critical moderating role of institutional quality in amplifying or mitigating the effects of Islamic finance. The study concludes that D-8 countries should focus on enhancing institutional quality to fully leverage the potential of Islamic finance, particularly Sukuk, for sustainable fiscal growth and improved debt management.
© 2025 The Author(s). Licensed under CC BY-NC 4.0
A Thematic Analysis of Fatwas on Bitcoin and Cryptocurrency
Full text linkThe global expansion of Bitcoin and cryptocurrencies brings unanswered questions of the Islamic finance that are legal in nature. The existing research is divided into two camps, namely, total prohibition, or conditional acceptance. It is a thematic analysis of 32 public fatwas (2014-2024) of 12 Islamic jurisdictions in the first systematic analysis. The application of cryptocurrencies and their Shariah acceptability are analyzed. This paper applies the six-stage model offered by Braun and Clarke and it establishes five key jurist themes. The former theme is the ambiguity of the issue of whether cryptocurrencies are to be treated as mal (property) or thamaniyyah (money). The second theme talks about gharar, i.e., excessive uncertainty that is caused by volatility, lack of transparency and regulatory instability. The third theme concerns speculation by trading which is similar to maysir (gambling). The fourth theme is about mafsadah, which is harm to society and includes illicit use, environmental costs and inequality. Lastly, the fifth theme is on interpretations and deviations which form conditional permissibility in the presence of regulation and transparency, which minimises the risks of jurisprudence. The findings indicate that juristic disagreement is not an issue of inconsistency but the use of the various kinds of reasoning on novel financial technologies. The study paves the way in the study of Islamic-finance, by transforming the disjointed textual load of fatwa into a juristic map, which articulates the reasons behind the variance of rulings, as opposed to how they vary. This paper can be used by Shariah boards, regulators, and developers of digital assets to take action on implementing maqasid al-Shari, in the regulation of digital assets
Advancing Sustainable Livelihoods and Societal Development: An Integrated Approach for Islamic Charity Organizations
Full text linkIslam provides different ways to fulfil the objectives of eradicating poverty and establishing social and economic justice. Some of the best-known tools to raise funds for poverty reduction and social and economic justice in Muslim communities are obligatory or voluntary, such as Zakat, Waqf, Sadaqah, Qard al-Hassan, etc. These funds are mostly collected by Islamic charity organizations (NGOs) to be distributed or spent on various causes. For example, funds are commonly employed through Islamic social finance in Muslim communities for a variety of reasons, including to reduce the vulnerability of the poor, promote sustainable livelihoods, achieve the common good, mitigate humanitarian crises, etc. The paper discusses these tools of Islamic social financing and the employment of funds through Islamic charity organizations for the common good. The paper also discusses the compatibility of the proposed structure and functioning of Islamic charity organizations to utilize the funds in a more efficient way to achieve a suitable livelihood and development in society
Human Capital Development for Takaful Sector in Malaysia: Addressing the New Challenges
No full textA tremendous growth has been witnessed by the Islamic Finance industry worldwide over the last decade, however, Takaful sector still requires attention for increasing its market share and for strengthening its position in the industry over its conventional counterparts. The human capital pool quality is crucial for Takaful sector performance. This study investigates the human capital role in the organizational performance of the Takaful sector of Malaysia through the mediating role of social capital under the theoretical foundation of resource-based theory and equity theory. The primary data is collected through a structured questionnaire from the 350 employees working in the Takaful sector in Malaysia using a judgement sampling technique. Structural Equation Modelling (SEM) is applied using Smart PLS software. The study finds that human capital factors has a statistically significant impact on the Takaful companies' performance. Furthermore, the study confirms that social capital as a mediator only mediates the relationship between skills and knowledge and Takaful companies' performance. The proposed framework provides a major contribution towards present practices and challenges in the human and social capital field which leads to the Takaful companies’ performance in Malaysia. This study is helpful to policy maker, practitioner and researcher as it will be useful for revamping human capital development strategies in promoting the market