The experience and the prospects of Islamic finance in Kazakhstan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nasim S. Shirazi ◽  
Laura A. Kuanova ◽  
Adilbek Ryskulov ◽  
Aziya G. Mukusheva
Keyword(s):  
Institutional Environment ◽  
Public Awareness ◽  
Local Population ◽  
Legal Framework ◽  
Islamic Finance ◽  
Financial Industry ◽  
Content Type ◽  
Qualitative And Quantitative ◽  
Bank Deposits ◽  
Further Development

Purpose This paper aims to take stock of the Islamic finance experience and aims to identify an approach for further development in Kazakhstan, using qualitative and quantitative assessments. Design/methodology/approach The paper presents a conceptual framework based on literature review and content analysis. Furthermore, the study uses a survey-based methodology to collect data and determine the prospects, challenges and possible remedies. The quantitative parameters of the potential of Islamic finance in Kazakhstan are based on the assessment of funds on bank deposits, which can be considered potential resources for Islamic financial instruments. Findings The results suggest improving the legal framework and institutional environment to grow Islamic finance in the country. Raising trust levels in a Shariah-based system within the local population, reducing transaction costs and reducing information asymmetry allow raising public awareness of Islamic finance and integrating Islamic finance into the conventional financial system. Research limitations/implications This paper is not free from limitations and does not focus on implementing the suggested results. Social implications This work elaborates in what way the Islamic finance advancement affects the development of economics and focuses on co-financing of real asset-based projects, with the risk and loss sharing; charity; strict prohibitions on the financing of haram activities, pseudo-needs; and subordination of the individual’s interests to society. Originality/value The proposed study presents originalities and it identifies the significant challenges and barriers for further Islamic financial industry development in Kazakhstan by professionals survey. Furthermore, the study assesses potential Islamic finance assets and provides recommendations for successful Islamic finance advancement, considering the peculiarities of the national economy.

The Global Perspective of Islamic Finance and the Potential for China to Tap into the Islamic Finance Market

2021 ◽  
Vol 11 (01) ◽  
pp. 14-28
Author(s):  
Fares Djafri ◽  
Mohamad Akram Laldin ◽  
Abdelkader Laallam
Keyword(s):  
Success Factors ◽  
Public Awareness ◽  
Legal Framework ◽  
Global Perspective ◽  
Inductive Method ◽  
Islamic Finance ◽  
Belt And Road Initiative ◽  
Financial Industry ◽  
Belt And Road ◽  
The Government

Purpose: Islamic finance is considered one of the fastest-growing segments of the global financial industry. Over the last four decades, Islamic finance has expanded globally to western and other non-Muslim countries. This paper aims to explore the potential for China to tap into the Islamic finance market and the challenges that may face the implementation of Islamic finance there. Methodology: This study adopts a qualitative method of inquiry and utilizes the inductive method and content analysis to build comprehensive knowledge that would assist in exploring the significance and potential benefits that China may gain from the adoption of Islamic finance. Findings: The study reveals that China has a huge opportunity to capitalize on Islamic finance for economic development, particularly in the implementation of China’s Belt and Road Initiative (BRI). The paper also highlights the critical success factors for introducing Islamic finance in China, most importantly, political will. Genuine support from the government is needed for the effective introduction of Islamic finance in the country. This support should be subsequently followed by the development of the legal framework, an amendment of the laws, broad publicity to raise public awareness, and effective collaboration with international organizations. Significance: To the best of the authors’ knowledge, this study is among the few which highlights the potential for China to tap into the Islamic finance market. It is expected to contribute to enhancing the implementation and development of the Belt and Road Initiative (BRI).

Towards a global hub

2016 ◽  
Vol 58 (1) ◽  
pp. 48-72 ◽  
Author(s):  
Umar A. Oseni ◽  
Abu Umar Faruq Ahmad
Keyword(s):  
Dispute Resolution ◽  
Legal Framework ◽  
Institutional Framework ◽  
Islamic Finance ◽  
Legal Analysis ◽  
Content Type ◽  
Finance Industry ◽  
Recent Developments ◽  
Islamic Financial Institutions ◽  
Resolution Processes

Purpose – The paper aims to examine significant developments in the institutional framework for dispute resolution in the Islamic finance industry in Malaysia. Malaysia, as part of its efforts to consolidate its enviable Islamic finance industry, has strengthened its institutional framework for dispute resolution. Design/methodology/approach – Data for this study were collected from both primary and secondary legal sources. Through a conceptual legal analysis, the institutional frameworks of dispute resolution in the Malaysia’s Islamic finance industry are studied. Findings – The study finds that Malaysia is far ahead of other jurisdictions by a significant margin in spearheading reforms in the emerging global Islamic finance industry. The dispute resolution framework has been largely affected by the recent reforms. Research limitations/implications – Other jurisdictions may borrow a leaf from Malaysia’s initiative in providing a robust legal framework for dispute management in the Islamic finance industry. Practical implications – Apart from adopting Malaysia’s framework and possibly adapting it to suit their specific local variations, other jurisdictions may also encourage Islamic financial institutions to incorporate effective dispute resolution processes in Islamic finance contracts. Originality value – This study critically discussed most recent developments in the institutional framework on dispute resolution in the Islamic finance industry in Malaysia.

A transaction costs-based model to choose PPP procurement procedures

2016 ◽  
Vol 23 (4) ◽  
pp. 491-510 ◽  
Author(s):  
Nunzia Carbonara ◽  
Nicola Costantino ◽  
Roberta Pellegrino
Keyword(s):  
Transaction Costs ◽  
Conceptual Model ◽  
Institutional Environment ◽  
Legal Framework ◽  
Related Factors ◽  
Content Type ◽  
The Public ◽  
Proposed Model ◽  
Procurement Procedure ◽  
The Impact

Purpose – The purpose of this paper is to develop a decision model for choosing the tendering procedure in PPP that minimizes the transaction costs borne by the public sector. Design/methodology/approach – A conceptual model that relates the procurement procedures described in the EU legal framework to launch PPPs and the transaction costs, considering the level of information managed by each procurement procedure has been developed. The authors use this conceptual model to develop propositions about the impact that specific project- and country-related factors have on the choice of the procurement procedure that minimizes the transaction costs. Findings – The application of the proposed model to the case of the Italian highway “Cispadana” shows its usefulness in orienting the public authority’s choice between the different tendering procedures, taking into account project- and country-related factors. Research limitations/implications – The present study fills the gap existing in the literature on transaction costs of PPP projects and the procurement procedure used to launch those projects by developing a model that relates the level of transaction costs with a set of key factors, namely the level of information managed during the tendering process, the number of bidders, the project size, the project complexity, and the institutional environment. Practical implications – As for practitioners, the main contribution of this study lies in offering a tool for supporting the public authority in the decision-making process about the tendering procedures in PPPs without imposing the selection of a specific procedure. Originality/value – The approach developed provides a new tool to support the contracting authority in the design and choice of the tendering procedures in PPP.

Economic substance or legal form: an evaluation of Islamic finance practice

2016 ◽  
Vol 9 (2) ◽  
pp. 277-295 ◽  
Author(s):  
Muhammad Hanif
Keyword(s):  
Financial System ◽  
Islamic Finance ◽  
Financial Industry ◽  
Legal Form ◽  
Content Type ◽  
Provision Of Services ◽  
Proper Training ◽  
Islamic Financial Institutions ◽  
Legal Forms ◽  
Practical Implications

Purpose Islamic financing is based on the ideology of Islam, proposing a different economic system than capitalism. The essence of Islamic financing lies in trading of goods, provision of services and/or investment under profit and loss sharing. This study aims to examine legal forms and economic substance of the contracts used by the Islamic financial industry. Design/methodology/approach To conclude on the objectives of the study, five most widely used contracts (modes/products), including Murabaha, Ijarah, Diminishing Musharaka, Sukuk and Mudaraba (deposits), were selected to test against the theory of the Islamic financial system. Findings It is found in the process that legally (legal form) contracts/products are in line with theory; however, economic substance is not very different from conventional counter parts. Practical implications Through application of alternative calculation measures/methods and proper training of human resources, Islamic financial institutions can shift economic substance of contracts in line with the theory of Islamic finance. Originality/value Islamic finance is an emerging area, and reasonably good amount of literature is available; however, perhaps, this is the only piece of work focusing on calculation methods, contributing in economic substance of contracts, being used in modern Islamic finance in addition to legal form as per essence of Islamic financial system.

Realising financial inclusion in Islamic finance

2019 ◽  
Vol 11 (1) ◽  
pp. 143-160 ◽  
Author(s):  
Akilu Aliyu Shinkafi ◽  
Sani Yahaya ◽  
Tijjani Alhaji Sani
Keyword(s):  
Financial Institutions ◽  
Low Income ◽  
Financial Services ◽  
Public Awareness ◽  
Financial Inclusion ◽  
Islamic Finance ◽  
Content Type ◽  
Financial Infrastructure ◽  
Islamic Financial Institutions ◽  
Regulatory Commitment

Purpose The purpose of this paper is to evolve a theoretical account that highlights the determinations for achieving financial inclusion in Islamic finance. Design/methodology/approach The methodology used is a library approach where the existing and relevant document remains the sources of concern. Findings The outcome of the study designates that robust technology; microcredit and microfinance services; legal and regulatory commitment of the regulators and policymakers of the Islamic financial institutions; extensive public awareness of Islamic financial services and products; financial proficiency and literacy; and financial infrastructure are some of the imperative drives for realising financial inclusion particularly for women, low income earners and rural poor. Research limitations/implications The paper limited itself to realising financial inclusion in Islamic finance. Thus, anything beyond the stated limitation is outside the scope of our objective. The paper has an inference for the concerned professional bodies, regulators, policymakers, stakeholders and practitioners of Islamic financial institutions. Originality/value The paper is original in its nature, it is also a pearl and a reference to those who may conceive and cherish the relevance of its capacity.

A comparative study on disqualification of company directors in the UK and Nigeria

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Samet Caliskan ◽  
Pereowei Subai
Keyword(s):  
Public Awareness ◽  
Legal Framework ◽  
Company Law ◽  
Primary Case ◽  
Advanced Economy ◽  
Content Type ◽  
The Law ◽  
The Uk ◽  
The Impact

Purpose The purpose of this paper is to argue that the disqualification of directors, coupled with other liabilities to which they may be subjected, particularly in insolvency, should be sufficient to deter wrongdoing, because of the impact they tend to have on their personal and professional lives. It, however, argues that the “deterrence” effect would be dependent on the existence of other factors such as the efficient application of the law, publicity and post-disqualification monitoring. Design/methodology/approach Using the UK as its primary case study, while also making reference to Nigeria and Turkey, this paper will show that while the existence of disqualification as a sanction exists in the first two countries, it is virtually absent from Turkey. And that while directors’ disqualification provisions are routinely applied in the UK, they are hardly invoked in Nigeria, except perhaps with respect to listed companies, due perhaps to a lack of awareness of its existence or potency. Findings This paper will conclude by making a case for a stronger application of the law, as it relates to directors’ disqualification in the UK, call for an elaboration of the legal framework in Nigeria as well as the need for a public awareness of its provisions and potential impact and contend that Turkey should put in place a legal framework for directors’ disqualification patterned also after the UK framework. Originality/value The uniqueness of this paper stems from its tri-country focus. In that respect, the UK, which is a more advanced economy, with a robust and dynamic company law regime, is used as the primary case study, whereas at the same time, developments in Nigeria, particularly with that country’s capital market, will be extracted and compared with the UK framework. Turkey, on the contrary, has been chosen as a case study mainly because it has no directors’ disqualification mechanism in its legal system. Comparing directors’ disqualification in one developing country, Nigeria, and a developed country, the UK and determining their upsides and downsides will be beneficial to Turkey in respect to establishing a deterrent effective disqualification mechanism on directors.

Fatwā shopping and trust: towards effective consumer protection regulations in Islamic finance

2017 ◽  
Vol 12 (3) ◽  
pp. 340-355 ◽  
Author(s):  
Umar A. Oseni
Keyword(s):  
Consumer Protection ◽  
Financial Services ◽  
Relevant Literature ◽  
Legal Framework ◽  
Legal Regulation ◽  
Policy Framework ◽  
Consumer Trust ◽  
Islamic Finance ◽  
Content Type ◽  
Finance Industry

Purpose This study aims to examine the phenomenon of Fatwā shopping, its effect on consumer trust in Islamic finance products and the need for effective consumer protection regulations in the Islamic finance industry. Design/methodology/approach The methodology used in this study is qualitative research which draws significantly from relevant regulations on financial consumer protection through analytical method to identify common themes on Fatwā shopping and consumer trust in the relevant literature. Findings This study finds that the increasing practice of Fatwā shopping through clandestine searches by some Islamic banks to get their new products endorsed by leading Sharī‘ah scholars requires proper legal regulation to avoid a total erosion of trust in the entire Islamic finance industry. Research limitations/implication Though Fatwā shopping is practiced in the Islamic finance industry, it is always difficult to get some desperate Islamic bankers to agree to this; hence, this study does not portend to examine the evidence on Fatwā shopping, but it seeks to bring to the fore the effect of Fatwā shopping on consumer trust in Islamic financial services, and the need for effective consumer protection regulations. Practical implications This study is expected to provide an invaluable guide and policy framework for emerging and promising jurisdictions on the need to regulate Fatwā shopping through an effective legal framework based on some best practices identified in the study. Originality/value Though there have been a number of studies relating to Fatwā shopping, focusing on the need for effective consumer protection regulations in the Islamic finance industry will enrich the existing literature and have significant implications for the future of the industry.

Tunisia Islamic finance: overview and future prospects

2014 ◽  
Vol 5 (1) ◽  
pp. 2-14 ◽  
Author(s):  
Neila Boulila Taktak ◽  
Sarra Ben Slama Zouari
Keyword(s):  
Critical Mass ◽  
Financial Education ◽  
Legal Framework ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Content Type ◽  
Finance Industry ◽  
Current State ◽  
Potential Development ◽  
Recent Developments

Purpose – The purpose of this paper is to better understand the current state of the Islamic financial system in Tunisia. In addition, it is aimed at discussing the preconditions that can help exploit the potential development of Tunisia's Islamic finance and expand the banked population. Design/methodology/approach – The paper describes the regulatory and legal framework governing the Tunisian Islamic banks. It provides a mapping of Islamic banks, mutual funds, Takaful institutions and a potential Sukuk market. The paper also relates recent developments including academic qualifications and training in Islamic finance. Findings – The paper concludes with various recommendations for the successful transition from a niche position to a critical mass. It argues the need to establish a specific regulatory framework, supervisory standards and rules of accounting for this kind of institutions. It suggests the development of Islamic financial education to strengthen the role played by the Islamic financing Ecosystem and to help Tunisia promote local and exportable expertise to other countries. Finally, authorities should focus more on promoting market Sukuk, Takaful and microcredit to fund SME. Originality/value – This paper contributes to the assessment of the current situation of Islamic finance in Tunisia by performing a full scan of the Islamic financial landscape instead of being limited only to Islamic banks. It proposes some prerequisites to benefit from the opportunities offered by the Islamic finance industry in Tunisia to take advantage of its future potential and ensure its promotion.

International comparison of Shari’ah compliance screening standards

2015 ◽  
Vol 8 (2) ◽  
pp. 222-245 ◽  
Author(s):  
Catherine S F Ho
Keyword(s):  
Service Providers ◽  
Islamic Finance ◽  
Screening Methods ◽  
Full Potential ◽  
Content Type ◽  
Ethical Investing ◽  
Qualitative And Quantitative ◽  
Fund Managers ◽  
Accelerate Growth ◽  
Quantitative Screening

Purpose – This paper aims to review the Shari’ah investment screening methodologies of 34 prominent global Islamic finance users, including index providers, Shari’ah service providers, Islamic banks, a regulator, an association body and fund managers. Design/methodology/approach – A comparative analysis is performed to highlight the variances of the Shari’ah-compliant methods and principles practiced by these renowned institutions with the latest compiled data. Findings – The two sets of business screens and financial screens are profiled separately to clearly examine the similarities and differences between the different methodologies. Some of these practitioners are more specific in their listing of Shari’ah-impermissible activities, while some are more general in allowing more businesses to be included as permissible. The majority of these users practice a two-tier method of screening: qualitative and quantitative. Under quantitative screen, the range of allowable threshold ratios on non-permissible criteria differs slightly between them. Research limitations/implications – With the wide divergence in screening methodologies applied by practitioners, there is a general consensus in the acceptance of compliant assets from various countries and practice. Standardization is, therefore, seen as a need not only to make understanding of Shari’ah investments clear to investors but also to discourage misunderstandings between scholars and investors. Practical implications – The suggestion, therefore, is to set globally acceptable universal Shari’ah standard methodologies which are applicable by the world Islamic financial market. These standards which are relevant and logical to global ethical investing would further stimulate investments in Islamic finance. Social implications – With Shari’ah-compliant asset growing exponentially relative to the world’s financial assets, it is alleged that greater harmonization of the global screening methods would prevent misunderstanding and provide a clearer insight on Shari’ah investing, which could further accelerate growth of the Islamic finance sector worldwide. Originality/value – To provide a more transparent regulatory environment and build local and regional regulatory framework through establishment of standards, there should be more consistency with minimum barriers that prevent the industry from achieving its full potential. The paper also contributes to existing literature by documenting and analyzing the qualitative and quantitative screening procedures as practiced by a comprehensive set of global Islamic finance users. It is, therefore, important to share this knowledge as an effort toward greater understanding and harmonization of the practices at the global level to accelerate growth in the industry.

Malaysia bank merger failure exacerbates future risks

2015 ◽  
Keyword(s):  
Financial Integration ◽  
Economic Conditions ◽  
Islamic Finance ◽  
Financial Industry ◽  
Building Society ◽  
Content Type ◽  
Share Prices ◽  
Bank Merger ◽  
Finance Industry ◽  
Industry Integration

Subject Malaysian banking outlook ahead of ASEAN financial integration. Significance On January 14, Malaysian commercial banks CIMB Group, RHB Capital and Malaysian Building Society (MBS) confirmed in a statement that their merger plan had been cancelled, blaming adverse economic conditions and falling share prices. The merger's cancellation has compounded difficulties facing Malaysian banking, and disadvantaged Malaysia in ASEAN financial industry integration and in expanding its Islamic finance industry. Impacts Malaysia will face increasing competition in Islamic finance. Until market conditions improve, Malaysian banks cannot realistically strengthen their capital bases. RHB may seek a merger to strengthen its business position.

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