Islamic Finance and Development in Malaysia

2021 ◽  
Author(s):  
Fulya Apaydin
Keyword(s):  
Interest Rates ◽  
Capital Accumulation ◽  
Islamic Finance ◽  
Financial Industry ◽  
Consumer Durables ◽  
Banking And Finance ◽  
International Investors ◽  
Islamic Economic ◽  
Institutional Legacies ◽  
Financial Transactions

From a historical perspective, Islamic economic institutions have not been conducive to capital accumulation in Muslim societies (Kuran 2004, 2011). This has been further hampered by a lack of trust among different faith communities, where Muslims were historically charged higher interest rates by non-Muslim financiers (Kuran and Rubin 2018). Despite these institutional legacies, Islamic banking and finance has grown rapidly in the Muslim world over the past few decades. In some countries, Islamic finance is no longer considered a niche field, as the total volume of halal exchanges constitute a substantial share in the overall amount of financial transactions. This chapter focuses on the role of Islamic finance in development and argues that this relationship is further influenced by the conditions under which private money creation occurs. In particular, the case of Malaysia is a good example that showcases how the building of market institutions is not enough to stimulate equitable development: while an extensive network of Islamic finance institutions attract domestic and international investors, much of the loans extended by these banks finance real-estate and consumer-durables purchases. Islamic banks are less willing to extend credit to small and medium-sized businesses on the grounds of perceived high risk. The key beneficiaries of the Islamic financial industry are large financial corporations that raise capital via issuing Islamic equity, and governments that diversify their debt composition using shariʿa-compliant bills and bonds.

scholarly journals An economic theory of Islamic finance

2017 ◽  
Vol 9 (2) ◽  
pp. 117-132 ◽  
Author(s):  
Mabid Ali Al-Jarhi
Keyword(s):  
Design Methodology ◽  
Islamic Finance ◽  
Economic Systems ◽  
Monetary Reform ◽  
Content Type ◽  
Reform Agenda ◽  
Banking And Finance ◽  
Economic Rationale ◽  
Islamic Economic ◽  
Set Up

Purpose This paper aims to provide an economic rationale for Islamic finance. Design/methodology/approach Its methodology is simple. It starts with listing the contributions to economic analysis relevant to the required rationale in the theories of banking, finance, price, money and macroeconomics, to identify the main rationale for Islamic finance. A concise description of the author’s model for an Islamic economic system, within which Islamic finance can be operational, is provided. Findings The paper finds distinct advantages of Islamic finance, when properly applied within the author’s model. Islamic finance can therefore be a candidate as a reform agenda for conventional finance. It opens the door for significant monetary reform in currently prevalent economic systems. Research limitations/implications The first limitation of the paper is that the distinct benefits of Islamic finance are all of macroeconomic types which are external to Islamic banking and finance institutions. They are therefore not expected to motivate such institutions to apply Islamic finance to the letter, without regulators interference to ensure strict application. The second limitation is the necessity to set up enabling institutional and regulatory arrangements for Islamic finance. Originality/value The results are unique as they challenge the received doctrine and provide non-religious rationale for Islamic finance.

Islamic Economic Principles

2019 ◽  
Author(s):  
Rodney Wilson
Keyword(s):  
Interest Rates ◽  
Economic System ◽  
Charitable Giving ◽  
Private Property ◽  
Moral Issue ◽  
Socialist Economy ◽  
Private Property Rights ◽  
Banking And Finance ◽  
Normal Method ◽  
Islamic Economic

Justice in commercial transactions is central to Islamic economic teaching, in particular the notion that remuneration should be fair, with distribution viewed as a moral issue. Risks are inherent in any economic system, but in Islam rather than risks being borne by debtors alone, they should be shared by creditors. This has implications for the organization of banking and finance. The charging of interest is forbidden, partly due to concerns about exploitative usury, as well as unease about how interest rates are determined. Islamic economic teaching stresses the merits of charitable giving and the importance of tackling poverty. At the same time there is an awareness of the dangers of creating a dependency culture and the desirability of sustainability in charitable giving. There is concern not only with how money is earned but with how it is spent, with Islamic economic teaching providing guidance on what spending is legitimate and desirable and what should be avoided. Markets are viewed as the normal method of conducting business in Islamic economics, and private property rights are respected. Islamic teaching in the economic sphere is often regarded as more compatible with a capitalist economic system than a socialist economy, although there is no consensus among Islamic economists about where the dividing line between the state and the private sector lies. Arguably Islamic teaching has developed more at the microeconomic level of the firm while macroeconomic fiscal and monetary policy options remain contested.

PETA KEKUTAN EKONOMI SYARIAH DALAM MENGHADAPI MASYARAKAT EKONOMI ASEAN (MEA)

ALQALAM ◽  
2015 ◽  
Vol 32 (2) ◽  
pp. 331
Author(s):  
Itang Itang
Keyword(s):  
Free Market ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Economic Community ◽  
Financial Industry ◽  
Muslim Population ◽  
The People ◽  
Islamic Financial Institutions ◽  
Asean Economic Community ◽  
Islamic Economic

This paper examines the economic power of sharia that is not only able to survive but also can grow in the free market zone in Southeast Asia (ASEAN Economic Community (AEC)). The Islamic economic strength in Indonesia can be based on several reasons namely: 1). Muslim population. As the country with the largest Muslim population of about (87-90%), Indonesia should be the pioneer and the great power of Islamic finance in the world 2). Inherent Islamic doctrine and human resources. 3). Regulation of Islamic Economics as a tool that can legalize all policies the implementation of Islamic Economics. 4). Actors of Islamic Economics that come from various backgrounds such as practitioners, academics and customers. 5). Islamic Financial Industry Development. According to the data from Bank Indonesia in October 2013, there are 11 Islamic Banks, 23 Islamic Banks in the form of Sharia Business Unit , and 160 small sharia banks that distribute the fund for the people. Islamic banking assets currently has reached Rp. 228 trillions. The development of Islamic financial institutions does not only reach Islamic banks but also Islamic non­ banks such as insurance and pawnshop. Therefore we  are optimistic that sharia economy can grow in ASEAN Economic Community (AEC).Key word: sharia economy , islamic finance, AEC , ASEAN ,

scholarly journals Rethinking Islamic Economics

2019 ◽  
Vol 32 (2) ◽  
pp. 119-124
Author(s):  
Mansor Haji Ibrahim Mansor Haji Ibrahim
Keyword(s):  
Islamic Finance ◽  
Islamic Banking ◽  
Limited Ability ◽  
Economic Issues ◽  
Mainstream Economics ◽  
Banking And Finance ◽  
Economic Practices ◽  
Islamic Economic

The emergence of Islamic viewpoints on economic issues under the umbrella of Islamic economics has captivated much interest especially in its practical manifestation in Islamic banking and finance. In light of the failure of mainstream economics to address many pressing issues, and hence the need for alternative views, this paper offers assessments of Islamic economics whether (i) it is relevant to this need, (ii) it has progressed to the extent that it has been made to become relevant, and (iii) it is also in need of reform. While I argue that Islamic economics is relevant, it falls short of expectations on the second issue. The major reasons being: (a) the lack of progress in Islamic economics theory, (b) the similarity of Islamic economic practices in the forms of Islamic finance to conventional finance, and (c) its limited ability thus far to embrace multi-perspective views. On the basis of these, I conclude that Islamic economics is also in need of reform.

scholarly journals ISU GLOBAL PEREKONOMIAN ISLAM: Telaah Kritis terhadap Tata Kelola dan Aktivitas Lembaga-lembaga Keuangan Islam

2016 ◽  
Vol 1 (2) ◽  
pp. 111
Author(s):  
Muhdi Kholil
Keyword(s):  
Financial Institutions ◽  
Islamic Finance ◽  
Islamic Banking ◽  
International Forum ◽  
Banking And Finance ◽  
Finance Industry ◽  
Financial Products ◽  
Economic Practice ◽  
The World ◽  
Islamic Economic

<p>Indonesia is to be known widely by the world, which has Islamic finance system different from most countries. Indonesia which is in the international forum of financial syriah known "orthodox" or conservative in the application of Islamic principles recognized the economic practice of Islam which is closer to the economic substance of Islam, and relatively completed all aspects of the economy. Islamic economic development not only in the sectors has been developed such as banking, capital markets and non-bank financial institutions other, but also in extended development of the microfinance sector,  social and financial practices of real business to meet Islamic principles.</p><p>The composition and transaction of Islamic financial products’ Indonesia is a fact that is not owned by other countries which are also developing Islamic banking and finance industry. No wonder, since the majority of developing countries in the world of sharia finance industry with the approach of imitation (mimicry) with conventional, and many experts doubt the originality/economic system of Islamic finance, both conventional and expert on Islamic scholars. But on many opportunities, from seminars, conferences and working group forum, many countries are aware that Indonesia has a different form of sharia industry, the application of Islamic finance that has another color.</p><p>Keyword: Economics, Sharia, Indonesia.</p>

scholarly journals La política monetaria en presencia de las finanzas islámicas: un estudio exploratorio

2021 ◽  
Vol 17 (23) ◽  
pp. 307
Author(s):  
Joudar Fadoua ◽  
Dinar Brahim
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Islamic Finance ◽  
Financial Industry ◽  
Financial Systems ◽  
Operating Side ◽  
Opening Up ◽  
Islamic Institutions

En los últimos años se ha producido un verdadero desarrollo de la industria financiera islámica, abriendo nuevas oportunidades de financiación para los inversores. Para beneficiarse de sus productos, varios países se han embarcado en el experimento financiero islámico. Al contar ya con una infraestructura bancaria y monetaria convencional, la implantación de instituciones islámicas puede resultar difícil, ya que se supone que deben cumplir con la sharia al tiempo que operan junto a sus homólogos convencionales. Sin embargo, cuando los dos sistemas financieros coexisten, la práctica de la política monetaria es un verdadero desafío que da lugar a muchas reflexiones. De hecho, la prohibición de ciertas prácticas, como el uso de tipos de interés, por parte de las finanzas islámicas crea una necesidad real de diseñar instrumentos que se adecuen a los preceptos de la Sharia. In recent years, the Islamic financial industry has developed significantly, opening up new financing opportunities for investors. To benefit from its products, several countries have embarked on the Islamic financial experiment. Already having a conventional banking and monetary infrastructure, the implementation of Islamic institutions can be difficult, as they are supposed to be Sharia-compliant while operating side by side with their conventional counterparts. However, when the two financial systems coexist, the practice of monetary policy is a challenging and thoughtprovoking one. Indeed, the prohibition of certain practices, such as the use of interest rates, by Islamic finance creates a real need to design instruments that are appropriate to Shariah precepts.

scholarly journals Impact of Credit Risk, Distribution of Interest Rate, and Liquidity on Bank Profitability

2022 ◽  
Vol 6 (2) ◽  
pp. 97
Author(s):  
Sinta Purnama Sari
Keyword(s):  
Credit Risk ◽  
Interest Rates ◽  
Sampling Method ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Bank Profitability ◽  
Islamic Economic ◽  
The Impact

Developing Islamic finance in Indonesia is needed to strengthen a sustainable economic structure. This issue is based on the promising potential of Islamic economic and financial development. This study examines the impact of credit risk, the spread of interest rates, and liquidity on bank profitability. The population in this study is Islamic banking companies in Indonesia during the 2014-2018 period. The sample was chosen from the purposive sampling method and obtained a sample of 50 companies from several criteria. This research uses multiple linear regression analysis with the help of SPSS version 21. This research shows that credit risk and liquidity affect bank profitability. At the same time, the spread of interest rates does not affect banks' profitability.

scholarly journals EPISTEMOLOGI EKONOMI ISLAM DAN MAQASID SYARIAH DALAM KURIKULUM EKONOMI ISLAM DI PERGURUAN TINGGI

2018 ◽  
Vol 9 (2) ◽  
Author(s):  
SELAMAT MULIADI
Keyword(s):  
Higher Education ◽  
Learning System ◽  
Islamic Finance ◽  
Public Higher Education ◽  
Financial Industry ◽  
Curriculum Structure ◽  
The Difference ◽  
Market Needs ◽  
Islamic Economic ◽  
Learning Development

Abstract. The Epistemology of Sharia Economy and Maqasid Sharia in Islamic Economics Curriculum in the Higher Education. The potencies and roles of Universities both Islamic Higher Education (PTA) and Public Higher Education (PTU) in providing human resources through Islamic economic and finance learning development that accommodates the competencies of industries demand. Islamic economic as discipline has foundation of epistemology. The main problem in the development of economic and Islamic finance in Indonesia is still the gap between the needs of industry and graduate from college. This study aims to analyze how epistemology and the development Islamic economic and curriculum structure of Islamic economics in universities that teach Islamic economic and what is effective approach to be applied so that graduates can meet the needs of financial industry Islamic economic. The method used in this study is a content analysis is used to explain the depth of the curriculum of Islamic economic in university. Based on the results of the study found that the difference was the presence of Islamic economic learning system in higher education so that graduates produced by universities that teach Islamic economic is still little that can meet the market needs of Islamic financial industry.  Abstrak. Epistemologi Ekonomi Islam dan Maqasid Syariah Dalam Kurikulum Ekonomi Islam di Perguruan Tinggi. Potensi dan peran Universitas baik Pendidikan Tinggi Islam (PTA) dan Pendidikan Tinggi Publik (PTU) dalam menyediakan sumber daya manusia melalui pengembangan pembelajaran ekonomi dan keuangan Islam yang mengakomodasi kompetensi permintaan industri. Ekonomi Islam sebagai disiplin memiliki fondasi epistemologi. Masalah utama dalam pengembangan ekonomi dan keuangan Islam di Indonesia masih kesenjangan antara kebutuhan industri dan lulusan dari perguruan tinggi. Penelitian ini bertujuan untuk menganalisis bagaimana epistemologi dan pengembangan ekonomi Islam dan struktur kurikulum ekonomi Islam di universitas yang mengajarkan ekonomi Islam dan apa pendekatan yang efektif untuk diterapkan sehingga lulusan dapat memenuhi kebutuhan industri keuangan ekonomi Islam. Metode yang digunakan dalam penelitian ini adalah analisis isi yang digunakan untuk menjelaskan kedalaman kurikulum ekonomi Islam di universitas. Berdasarkan hasil penelitian ditemukan bahwa perbedaan itu adalah adanya sistem pembelajaran ekonomi Islam dalam pendidikan tinggi sehingga lulusan yang dihasilkan oleh perguruan tinggi yang mengajarkan ekonomi Islam masih sedikit yang dapat memenuhi kebutuhan pasar industri keuangan syariah

scholarly journals Research in Islamic Economics and Finance in Malaysia: A Review

2004 ◽  
pp. 1-24
Author(s):  
Muhamad Muda ◽  
Nursilah Ahmad ◽  
Hanim Misbah ◽  
Nor Haziah Hashim ◽  
Zurina Kefeli@Zulkefli ◽  
...  
Keyword(s):  
Economic Development ◽  
Descriptive Statistics ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Field Of Study ◽  
Banking And Finance ◽  
The Future ◽  
Islamic Economic ◽  
Areas Of Interest

This paper evaluates and analyses contents on several selected journals on Islamic economics and finance in Malaysia between 1977-3003. A brief introduction on the purpose, importance and structure of the journals are highlighted followed by its history, within the first part of the article. This paper also covers the background of the journals, the methodology and the reviews the relevant articles. Apart from that descriptive statistics concerning the classification of field of study of study each journal and subtopics of articles reviewed were also presented. A brief contents analysis of Islamic economics system, Islamic finance and banking, Islamic economic development and Islamic management articles were discussed to examine its prospect for research in the future. This review found that the scope and areas of interest, as indicated by the publications are narrow and few. This paper concludes with a discussion on the needs to proliferate the research and publication in the areas  of Islamic banking and finance, Islamic economics and Islamic management.

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