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Islamic and Socially Responsible Indices: A Case Study of Dow Jones Islamic Market Sustainability Index
Full text linkEthical indices provide the investors with the opportunity to invest according to their choices and beliefs. They could either be socially responsible or morally responsible, Islamic indices belong to the second category. On the one hand, the compliance of socially responsible indices focuses on Corporate Social Responsibility (CSR) practices and Environmental, Social, and Governance (ESG) considerations, by applying some strategies such as: best practices, best in class or shareholders advocacy. On the other hand, Islamic indices apply both qualitative screens (by excluding some companies belonging to the prohibited sectors) and quantitative screens (by excluding companies based on their ratios of debt, receivables and cash). In addition to the divergences between socially responsible indices, and Islamic stock indices, many convergences exist, especially their ethical aspect. Dow Jones Islamic Market Sustainability Index (DJIMSI) » has been launched in January 2006, to be the first index in compliance with both Shariah and social investment guidelines. This category of indices attracted the interest of many researchers, and an important literature review has analysed them theoretically or empirically. In this article, the researcher analyzed Islamic and socially responsible indices taking into consideration their context, to compare the similarities and the differences between their screening criteria. In addition, it provides evidence from DJIMSI over the period 2014-2024. It was also found that DJIMSI was highly correlated to his conventional benchmark, showing the same return rates from September 2014 to December 2019. However, from January 2020 to September 2024, DJIMSI outperforms the conventional index
Islamic Green Contracts: Proposing an Islamic Financial Model to Support Agriculture Sector during Pandemic Covid-19 in Indonesia
Full text linkThe agriculture sector has shown numerous encouraging trends during a covid-19 outbreak in Indonesia. Despite its potential benefits, the application of Islamic finance products in this sector is limited. This research aims to propose a green Islamic financial model for supporting the agriculture sector. Library research and benchmark analysis are used to reveal the appropriate model. In the first step, the issues on financing in the agricultural sector will be overviewed. The second step will discuss the relevant theories to be adopted in this framework. The last part will propose the appropriate Islamic financial model. This research is limited to financing the crop sector of agriculture in Indonesia. This study finds that Islamic financing in the agricultural sector - is very diverse, such as Murabaha for the purchase of seeds or agricultural equipment, salam for sustainable farming, and istishna’ for land acquisition. The Islamic green financial model serves as guidance in synergizing strategy from various Islamic financial platforms to fulfill the needs of the agricultural sector and provides valuable analysis that combines classical theories and contemporary issues to draw the attention of Islamic financial practitioners to the fact that the needs of agriculture financial problems do not depend on single contract but needs to diversify the contract based on business process
The Role of Financial Inclusion in Income Inequality, Poverty Reduction & Economic Growth in Developing Countries
No full textThis study was conducted to examine the role of financial inclusion in economic growth, poverty, and income inequality in developing countries from 2010 to 2020. A panel data consisting of 101 countries for the period 2010 to 2020 was compiled from the World Development Indicators and the Global Financial Inclusion Database (Global Findex Database). The collected data was analyzed using the System Generalized Method of Moments. The study's findings indicate that financial inclusion has a positive impact on improving economic growth and reducing income inequality in developing countries. However, contrary to existing literature, this study found that financial inclusion has a direct relationship with poverty, which can be attributed to the economic peculiarities of developing countries.
Therefore, this study concludes that financial inclusion contributes to improved economic growth and reduced income inequality. Although it may not directly alleviate absolute poverty, it helps reduce poverty through the mechanisms of income inequality and economic growth. It is recommended that policymakers and regulators in respective countries focus on expanding the scope of financial inclusion to enhance economic growth and reduce income inequality
Assessing the Factors Influencing Waqf Contribution Among Public Employees in Gombe Metropolis, Nigeria
Full text linkWaqf is a significant socio-economic tool utilized by Muslim societies worldwide for the betterment of the public. Despite its recognized potential, empirical research on the factors influencing waqf contribution among Muslims in Nigeria, particularly in Gombe Metropolis, is limited. This study addresses this gap by examining the factors affecting public employees' participation in waqf initiatives. Data for this study is obtained through administration of structured questionnaire and analysed using Poisson and Tobit regression models. Our results indicate that waqf contribution among public employees is notably influenced by income level and trustworthiness. Additionally, the interaction between income level and factors like trustworthiness, religiosity, and altruism plays a significant role in enhancing employees' contributions to Waqf institutions. The policy implications suggest that stakeholders should encourage collaboration and integration of Waqf initiatives into public institutions, making it easier for employees to make regular contributions. There should also be specific awareness and educational programs designed to inform public employees about the significance and advantages of Waqf in promoting socio-economic development
Multidimensional analysis on Work-from-Home in COVID-19
Full text linkContemporary worldwide disaster COVID-19 encountered by people seemed to be widely spread like a fire in the jungle. This surge impacted the lives of many and even caused fatalities. Staying at home and not going outside is one of the hot topics of the moment. The population around the world found a major lapse when it was found that the epidemic of COVID-19 is not only infecting non-Muslims but also Muslims. Meanwhile, due to this worldwide disaster, countries facing the issue altered their work status to working from home after collecting readily available data from previous studies and recently published articles on several worldwide pandemics. This study discussed the effects of COVID-19 on the population, especially organizations with the practice of working from home. It also discussed the effectiveness of social distancing to avoid the spread of this virus. Moreover, this study discussed the benefits of working from home along with enlightening the Islamic perspectives to strengthen the study
Unemployment Rate and Zakat Collection: Empirical Evidence from Malaysia
Full text linkThe COVID-19 pandemic has forced Malaysian Economy into recession, whereby GDP plummeted to negative growth for the first time after the 1998 Asian Financial Crisis. Fiscal and monetary tools are inevitable during this crisis. Businesses are pushed to close shops when a series of Movement Control Orders (MCO) were implemented and causing massive layoffs, a red flag on the unemployment rate and the economy. Zakat, on the other hand, has become a poverty alleviation tool in the Islamic economy landscape and is particularly more relevant during an economic crisis. However, a lack of literature has discussed the impact of macroeconomic indicators on zakat. Therefore, this study is conducted to examine whether the unemployment rate explains the zakat collection trend. Time series data is utilized for the period between 2006 and 2020, and linear regression analysis is conducted. An interesting finding is that the Zakat collection trend by State Islamic Religious Council (SIRCs) and the unemployment rate movement are not statistically significant. This indicates that Zakat collection is not affected by high unemployment in the labor force market and remains strong even during an economic slump, enabled by more digitalization efforts and FinTech adoption
Implementation of Whistle-blowing System to Prevent Sharia Banking Crime in Indonesia
No full textThe research conducted is qualitative research, in which the researchers examine various sources pertaining to the whistle-blowing system in Islamic banking. The focus of this research is PT. Bank Syariah Indonesia (BSI), one of the largest Islamic banks in Indonesia that aims to become one of the top ten Islamic banks worldwide within the next five years. The purpose of this study is to gain understanding and insight into how the whistle-blowing system at BSI effectively controls fraud and crime within the Indonesian banking sector. According to a survey conducted by The Association of Certified Fraud Examiners (ACFE), banking fraud in Indonesia is reported to be at a staggering 41% when compared to other sectors. This finding highlights the importance of this research for the government, stakeholders, and banking industry participants. In addition to utilizing qualitative methods, this research incorporates an analysis of the BSI website and draws support from various sources related to the whistle-blowing system in Islamic banking. It is hoped that future research will continue to examine the implications of whistle-blowing systems in preventing fraud within the banking sector, particularly within Islamic banking, not only in Indonesia but also globally.
Islamic Fintech in Nigeria: Advancements, Compliance, and Future Prospects
Full text linkThis paper examines African fintech as one of the first fronts at which Islamic principles have intruded into Western finance, representing a significant step forward from an interactive financial paradigm. Islamic fintech is in accordance with Muslim teachings and has great potential for developing Nigeria's economic future. In fact, with such a large number of Muslims in this country it is not long before they get used to something like openness and transparency brought into Islamic Sharia on matters having concern with ethics. In the past five years, Islamic fintech grew even more rapidly than overall fintech. Its capability to make room for Muslim and non-Muslim victims of the pandemic reflects its spirit, vitality. Islamic fintech uses standards such as profit and loss sharing, asset-backed financing or banning interest (riba). These may be a new solution to the existing issues with transforming finance. The conclusion of the paper: There is a bright future for Islamic fintech. Not only does it benefit consumers, but its role as an exceptionally effective financial inclusion tool may even be greater than that of the profit-driven banking entities worked in before
Enhancement of Financial Inclusion through Islamic Fintech with Value-Based intermediation, a proposed second phase for the Islamic Banking industry
Full text linkNowadays, almost every bank is trying to come up with cutting-edge technology products and services. It is the trend of the market and need of the hour too. Through these products and services, Islamic Banks can retain their existing customers and also can add new customers, which will enable them to achieve their financial inclusion plan. Ultimately Islamic banks will achieve greater revenue by adding innovative digital products and services. Covid19 compelled the financial sector to develop innovative technology-based products in order to avoid in-person interactions. Financial institutions can achieve their goal by protecting both their employees and their customers by adhering to the standard operating procedures issued by the relevant Islamic banks. There are people in a society who have relationships with financial institutions, but there are also people who have no relationships with any financial institutions. Developing emerging economies are frequently eager to bring their unbanked citizens into the banking and financial sectors, believing that it will help them improve their social and economic lives. Financial inclusion is also used to alleviate poverty. The study's focus is on financial inclusion through Fintech and how to use Technology in Islamic Finance to improve financial inclusion through value-added propositions. This is a modern trend in the financial sector in which every financial institution wants to provide cutting-edge technology services to customers while also increasing revenue and fee-based income
Cash Waqf for Public Health Expenditure
No full textRecently, the COVID-19 pandemic and economic crisis have imposed constraints on government spending and increased borrowing to redevelop the economy. Thus, there is a need for alternative funding sources to ease the government's financial burden. Cash waqf has the potential to finance public health sector expenditures. Additionally, giving behavior plays a significant role in establishing cash waqf funds and ensuring the sustainability of waqf institutions. This paper examines the views of the public, specifically Muslims in the Klang Valley, Malaysia, regarding cash waqf and their willingness to contribute to it as an alternative financing method for public healthcare expenditures. The research framework combines variables from the Theory of Planned Behavior (TPB) and additional variables such as attitude, perceived behavioral control, religiosity, and trust in waqf institutions. The study finds that Muslims in the Klang Valley are aware of and willing to contribute to cash waqf for public health expenditure, especially during the COVID-19 pandemic. The study further reveals that attitude and perceived behavioral control are significant factors influencing their intention to contribute. These findings can encourage relevant authorities to consider cash waqf as an alternative financing source for public health expenditures, benefiting both Muslims and non-Muslims