Recent Submissions

Now showing 1 - 6 of 170
  • Publication
    The impact of zakat collection and distribution on asnaf entrepreneurship programme under Lembaga Zakat Selangor (LSZ) (Selangor, Malaysia)
    Nurulhuda Binti Haron; Magda Ismail Abdel Mohsin (INCEIF, 2023)

    This study provides a comprehensive examination of zakat collection and distribution mechanisms within the framework of Islamic finance. Zakat, as a pillar of Islamic economic and social justice, plays a vital role in wealth redistribution and the alleviation of poverty. The research delves into historical perspectives, legal frameworks, and contemporary practices associated with zakat collection. Mechanisms such as traditional methods and modern technological innovations are explored, assessing their efficiency and transparency. Challenges in the collection process, including evasion and mismanagement, are identified, and potential solutions are discussed. The study also analyzes the impact of zakat distribution on targeted beneficiaries, emphasizing its social and economic implications. Case studies from various regions are presented to highlight successful models and lessons learned. The research concludes with insights into emerging trends and recommendations for enhancing the effectiveness of zakat collection and distribution in promoting social welfare and community development within an Islamic finance context.

  • Publication
    The potential of Jamiah takaful model for the economically distressed in Saudi Arabia: a community solution
    Jihad Omar Ahmed Basuwaidan; Ziyaad Mahomed (INCEIF, 2023)

    The study investigates the repercussions of the COVID-19 pandemic and presents an alternative to traditional banking financing products through socially driven solutions. Acknowledging the challenges brought forth by the pandemic, the research delves into exploring and recommending alternative financial avenues grounded in community-centric models. This method not only tackles the changing financial terrain but also underscores the viability of community-driven approaches as substitutes to conventional financing systems. In particular, the study assesses the efficacy of social-driven financial products like Jamiah Social Takaful in providing a resilient and all-encompassing response to the financial uncertainties heightened by the global health crisis. The study draws a distinction between commercial takaful and social takaful as well as discussing the importance of qard hasan as an Islamic social financial tool in addressing social challenges. This study further delves into how Jamiah Social Takaful aligns with Shariah principles and social Takaful principles. Putting emphasis on the significance of qard hasan, a benevolent loan, the model aims to furnish interest-free financial solutions for legal disputes. The research accentuates that, unlike commercial takaful models, Jamiah Social Takaful concentrates on interest-free and benevolent aspects, fostering community, sustainability, and financial well-being without compromising Islamic principles and wider application to various segments in the society. In conclusion, the research underscores the importance of Jamiah Social Takaful in fortifying financial fabric, stimulating Shariah-compliant innovation, and cultivating a culture of responsible and ethical financial practices. The establishment of supportive policies and regulations can play a pivotal role in fostering the growth and success of the Jamiah Social Takaful model. Creating an enabling environment for economically distressed individuals to thrive requires aligning regulatory frameworks with the distinctive features and objective of the Jamiah Model and Takaful, simultaneously fostering innovation and offering essential support for sustainable and socially impactful initiatives. The realization of Jamiah Social Takaful's success is contingent on a regulatory landscape that acknowledges and nurtures the positive societal impact of such initiatives.

  • Publication
    Can Islamic social finance structure support Sustainable Development Goals target funding
    Dela Arundina; Ziyaad Mahomed (INCEIF, 2023)

    The alignment of the United Nations' Sustainable Development Goals (SDGs), introduced in 2015, with the objectives of Maqasid Shariah, particularly in the realms of poverty alleviation, hunger eradication, and enhancing well-being, forms a critical intersection in the context of Islamic social finance (ISF). This congruence lays the groundwork for leveraging Islamic financial practices, such as zakat, to support achieving SDG targets in Indonesia. Effective collaboration between key Indonesian entities, such as Bappenas (the Ministry of National Development Planning) and BAZNAS (the National Zakat Agency), is imperative for this integration. Clear and specific regulations are essential to guide this process, ensuring that zakat practices are aligned with and actively contribute to the SDG targets. Leadership from the highest governmental levels, especially from the President, is pivotal in this context. Such leadership ensures that the efforts to achieve the SDGs are in harmony with Indonesia's unique religious values and socio-economic priorities. The recent legal developments, like Presidential Regulation 112 of 2022, demonstrate a commitment to supporting these endeavors. These legal frameworks provide a structural basis for integrating ISF with SDGs, offering guidelines and formal recognition of this collaborative approach. The study delves into the relationship between ISF and the SDGs, exploring how ISF can support achieving these global goals. It examines how ISF can facilitate this support, relying on qualitative research methods such as interviewing critical leaders in ISF and SDG implementation. These interviews provide valuable insights into the perceptions and strategies of those at the forefront of these sectors.

  • Publication
    Enhancing liquidity risk management for Islamic banks in the West African Economic and Monetary Union (WAEMU): issues and challenges for as Shariah compliance framework
    Ahmadou Alhaminou Lo; Tariqullah Khan (INCEIF, 2023)

    Establishing a Shariah compliant liquidity risk management framework for Islamic banks in the West African Economic and Monetary Union (WAEMU) is fundamental for the development of the industry, 40 years after the licensing of the first Islamic bank in the Union. This paper provides a gap analysis of the current liquidity management framework of BCEAO, the central bank of WAEMU s member countries, focused exclusively on conventional banks activities. Institutional and operational challenges of a secular jurisdiction to fully comply with AAOIFI and IFSB standards regarding liquidity deploying and liquidity absorption, are highlighted alongside with the constraints for the establishment of a well-functioning Islamic interbank money market. After a review of the practices in mature Islamic finance jurisdictions (Malaysia, Bahrain, Indonesia and Pakistan) and in a secular jurisdiction like the United Kingdom, the paper identifies the relevant tools to manage these challenges. Finally, guidelines are proposed to establish a suitable risk management framework for Islamic banks in the WAEMU countries, in particularly the provision of a Shariah Lender of Last Resort mechanism in BCEAO s regulations and the creation of an Islamic interbank money market. This paper is hoped to accelerate the on-going work since 2012 within BCEAO and the regional Securities and Exchange Commission (AMF-UMOA), to promote the development of Islamic finance in the region with the technical assistance of the Islamic Development Bank.

  • Publication
    Exploring the barriers to corporate sukuk issuance in Nigeria
    Aminat Damilola Ibraheem-Dakeje; Aishath Muneeza (INCEIF, 2023)

    The global phenomenon of sukuk as an alternative means of financing infrastructure development has gained significant momentum in recent years, with impressive growth in both sovereign and multilateral issuances, as reported by Fitch Ratings in 2023. African nations, including Nigeria, are not lagging in exploring sukuk to address their extensive infrastructure funding needs. While Nigeria currently hosts the largest sukuk market in Africa, it represents only a fraction of the global sukuk value. Interestingly, corporate sukuk issuances in Nigeria have seen limited growth, with only two companies venturing into this market. The objective of this study is to uncover the corporate sukuk issuance process in Nigeria and also identify the challenges causing the low penetration of the sukuk market by companies in the country. This study adopts both the primary and secondary sources of data collection process by interviewing primary stakeholders in the Nigerian sukuk market and also reviewing existing literatures on the subject. Findings reveal key challenges to be lack of investors confidence, intense documentation and Shariah requirements among others. Furthermore, the author observes that high issuance cost and restriction on the use of proceeds are major barriers to sukuk issuances by companies in Nigeria. It is recommended that the government should introduce more incentives such as tax incentives to reduce issuance costs thereby attracting more corporate involvement in sukuk issuances. Further, the core regulatory agencies should consider creating a special regulatory window suitable for small and medium-sized enterprises to access financing through the use of sukuk.

  • Publication
    The impacts of digitalization and economic growth on credit risk and profitability: a comparative study of Islamic banks and conventional banks
    Ahmed Abdulrahman Nkoba; Kinan Salim (INCEIF, 2022)

    The focus of this study was to establish the impact at which economic growth and digitalization independently affect the profitability and the credit risks of commercial banks, and furthermore to assess whether Islamic banks or conventional banks are more impacted with each aspect. I employed an unbalanced panel data consisting of 139 commercial banks, both Islamic and conventional banks. The period covered by the study spanned for 14 years between 2001 to 2014 and incorporated banks for 9 out of the 10 countries that are pioneers in Islamic banking with 95% of all the Islamic bank estimated the panel data using dynamic panel models employing. Generalized methods of moments (GMM). I find that economic growth impacts the profitability of commercial banks negatively and Islamic banks are significantly less impacted in this regard and likewise economic growth exhibited a positive relationship with the credit risk of Islamic banks more than that of conventional banks. With regards to digitalization, I found it to be surprisingly inversely related to both profitability and credit risks of commercial banks with Islamic banks facing more impact of the same. The results presented in the study have significant policy implications to academicians, policymakers, international bodies as well as governments.