scholarly journals BANKING THE UNBANKED A PERCEIVED RECIPES FOR POVERTY ERADICATION PROGRAM: INDUCTION OF A NEW ISLAMIC MICROFINANCE MODEL IN NIGERIA

2018 ◽  
Vol 3 (2) ◽  
Author(s):  
Lukman Olorogun
Keyword(s):  
Financial Management ◽  
Financial Institution ◽  
Islamic Finance ◽  
Future Research ◽  
Poverty Eradication ◽  
Induction Program ◽  
Finance Industry ◽  
Education Workshop ◽  
Grassroots Level ◽  
Closed User Group

This study focuses on efforts to enhance financial inclusion program through the educational orientation development in the Nigerian Islamic finance industry. A Closed User Group (CUG) consisting of Muslims across Nigeria financial educational induction program formed the study sample. The formation of the CUG sought to establish an Islamic compliant financing model that would be effective at the grassroots level in the wake of the failure of microfinance programs to deliver the much needed poverty eradication. To this end, we developed a questionnaire and conducted a financial management induction and education workshop over a period of three days. On the third day, participants were given a questionnaire, from which the results showed that proper education and adjustment to the current available model of microfinance would bring about poverty eradication and that in terms of educational traits building of staff within a typical Islamic financial institution. Future research should look into transformation of personality vices affecting financial institutions as a whole. 

Legal and Sharīʿah non-compliance risks in Nigerian Islamic finance industry: a review of the literature

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zakariya Mustapha ◽  
Sherin Binti Kunhibava ◽  
Aishath Muneeza
Keyword(s):  
Content Analysis ◽  
Qualitative Methodology ◽  
Financial Institution ◽  
Relevant Literature ◽  
Forward Direction ◽  
Islamic Finance ◽  
Content Type ◽  
Finance Industry ◽  
The Impact ◽  
Research Studies

Purpose The purpose of this paper is to review the literature on Islamic finance vis-à-vis legal and Sharīʿah non-compliance risks in its transactions and judicial dispute resolution in Nigeria. This is with a view to putting forward direction for future studies on the duo of legal and Sharīʿah non-compliance risks and their impact in Islamic finance. Design/methodology/approach This review is designed as an exploratory study and qualitative methodology is used in examining relevant literature comprising of primary and secondary data while identifying legal risk and Sharīʿah non-compliance risks of Nigeria’s Islamic finance industry. Using the doctrinal approach together with content analysis, relevant Nigerian laws and judicial precedents applicable to Islamic finance practice and related publications were examined in determining the identified risks. Findings Undeveloped laws, the uncertainty of Sharīʿah governance and enforceability issues are identified as legal gaps for Islamic finance under the Nigerian legal system. The gaps are inimical to and undermine investor confidence in Nigeria’s Islamic finance industry. The review reveals the necessity of tailor-made Sharīʿah-based regulations in addition to corresponding governance and oversight for a legally safe and Sharīʿah-compliant Islamic finance practice. It brings to light the imperative for mitigating the legal and Sharīʿah non-compliance risks associated with Islamic finance operations as crucial for Islamic finance businesses, Islamic finance institutions and their sustainable development. Research limitations/implications Based on content analysis, the review is wholly doctrinal and does not involve empirical data. Legal safety and Sharīʿah compliance are not to be compromised in Islamic finance operations. The review would assist relevant regulators and investors in Islamic financial enterprises to understand and determine the impact and potential ramifications of legal safety and Sharīʿah non-compliance on Islamic Finance Institutions. Practical implications This study provides an insight into the dimensions and ramifications of legal and Sharīʿah non-compliance risks of Nigeria’s Islamic finance industry. This study is premised on the imperative for research studies whose outcome would inform regulations that strike a balance between establishing Islamic financial institution/business and ensuring legal certainty and Sharīʿah compliance of their operations. This study paves way for this kind of research studies. Originality/value The findings and discussions provide a guide for regulators and researchers on the identification and mitigation of legal and Sharīʿah non-compliance risks in Islamic finance via a literature review. This study, the first of its kind in Nigeria, advances the idea that research into legal and Sharīʿah non-compliance risks of Islamic financial entities is key to mitigating the risks and fostering the entities and their businesses.

Exploring novel Islamic finance methods in support of OIC exports

2016 ◽  
Vol 7 (2) ◽  
pp. 78-92 ◽  
Author(s):  
Ahmet Suayb Gundogdu
Keyword(s):  
Risk Management ◽  
Critical Realism ◽  
Financial Institution ◽  
Islamic Finance ◽  
Export Credit ◽  
Trade Finance ◽  
Content Type ◽  
Existing Structures ◽  
Finance Industry ◽  
Credit Agency

Purpose This paper aims to propose a new Islamic trade finance framework for Islamic financial institution (FIs) to support exports in Organisation of Islamic Co-operation (OIC) countries. Design Methodology Approach: This paper introduces and proposes the recently developed Islamic finance methods of the supplier financing Wakala agreement, restricted Mudaraba and award-winning Export Credit Agency (ECA) export finance structures from the aspects of Shari’ah compliance, efficiency, simplicity for traders and risk management. This paper uses the approach of critical realism. The three-stratum approach is appropriate for Islamic product development, where the real, the actual and the empirical can be observed. Findings: The author argues that the ECA export financing structures, or restricted Mudaraba if preferred, with an embedded supplier financing Wakala agreement can pave the way for Islamic FIs to support exporting companies. It is also concluded that development and support of the Takaful industry are vital for the success of Islamic export financing schemes because of its role in risk management. Originality Value: Although very active in import financing with standard Murabaha contracts, Islamic FIs are still not able to meet the need for financing the expanding exports of OIC countries. Because of the difficulty in developing products that are both efficient and Shari’ah-compliant, export financing is the most controversial issue for the Islamic trade finance industry. Existing or proposed export finance products are heavily criticised by concerned Muslims, as they include bill discounting, akin to factoring in conventional finance. This paper introduces methods aimed at overcoming the inadequacy of existing structures.

scholarly journals THE DETERMINANTS INFLUENCING PERSONAL FINANCIAL BEHAVIOR THROUGH PERSONAL FINANCIAL STRATEGY

2019 ◽  
Vol 4 (2) ◽  
pp. 128-131
Author(s):  
NOOR Hannah Samsu Anuar
Keyword(s):  
Financial Management ◽  
Financial Institution ◽  
Early Adulthood ◽  
Financial Behavior ◽  
Future Research ◽  
Time Data ◽  
Financial Strategy ◽  
Financial Decisions ◽  
The Relationship ◽  
Personal Financial Behavior

Bankruptcy problems among the individuals in Malaysia is still a continuous concern regardless of its decreasing trend. Malaysian Department of Insolvency (MdI) reveals that most of the loan defaulters were consist of the early adulthood group. These individuals portray how do they make financial decisions in terms of budgeting, savings and expenditure. This study aims to understand the patterns of the savings and expenditure habit of the early adulthood in financial institutions. It is found that the early adulthood shows a good conduct of financial behavior, however there are not properly planned and organized in terms of savings. Apart from that, the objective of this study also is to investigate the significant determinants of financial management, financial attitude and normative influencer towards personal financial behavior by exploring the relationship exist between variables through multiple regression analysis. A survey approach using convenient sampling has been adopted to conduct the study and it was distributed among the employees of financial institution in selected branch of Employees Provident Fund (EPF), Inland Revenue Board of Malaysia (IRBM), CIMB Bank and Hong Leong Bank. Imperatively, Cronbach’s alpha and Exploratory Factor Analysis were tested to improve the reliability of the survey. This study is differed from the previous studies as it adopts Statistical Analysis Software (SAS) for each analysis to gain a meaningful result. To further improve on the previous literatures, this study intends to propose a personal financial strategy which is the Balanced Money Formula on managing personal finance concerning to the allocation of monthly income towards budgeting, savings and expenditure in an optimal manner among early adulthoods. Thus, this particular study uses a real-time data that can be used as references for future research and a new theory on exploring and understanding new financial management methods may be achieved.  

scholarly journals EFFECTIVE CRISIS MANAGEMENT FOR ISLAMIC FINANCIAL INDUSTRY AND THE INSTITUTION OF HISBAH: LESSONS FROM GLOBAL FINANCIAL CRISIS

2016 ◽  
Vol 5 (1) ◽  
Author(s):  
Najeeb Zada ◽  
Ahcene Lahsasna ◽  
Muhammad Yusuf Saleem
Keyword(s):  
Financial Crisis ◽  
Moral Hazard ◽  
Crisis Management ◽  
Deposit Insurance ◽  
Global Financial Crisis ◽  
Financial Institution ◽  
Islamic Finance ◽  
Financial Industry ◽  
Finance Industry ◽  
The Global Financial Crisis

The recent financial crisis resulted destructive effects on finance industry. Islamic financial industry (IFI) is still naïve and largely untested in the face of a major financial turmoil. Major issues and uncertainties of the insolvency of IFI include the issue of moral hazard, government bailouts, excessive risk taking and deposit insurance. This paper addresses the issue of crisis management in IFI from the perspective of al-Siyasah al-Shar’iyyah and attempts to derive public policy guidelines that are useful in developing a timely and efficient crises management framework for Islamic finance industry. By using qualitative methods, the study found that the global financial crisis resulted in great destruction of financial institution. Although Islamic finance was quite immune to the global crisis as compared to its conventional peer, concerns still exist. It is time that Islamic finance industry learns from the financial woes of the rest of the world. =========================================== Krisis keuangan baru-baru ini mengakibatkan efek destruktif pada industri keuangan. Industri keuangan Islam (IKI) masih naif dan sebagian besar belum teruji dalam menghadapi gejolak keuangan besar. Isu utama dan ketidakpastian dari kebangkrutan IKI meliputi moral hazard, dana talangan pemerintah, pengambilan risiko yang berlebihan dan asuransi deposito. Makalah ini membahas isu manajemen krisis dalam IKI dari perspektif al-Siyasah al-Shar'iyyah dan berusaha mendapatkan pedoman kebijakan publik yang bermanfaat dalam mengembangkan kerangka kerja manajemen krisis yang tepat waktu dan efisien bagi IKI. Dengan menggunakan metode kualitatif, studi ini menemukan bahwa krisis keuangan global mengakibatkan kehancuran besar bagi industri keuangan. Meskipun keuangan Islam cukup kebal terhadap krisis global dibandingkan dengan keuangan konvensional, kekhawatiran masih ada. Sudah saatnya industri keuangan Islam belajar dari krisis keuangan dari seluruh dunia.

Potential of Islamic finance: A survey of Tunisian Northwest companies

2017 ◽  
Vol 5 (2) ◽  
pp. 28
Author(s):  
Rym Ammar Ayachi ◽  
Dhafer Saidane ◽  
Fayçal Mansouric
Keyword(s):  
Financial Institution ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Finance Development ◽  
Negative Effect ◽  
Survey Results ◽  
Potential Demand ◽  
Northwest Region ◽  
Do So

The present paper aims to assess the Islamic products potential demand for entrepreneurs in the Tunisian Northwest region. In order to do so, we developed a questionnaire which was sent to these entrepreneurs. The survey results show that the latter perceive Islamic Finance as a seductive phenomenon. However, its development appears to be difficult. Indeed, according to the survey results, the lack of knowledge may impede the expansion of Islamic banking in Tunisia. Moreover, the following factors: cost, religious conviction, proximity, flexibility and satisfaction of the needs, may affect the entrepreneurs' choice to deal with Islamic financial institution. In addition, the lack of entrepreneurs' confidence with regard to the compliance of Islamic banking with the Shariah principles has a negative effect on Islamic finance development in the Tunisian Northwest region. For this reason, Tunisian Islamic banks should put more effort to reinforce their competitiveness.

Zakat as a Measure of Social Justice in Islamic Finance : An Accountant’s Overview

2013 ◽  
Vol 1 (1) ◽  
pp. 64 ◽  
Author(s):  
Pranam Dhar
Keyword(s):  
Social Justice ◽  
Islamic Finance ◽  
Poverty Eradication ◽  
The Third ◽  
The Family ◽  
Additional Amount ◽  
Important Form

Zakat is an important form of religiously mandated charity under Islam. It is the third pillar of Islam. The giving of Zakat is important for Muslims, as this leads to purification of their wealth from all sins. This paper examines the role of Zakat as an instrument of social justice and poverty eradication in society. Each Muslim calculates his or her own Zakat individually. Generally, this involves the payment each year of two and a half percent of one's capital, after the needs of the family have been met. One can donate additional amount as an act of voluntary charity but Zakat is fundamental to every Muslim. Zakat is the Islamic contribution to social justice: those who have to give charity share the benefit of their prosperity to those who have fallen short. This is the Islamic approach to remove greed and envy and to purify one's soul based on good intentions. This is the institution of Zakat in Islam. The institution of Zakat serves to eradicate poverty in the community and uphold the light of Islam. Allah says “whatever is paid as Zakat for the sake of Allah shall be rewarded in manifolds”.

General Takaful claims: An experience of Takaful operator in Malaysia

2017 ◽  
Vol 5 (4) ◽  
pp. 18
Author(s):  
Amirul Afif Muhamat ◽  
Mohamad Nizam Jaafar ◽  
Sharifah Faigah Syed Alwi
Keyword(s):  
Life Insurance ◽  
Islamic Finance ◽  
Rigorous Analysis ◽  
Finance Industry ◽  
General Insurance ◽  
Bright Side ◽  
Main Components ◽  
Islamic Insurance ◽  
Gathering Data ◽  
Observation Period

Takaful is interchangeably referred as Islamic insurance. In Malaysia, the takaful sector is part of the main components for Islamic finance industry. The business can be divided into two: general and family takaful. To ease understanding on this niche sector; general takaful is comparable to general insurance while family takaful is akin to life insurance with special reference needs to be given on the requirement of the business to adhere to the Islamic precepts. The main business in general takaful is motor takaful and this line of business is faced with high takaful claims. This study appraised the factors which affect the general takaful claims based on the experience of one takaful operator in Malaysia (the name of takaful operator is not disclosed due to confidentiality). The factors are: number of claims; fraud; and coverage for protection. The limitation of this study is that the observation period is only 10 years which limits rigorous analysis to be done. Nevertheless, previous studies in this area depict the same limitation – constraint in gathering data that has long observation period. On the bright side, the data in this study is still capable to produce meaningful results to be referred with regards to this issue – general takaful claims.

Religiosity, Neglected Risk and Asset Returns: Theory and Evidence from Islamic Finance Industry

2019 ◽  
Author(s):  
Saad Azmat ◽  
Haiqa Ali ◽  
A. S. M. Sohel Azad ◽  
M. Kabir Hassan
Keyword(s):  
Asset Returns ◽  
Islamic Finance ◽  
Finance Industry
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