Journal of Islamic Finance (JIF)
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Retirement Awareness Among The Working Population Below 40 In Malaysia
Full text linkThe paper aims to review and discuss retirement awareness among the working population below 40 years old in Malaysia. Retirement awareness is essential since by 2035, Malaysian will be an aging society with 30 per cent of its people will be in the category of 60 years and above. Consequently, retirement awareness helps ensure proper action or strategy regarding retirement preparation before reaching their retirement phase. This study applies a quantitative approach using survey questionnaires as the main instrument of data collection. A total of 287 working individuals the age below 40 years old have participated as the respondents to examine their retirement awareness towards retirement planning. Data collected were analyzed using descriptive analysis. The study provides an in-depth analysis of respondents' retirement confidence (RC), goal clarity (GC), attitude towards retirement (ATT), financial literacy and knowledge related to retirement planning (FL), and the sources of retirement information (SRI), all these are measured using a 5-point Likert scale. The findings indicate that the working adults do have some degree of awareness about retirement, and they do undertake early preparations for their retirement. Overall, this study provides information about the critical implications for the retiring population to survive during their retirement phase and help them to be more confident and well-prepared to face life's reality after retirement. Hence, it is recommended for employers to provide programs or courses that cover retirement areas as one of the initiatives to help their employees be more aware of their future retirement life, which will prevent a financial crisis in the later years
A Deep Learning Robo-Advisor Framework for Shariah-Compliant Investment into Chinese A-Shares
Full text linkThe economic growth of China has led to a growth of investment opportunities in China that has strengthened its collaboration with many Muslim countries. The One-Belt-One-Road initiative has led to growth in bilateral investment with many Muslim countries, requiring the investing Chinese companies to adopt more and more Islamic finance principles. Until recently, Muslim investors had relatively little information and options to invest into the Chinese markets, making the investment potentially impermissible according to Shariah Law. With the growing access provided by Islamic banks to Muslim investors, exchange traded funds incorporating Shariah compliant Chinese A-Share stocks have been set up. For individual investors, determining efficiently which stocks are Shariah compliant remains a considerable challenge and requires extensive manual analysis. Overcoming this challenge, the paper represents a deep learning Robo-advisor prescriptive framework for Shariah compliant investment advice in the Chinese stock market. The performance of the framework was evaluated on recent stock and company financial information, outlining the strong estimation and advisory functionality of the framework. The framework represents an important step towards making high quality Shariah-compliant investment advisory available to a wider audience
The Profit/Gain from Islamic Law of Contract Perspective and The Issue Of Ownership Risk (Daman al‐Milkiyyah)
Full text linkIn Islamic finance it is crucial to discuss the concept and the meaning of al-bay’ (Sale) and subsequently the concept of “Iwad”, when anyone want to understand issues concerning shariah legitimacy in Islamic banking and finance. The sale (Albay’) or the equivalent value “Iwad”, from shariah view, should consist of three main components, namely: market risk (ghurm), the work and effort (kasab), while the third component is liability (Daman). Albay; which is trade and commerce, constitutes the Quranic alternative to riba, as the contract of sale in Islamic law requires the seller to own the subject matter before executing the sale. The prophet Muhamad (pbuh) said: “do not sell what you do not own”. Therefore, there is a strong link between ownership and market risk. This research paper is analyzing the concept of profit from Islamic law perspective and discuss the issue of ownership risk in Islamic financial contracts. Using in depth analysis of literature review and qualitative methods of content analysis, this research implicitly explains the effect of Ghurm, Kasab, and Daman on Islamic finance transactions that are based on Albay'. Further, it highlights the principle mutual trade and cooperation in Albay' transactions.
The Principle of Tadarruj in Islamic Finance: A Conceptual Review
Full text linkEven though Islamic finance industry has been recognized among the promising sectors in the world, it is claimed that the modern financial environment is not too conducive to its progress. In fact, Islamic financial institutions have experienced various challenges, risks and restrictions in their operation. To adapt Shari’ah rulings into modern financial system, this effort must be carried out gradually. In this regard, this paper aims to explore the principle of tadarruj (gradual) and its application within Islamic finance. Since this is a conceptual research, it is based on document analysis. It is found that the element of tadarruj can be learned from the prohibition of riba at the time of revelation. In modern time, it seems that this principle has been considered in Islamic banking development in Malaysia, one of among progressive countries in this industry. Since this paper provides a philosophical perspective over the concept of tadarruj, it may be useful for all Islamic finance players including regulators, practitioners, and scholars, particularly to introduce new policies, to develop products and to expand the operation of Islamic finance industry
Determinants of Zakat Compliance among Muslim Individuals: A Systematic Literature Review
Full text linkZakat, also known as almsgiving, is the fourth pillar of Islam. Extensive literature has reported different factors in influencing zakat compliance. This study aims to identify, review and synthesize the determinants of zakat compliance among Muslim individuals. The present paper carried out a systematic literature review (SLR) of the related literature. The inclusion criteria were: i) publication date between 2000 and 2020, ii) being an empirical study, iii) written in English, and iv)published in the Scopus or Google Scholar database. Following Preferred Reporting Items for Systematic Reviews and Meta-analyses (PRISMA) procedures, 12 eligible empirical studies were included. The review suggests that compliance to pay zakat is determined by 1) psychological factors, 2), environmental factors, 3) organizational factors and 4) socio-demographic factors. This study contributes to the literature by consolidating studies on the factors determining zakat compliance among Muslim individuals and offers some implications for practitioners in implementing appropriate strategies to increase zakat collection
Assessment of 5Cs Relationship towards Credit Risk Management: Evidence from Islamic Banks
Full text linkThis study aims to provide a new approach to assess the Character, Capacity, Capital, Condition, and Collateral (5Cs) variables towards the Islamic Bank Credit Risk Management from the Islamic Banks in Nigeria. The study used a quantitative approach using a structured questionnaire; 310 individuals participated. Data are sourced from Islamic Bank staff, customers of Islamic Bank, experts from financial institutions and some Shariah scholars of the advisory board of Islamic banks. The study employed structural Equation Modeling (SEM), using AMOS and SSPS, are used for analysis. The results indicate a positive relationship between Character, Capacity, Capital, Condition, and Collateral (5Cs) and Islamic Bank Credit Risk Management; such can also control and mitigate Credit Risk in an Islamic Bank in Nigeria. In the managerial part, such credit risk should be considered vital in examining and controlling credit risk-mitigation. The paper indicates a positive and significant relationship between the Character, Capacity, Capital, Condition, and Collateral (5Cs) and Islamic Bank’s Credit Risk Management. The authors innovatively use a unique sample to assess the relationship between 5Cs and Islamic Bank’s Credit Risk Management. Even though 5Cs and Credit Risk Management are well-known in the conventional financial concept system, while have not been elaborate on Islamic Banks as the paper attempts to fill the gap. The study is limited to Northern Nigeria and did not cover the entire regions of the country due to the resource constraints and short study period
An Analysis of Cash Waqf Linked Sukuk for Socially Impactful Sustainable Projects in Indonesia
Full text linkSukuk is crowned as one of the most important instruments for raising funds, be it at the government of corporate level. In Indonesia, sukuk was first introduced in 2002. Sukuk market development was said to have contributed to the increase of GDP in Indonesia due to the improved productivity facilitated by better access to funds. Of late, a number of innovative Islamic finance products in line with Shariah principles had been introduced to the market with the aim to fulfil the diversified needs in the society. The idea is to combine two or more Islamic finance products in one for a better outcome. The case of Cash Waqf Linked Sukuk (CWLS) which are Islamic bonds (“Sukuk”) linked to an endowment (“Waqf”), is part of the development and innovation efforts in Islamic finance and social investment in Indonesia. When an important instrument like sukuk is coupled with a powerful Islamic social finance instrument, i.e., waqf, the combination can potentially be very impactful. Sukuk is an instrument for mobilizing funds, while waqf has the capacity to bridge charity and philanthropy with income generation and productive economic activities. Using a qualitative research based on explanatory and descriptive method, this paper analyses the practice of CWLS and its potential for socially impactful and sustainable projects in Indonesia, and to identify the benefits, opportunities, costs and risks of CWLS. The study found that CWLS can significantly contribute to social impact, as well as facilitate many sustainable development programs including government projects, education and healthcare initiatives and others. CWLS is believed to be a highly potential instrument with a positive impact on the society in Indonesia because of its benefits and opportunities are more considerable than its risks and costs
Developing The Hybrid Model (Waqf & Zakat) For Improving The Zakat Recipients’ Healthcare In Selangor
Full text linkThe paper aims to develop a system that will strengthen zakat recipients' healthcare through coordination between waqf and zakat institutions. According to sources, Selangor has a lot of waqf and zakat reserves that are not being used. To resolve these issues and optimize the usage of barren and underused properties of Waqf and Zakat, a better management structure is needed. To accomplish the objective, this research employs a qualitative approach. It is found in the study that the Zakat and Waqf can be used for investment purposes; however, return from these investments should be used for the intended purpose and, i.e., to ensure social well-being, especially of the marginalized groups of society. The proposed model holds significance in improving the healthcare of zakat recipients and leading the society towards achieving social well-being and better living standards. This study's results may enhance the policymakers' understanding and contribute to better utilization of Zakat and Waqf assets. Besides, it will also enhance zakat collection and distribution and contribute to Waqf and Zakat funds' efficient management. There are certain limitations to the study in data availability, such as official data for waqf land in Selangor is available till December 31, 2016
An Assessment of Using Sukuk for Waqf Property Development in India
Full text linkThe purpose of this study is to assess the viability of using Sukuk as a tool for financing the development of waqf properties in India. Using different reports, literature, and considering Indian Waqf Act, this study introduces Sukuk for waqf property development in India. Critical analysis of case studies of successfully employed waqf property development in Saudi Arabia and Singapore is also undertaken. From the various literature and reports, this paper finds that there is a huge economic potential for Indian waqf properties. However, due to several issues, one of them being a financial issue, waqf in Indian is unable to achieve its potential. Furthermore, the study also finds that there is a possibility to introduce Mudharabah Sukuk for this purpose. As Indian Waqf Act prohibits the sale, gift, or transfer of the waqf properties, Mudharabah can be the best suitable tool for financing the development of waqf properties. This study is conceptual in nature. Further studies can consider empirical research that considers factors such as awareness, knowledge, perception, and readiness to invest in Sukuk. The findings from this paper can be used to introduce Sukuk for waqf property development in India. The successful implementation will lead to the revitalisation of waqf properties in the country which will eventually result in the upliftment of Muslim society from social and educational backwardness and benefit them at-large. This paper also provides information about the potential of Indian waqf properties which very essential for the investors in Sukuk. This study is the first one to talk about the Sukuk for waqf property development in India