INCEIF University Journals
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Attitude, Subjective Norm, Perceived Behavioural Control and Digital Ṣukūk Adoption in Nigeria: The Mediating Effect of Awareness
Get PDFPurpose ‒ There is an increasing number of digital ṣukūk issuances worldwide but the level of awareness and adoption in Nigeria is very low. This research examines the mediating effect of awareness on the relationship between attitude, subjective norm, perceived behavioural control and digital ṣukūk adoption in Nigeria.
Design/Methodology/Approach ‒ The data for the research were collected from 750 questionnaires that were distributed using the systematic sampling technique to operators of the capital market and individuals in Nigeria, out of which 410 were retained. The partial least squares structural equation modelling (PLS–SEM) algorithm was used for the reliability measurement and constructs validity while the bootstrapping technique was used for testing the study hypotheses.
Findings ‒ The findings reveal that awareness mediated the relationship that exists between subjective norm, attitude, perceived behavioural control, and digital ṣukūk adoption in Nigeria. Overall, the empirical findings rejected seven out of 10 null hypotheses developed to answer the research questions.
Originality/Value ‒ The study serves as a pioneering effort towards unlocking the viability of digital ṣukūk adoption amongst the Nigerian populace.
Research Limitations/Implications ‒ The findings provide empirical evidence that awareness mediated the interrelationship between the explanatory variables (subjective norm, attitude and perceived behavioural control) towards digital ṣukūk adoption in Nigeria.
Practical Implications ‒ The findings suggest the need for the Debt Management Office (DMO) in partnership with the Central Bank of Nigeria (CBN) to facilitate the required regulation and standard pertaining to digital ṣukūk issuances and structures.
Article Classification ‒ Research pape
The Stability of Islamic Cryptocurrencies and Copula-Based Dependence with Alternative Crypto and Fiat Currencies
Get PDFPurpose — This study aims to examine Islamic cryptocurrencies and their dependency on foreign exchange markets in vine copula architecture (CD-Vine) and provide a framework for detecting complex dependence structures, risk management implications, and hedging effectiveness.
Design/Methodology/Approach — This study used gold-backed cryptocurrencies and three fiat currencies. The vine copula approach was preferred because it applies several distributions and estimates complex dependencies. Hedging effectiveness was measured by constructing simulation-based portfolios optimised with DCC-t-Copula. Benford’s law and realized variance were used to determine the stability of Islamic cryptocurrencies.
Findings — According to C-Vine and D-Vine copula models, paper money has a weak tail dependence with gold-backed cryptocurrencies. Only OneGram coin, whose volatility matched the risk of Bitcoin, showed zero irregularities in volume trading. The findings were robust to different estimations based on Minimum Spanning Tree and Dendrogram.
Originality/Value — This is the first study to examine Islamic cryptocurrencies’ stability and the significance of hedging effectiveness on gold-backed cryptocurrencies under a copula-based approach.
Research Limitations — The study did not apply time-varying vine copula.
Practical Implications — The risk management perspective shows insignificant hedge effectiveness in the portfolio of fiat and gold-backed cryptocurrencies
Maqāṣid Entrepreneurial Finance: An Islamic Approach to Small Business Capital Structure Theory
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Purpose — This research aims to develop a novel construct, maqāṣid entrepreneurial finance (MEF), based on an Islamic perspective to measure small and medium enterprises’ (SMEs) capital structure.
Design/Methodology/Approach — The MEF construct was developed using indicators based on maqāṣid al-Sharīʿah (the objectives of Islamic law) and entrepreneurial finance. A series of empirical studies were conducted to develop and validate an instrument to capture the MEF and its parameters. The development stages involved two steps: the item development and scale measurement stages.
Findings — The results of the factor analysis showed that five factors make up the MEF. These factors are generating and distributing profit, interest-free source of capital, distribution of income for the payment of zakat (compulsory alms) and ṣadaqah (optional alms), the provision from income for reinvestment, and avoiding haram (prohibited) investment.
Originality/Value — The paper’s overarching contributions are: first, it contributes to the development of the capital structure theory based on the Sharīʿah perspective; second, it contributes to the advancement of the capital structure theory for SMEs; third, it provides policy input to stakeholders in the SME field; and fourth, it provides practical guidelines relevant to SMEs.
Practical Implications — This research provides insight to academicians and managers on how MEF is constituted. For SME owners, the results of this study confirmed that maqāṣid al-Sharīʿah can be integrated into the capital structure decision of SMEs
Model Design of Sociopreneurship: Halal Based-Development of Micro, Small and Medium Enterprises Through Zakat Institutions
Get PDFPurpose — This study aims to examine the extent to which halal branding and digital media utilisation affect consumer behaviour. It also intends to provide an overview of the sociopreneurship model—a model that targets both financial and social benefits, while also working to solve problems in the community—to empower micro, small and medium enterprises (MSMEs) through the use of halal branding and digital media managed by zakat institutions.
Design/Methodology/Approach — In the first stage, this study employs a quantitative approach to analyse the factors of digital use and halal branding in influencing consumer behaviour. In this respect, multiple linear regression was used to analyse 172 research respondents. In the second stage, it uses a qualitative approach in designing a sociopreneurship model based on the results of the first stage.
Findings — This study found that religiosity and halal branding have a positive and significant effect on Muslim interest in buying halal products. In addition, the factors of price, religiosity and halal branding also positively and significantly affect satisfaction in consuming halal products. The sociopreneurship model can be applied to zakat institutions to facilitate MSMEs in developing product quality through halal branding and digital utilisation.
Originality/Value — The unique characteristic of this study lies in the use of both the quantitative and qualitative approaches in carrying out this research. It is hoped that the model offered in this study will be able to develop the MSME sector to keep abreast of modern trends despite the limited capital available to such institutions.
Research Limitations/Implications — The sample used in this study was restricted to Indonesia, with a limited number of respondents. Moreover, data collection was conducted through questionnaires without in-depth interviews with consumers, MSMEs and zakat institutions.
Practical Implications — The zakat institution’s scheme or model of sociopreneurship will be beneficial for the modern development of MSMEs even though they possess limited capital. Zakat institutions provide three types of assistance: 1) direct monitoring that starts from production inputs to the production process and which continues to the distribution process to ensure that the products developed by the fostered MSMEs are truly halal; 2) assistance at the digital marketing stage; and 3) assistance in accessing loan funds under qarḍ ḥasan (benevolent loans) schemes.
Social Implications — This research has a social impact on the development of MSMEs through the implementation of the concept of sociopreneurship. In this case, MSME actors who are classified as donation recipients can turn into donors, which would assist in reducing poverty levels. Therefore, social and business benefits will be achieved through the modern development of MSMEs
Lack of Profit-and-Loss Sharing Contracts in Moroccan Islamic Banks: An Investigation During the Coronavirus Pandemic
Get PDFPurpose — The purpose of this paper is to examine the challenges and barriers to implementing profit-and-loss sharing (PLS) contracts in Moroccan Islamic banks (IBs).
Design/Methodology/Approach — The paper presents the results of exploratory qualitative research based on face-to-face interviews with local managers of Moroccan IBs in the Rabat–Casablanca region. The investigation was carried out in September 2020, during the Coronavirus (COVID-19) pandemic.
Findings — The findings reveal that various challenges, mainly institutional and operational, as well as the implications of the COVID-19 pandemic have been the main barriers to implementing PLS contracts in Moroccan IBs.
Originality/Value — The findings are supported by field research targeting the managers who are directly concerned with the commercialisation of PLS contracts. Moreover, the present paper discusses the subject within the Moroccan context, where Islamic banking is a relatively recent phenomenon.
Research Limitations/Implications — Given the limited number of IBs in Morocco and the COVID-19 lockdown measures, bank managers in the Rabat–Casablanca region were considered. Consequently, only 14 managers agreed to contribute to the present research. The findings depend on the experience of the respondents on the topic of the research; therefore, other factors and challenges may exist.
Practical Implications — The present paper may remind scholars and practitioners of the importance of PLS instruments, especially under the pressure of COVID-19. It is an attempt to explain the challenges faced by these agreements and to make some recommendations in the hope that they will see the light of day in the Moroccan market
Islamic banking’s contribution to the Malaysian real economy
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Malaysia is one of the fastest-growing Asian economies with a properly designed and developed Islamic financial system. This unique feature of the Malaysian economy made it an important case study, and the purpose of this study is to assess for the dynamic contribution of Islamic finance to the growth of the real economy.
Design/methodology/approach
The study uses a quarterly data set of 20 years analysed via the autoregressive distributive lag bounds test approach to cointegration.
Findings
The results in the short-run show a non-significant relationship between Islamic banking indices and the real economy. However, in the long-run, financing and deposits of Islamic banks are favourable and contribute significantly to the growth of the Malaysian economy. There was an accumulation of meaningful and wide-ranging investment over the period of the study and productivity of capital was also extra-efficient. The direction of causality is found to be bidirectional between Islamic banking deposits and Malaysian gross domestic product (GDP), but there is a weak causal effect from Islamic banking financing to GDP.
Research limitations/implications
Malaysia has a dual financial system (conventional and Islamic) and both can affect its real economy. This research is limited to Islamic banking’s effects on Malaysian economic growth. The research also limits the scope and coverage for 20 years, from 1998 to 2017 to cover the years for which data is available for all the variables used in the study.
Practical implications
The results confirm that the Islamic banking sector in Malaysia is performing well in carrying out its major function of financial intermediation, which is the pooling and channelling of funds to productive investment activities. Consequently, the fact that Malaysia excels in Islamic finance is not a fluke. It is because of the effective performance of Islamic financial institutions in the country. Furthermore, Malaysian authorities are doing their level best in promoting Islamic financial activities.
Originality/value
The study fulfills the need to uncover the relationship between the Islamic financial system and the real economy in Malaysia. It differs from other studies as it uses the most recent available data, introduces new variables and identifies the channel by which Islamic banking development transmits growth.
DOI: https://doi.org/10.1108/IJIF-01-2019-000
The impact of economic blockade on the performance of Qatari Islamic and conventional banks: a period-and-group-wise comparison
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This paper aims to empirically assess the performance of Islamic banks (IBs) and conventional banks (CBs) in Qatar before and after the imposition of the economic blockade on Qatar and the significance of the blockade’s subsequent impact.
Design/methodology/approach
This study focuses only on the domestic commercial banks comprising four IBs and five CBs operating in Qatar. The banks’ financial reports are used as a secondary source to generate data. A study period from 2015 to 2019, separated into pre-blockade and post-blockade periods and comprising data on a semi-annual basis, was examined. Financial ratios and t-tests are used to compare bank performance and test the significance level of the blockade, respectively.
Findings
Generally, the findings show that IBs slightly outperformed CBs. Solvency ratios show strong capitalization (measured by capital adequacy ratio, CAR) and external fund (measured by equity multiplier ratio, EMR) reliance of the banks, despite minor fluctuations. Yet, only the CAR of CBs has been significantly affected by the blockade. Profitability (measured by return on assets, ROA and return on equity, ROE) of both bank groups grew unsteadily over the period, but IBs remained more efficient (measured by operating efficiency, OEOI) than CBs. Liquidity ratios indicate almost similar depositor fund utilization (measured by loans to deposit ratio, LDR) and credit offering (measured by loans to assets ratio, LAR) by the banks. All three metrics were weakly impacted. In terms of asset quality, bad loans (measured by non-performing loans ratio, NPL) and provisions (measured by loan loss provisions, LLP) surged moderately post-blockade. The blockade affected both groups’ asset quality.
Originality/value
To the author’s knowledge, this is the first study to comparatively examine the performance of Qatari IBs and CBs during the latest economic embargo and their exposure to the crisis.
DOI: https://doi.org/10.1108/IJIF-04-2020-008
Business succession from an Islamic accounting perspective
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The purpose of this paper is to discuss the inheritance of a business from the Islamic accounting perspective.
Design/methodology/approach
The paper adapts the relevant provisions of conventional accounting standards and practices that conform to Sharīʿah (Islamic law). In addition, the provisions of the Islamic accounting standard for musharakah (AAOIFI’s FAS No. 4) found to be relevant are also adapted.
Findings
The study shows that the assets of an inherited business should be measured at their fair values and that liabilities and legacies must be deducted therefrom with the view to arriving at the equity (or residue). The equity is then distributed among the heirs based on the sharing ratio established according to the Noble Qurʾān, the Sunnah (the Prophet’s way) and Muslim jurists’ views. Therefore, the inherited business becomes a family business as each heir is admitted into it. By extension, Islam emphasizes that the business should remain a going concern to generate income to sustain the welfare of the heirs.
Research limitations/implications
The discussion of the paper is limited to the inheritance of a business and its going concern in line with the Sharīʿah.
Practical implications
Special attention should be paid to the inherited business to ensure not only its continuity to generate income for the heirs but also that each heir gets a correct share of the equity of the business as regulated by the Sharīʿah.
Originality/value
This study links Islamic inheritance to the going concern of the business, which from all indications has not been given full consideration by previous studies.
DOI: https://doi.org/10.1108/IJIF-06-2018-005
Harmonizing and constructing an integrated maqāṣid al-Sharīʿah index for measuring the performance of Islamic banks
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This paper aims to develop a performance measure for Islamic banks (IBs) by harmonizing related studies. Furthermore, this work uses the developed yardstick to analyze the performance of a sample of 11 IBs from across different countries.
Design/methodology/approach
This paper uses the mix-mode method. The qualitative approach is engaged first to construct the IBs performance yardstick. Following this, the quantitative approach is applied through the use of the performance yardstick to measure the sample’s performance.
Findings
This study develops a maqāṣid-based performance yardstick adapted from previous works. The developed model in this study is called an integrated maqāṣid al-Sharīʿah--based performance measure (IMSPM). By using this performance measure, the present paper finds that the sample performed highest on the objective of nafs (self) over the three-year period. In addition, this study identifies the information which best indicates the sample’s performance during the analysis.
Research limitations/implications
This paper uses the sample’s annual reports. The analysis is thus limited to informational disclosure.
Practical implications
Islamic banking and financial institutions may use the IMSPM to communicate a measurable report on their promotion of the maqāṣid al-Sharīʿah (objectives of Islamic law).
Social implications
The evidence from 11 IBs is indicative of their efforts to realize maqāṣid al-Sharīʿah in the banking industry. This point may best challenge the practice of stigmatizing IBs for not being in line with the Sharīʿah (Islamic law) or of imitating conventional banks.
Originality/value
The novelty of this study lies in two points. First, this study harmonizes previous works to integrate financial and religious measures in a single yardstick. Second, by using the developed standard, this study offers a fresh insight into the global IBs’ performance, represented by 11 IBs worldwide.
DOI: https://doi.org/10.1108/IJIF-01-2018-000
Factors Influencing Thai Muslims' Willingness to Donate Cash Waqf to Religious Projects
Get PDFPurpose — Muslim communities in Thailand have lately used cash waqf as a creative strategy to raise seed money from Muslim contributors to implement religious projects such as building religious institutions like mosques and Islamic schools. The factors influencing this unique kind of giving have, to date, rarely been studied. This research attempts to examine the motivational and economic elements that impact people’s willingness to donate (WTD) cash waqf to such religious projects.
Design/Methodology/Approach — The study utilised a Contingent Valuation Method (CVM) and an ordinal logistic regression method to examine the effects of various independent variables on the WTD. A validated structured questionnaire was utilised to collect primary data from 404 cash waqf donors in the southernmost provinces of Thailand.
Findings — When comparing donors with medium income levels to those with higher salary levels, the findings show that donors in the higher salary category were more likely to generate a higher WTD propensity. The probability of donors’ WTD was positively influenced by any reductions in debt levels. Furthermore, factors such as belief in the afterlife, the salience of one’s Muslim identity, and the experience of a warm glow were found to have a positive impact on individuals’ WTD cash waqf to religious projects.
Originality/Value — This study utilised the Contingent Valuation Method (CVM) to examine the cash waqf practices, which has received limited attention in previous scholarly works. Furthermore, the variables employed in this research serve to broaden the scope of understanding in the realm of Islamic philanthropy, surpassing the confines of the attitude-intention framework.
Research Limitations/Implications — The factors used in this study encompass the internal drives of potential donors. In reality, a number of external circumstances, such as the validity of the waqf project and the donor’s accessibility to other options, may have an impact on the donor’s choice. Additionally, the scope of this study was restricted to the southern border provinces of Thailand. It would be of interest to conduct additional research that broadens the sample size and geographical scope to include other regions within the country or even other countries with diverse cultural and socioeconomic contexts. This would enable the generalisation of the findings obtained from this study.
Practical Implications — Waqf fundraising organisations should focus on boosting awareness among high-income, low-debt people. This population group donates more than middle- and lower-class people. Mosques and religious organisations can use a strategy to help donors reassess the spiritual benefits of waqf giving in relation to the afterlife, the reinforcement of their Muslim identity, and the emotional satisfaction of giving. These motivators will increase the likelihood of mosque donations