IJIEF: International Journal of Islamic Economics and Finance
ISSN : 26223562     EISSN : 26224372
International Journal of Islamic Islamic Economics and Finance (IJIEF) is a journal which is bianually issued (January and July) and initiated by International Program for Islamic Economics and Finance (IPIEF). The publisher of this journal is Universitas Muhammadiyah Yogyakarta. The publication of this journal though tighly-peer reviewed process using Open Journal System (OJS). For the publication, IJIEF only accept research article and publish it in electronic (PDF) version. The electronic publication can be accessed openly on the website http://journal.umy.ac.id/index.php/ijief/index. IJIEF commit to embrace the best research article in islamic economics and finance fields from the whole world and publish it consistently.
Articles 12 Documents
PROMOTING A SHARING ECONOMY IN THE ISLAMIC FINANCE INDUSTRY: A STUDY OF SELECTED OIC COUNTRIES

Razak, Dzuljastri Abdul ( Department of Finance, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia (IIUM) ) , Abdul-Wahab, Abdul-Hamid ( International Islamic University Malaysia )

International Journal of Islamic Economics and Finance (IJIEF) Vol 1, No 1 (2018): IJIEF Vol 1 (1), July 2018
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Original Source | Check in Google Scholar | Full PDF (1115.101 KB) | DOI: 10.18196/ijief.114

Abstract

Islamic finance has been in existence for the past centuries. Nonetheless, the realization of the real objectives of the industry is still a dream yet to be true. The goal of Islamic finance is to promote a sharing economy whereby money is not concentrated in the hands of a few individuals. This purpose of this study is to investigate the application of mudarbah and musharakah concepts which facilitate a sharing economy where profit and loss is shared between the bank and customer compared to debt financing that utilizes murabahah concept. The methodology is based on secondary data obtained from central banks of five selected OIC countries. The results indicated that Indonesia, Sudan and Bangladesh recorded the highest amounts in terms of mudarabah financing while Malaysia, Indonesia and Pakistan recorded the highest amounts in terms of musharakah financing. The results also indicated that murabahah financing is high in Malaysia, Bangladesh, Indonesia and Sudan. Pakistan registered the lowest amount in terms of murabahah financing. 

ISLAMIC GOLD DINAR: THE HISTORICAL STANDARD

Meera, Ahamed Kameel Mydin ( International Islamic University Malaysia )

International Journal of Islamic Economics and Finance (IJIEF) Vol 1, No 1 (2018): IJIEF Vol 1 (1), July 2018
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Original Source | Check in Google Scholar | Full PDF (958.673 KB) | DOI: 10.18196/ijief.116

Abstract

Lately, there have been questions on what the standards for gold dinar and silver dirham should be.  Since the dinar and dirham indeed formed the Shari’ah monetary standards from the time of the Prophet pbuh, our work can, therefore, only involve in the rediscovery of that classical standard.  Henceforth no parties or organizations can come up with their own standards. Since the Islamic gold dinar[1] did not come into existence until about 50 years after the Prophet’s pbuh demise, it is obvious from history that the solidus of the Eastern Roman Byzantine Empire was the monetary basis for the Shari’ah.  Hence the best way to determine the standard is to look at the definition given by its issuer, the Byzantine Empire.  Coins unearthed by archeologist cannot be relied upon for this purpose because such coins generally suffer from wear and possible tempering like clipping etc.  It was found that the actual historical standard for the dinar to be 4.5gm of pure gold and the dirham to be 3.15gm of pure silver.  However, since the role of dinar is simply as a measure of value that depends on the gold-content of the coin and if zakat is based upon 1-year’s provision of foodstuff and not the physical weight of dinars, then the 4.25gm dinar of pure gold and 2.975gm dirham of pure silver, as those circulated during the Prophet’s pbuh era, is the standard since the Prophet had said, “The system of weights and measures is the system of the people of Medina. 

MICROFINANCE-ECONOMIC GROWTH NEXUS: A CASE STUDY ON GRAMEEN BANK IN BANGLADESH

Amin, Md. Fouad Bin ( Kind Saud University ) , Uddin, Shah Jalal ( Ohio University )

International Journal of Islamic Economics and Finance (IJIEF) Vol 1, No 1 (2018): IJIEF Vol 1 (1), July 2018
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Original Source | Check in Google Scholar | Full PDF (1066.663 KB) | DOI: 10.18196/ijief.112

Abstract

Microfinance is one of the fastest growing sectors in Bangladesh and in many parts of the world. Over the last few decades, this sector has been supportive in achieving various socio-economic goals in Bangladesh. The country has made remarkable progress in sectors like education and health, and most importantly it has contributed significantly in poverty alleviation. Although the microfinance mostly concentrates at the micro level, it has direct effect on the macro economy.  A forefront Microfinance provider like Grameen Bank has been playing a key role for the socio-economic wellbeing of the people living in the rural areas as well as for the economic development of rural economy. This study aims to investigate the long run dynamic relationship among its loan financing and clients’ deposit and economic growth in Bangladesh. By considering annual time-series data of these variables, a widely used cointegration test and Granger’s causality test have been applied to examine the long run relationship among these variables. The result shows that both financing and depositing aspects of Grameen Bank have positive effect on economic growth of Bangladesh in the long run. It is recommended that Grameen Bank should allow its operations without any external pressure for the sake of sound economic growth of the country. 

EXPLORING THE CHALLENGES OF CONVENTIONAL BANKING PRACTICES AND PROSPECTS OF INTRODUCING AN ISLAMIC BANKING IN TAJIKISTAN: USING QUALITATIVE APROACH

Sharofiddin, Ashurov ( College University Insaniah ) , Idris, Ahmed Fauzi Bin ( College University Insaniah ) , Othman, Anwar Hasan Abdullah ( International Islamic University Malaysia )

International Journal of Islamic Economics and Finance (IJIEF) Vol 1, No 1 (2018): IJIEF Vol 1 (1), July 2018
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Original Source | Check in Google Scholar | Full PDF (922.305 KB) | DOI: 10.18196/ijief.111

Abstract

The purpose of this research is to explore the challenges of current banking practices in Tajikistan and investigate the prospects of introducing the new Islamic banking system. In which the Islamic banking may help in bring back the trust to the people for dealing with the banking system that will lead to enhance the economy growth. This study applied the qualitative method by conducting in depth interviews with the experts comprising seven respondents. The result of respondents showed that there is list of challenges that current banking practices facing in Tajikistan. This therefore encourage for introducing an Islamic banking system in Tajikistan. Among the challenges in Conventional Banking system that respondents identified are distrust, an interest-based (Ribâ) system, and long processes with complicated systems. This is because the listed challenges by respondents are crippling the entire banking system, if the authority is not concerning for catering the existed challenges. Moreover, the findings signify the challenges of conventional banking practice that the authorities of the country and practitioners must avoid when Islamic banks are established. In addition, the practitioners need to focus on improving the current banking practice to avoid the challenges identified in the study.

PROPOSING AWQAF ALTERNATIVE PLAN (AAP): THE WAY FORWARD & SUSTAINABLE HIGHER EDUCATION FINANCIAL SYSTEM

Pitchay, Anwar Allah ( Universiti Sains Malaysia ) , Abdul Rahman, Mohd Najwadi Yusoff ( Universiti Sains Malaysia ) , Thaker, Mohamed Asmy Mohd Thas ( International Islamic University Malaysia ) , Azhar, Zubir ( Universiti Sains Malaysia ) , Mydin, Al Amin ( Universiti Sains Malaysia ) , Jalil, Mohamad I’sa Abd ( University Malaysia Sabah )

International Journal of Islamic Economics and Finance (IJIEF) Vol 1, No 1 (2018): IJIEF Vol 1 (1), July 2018
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Original Source | Check in Google Scholar | Full PDF (728.213 KB) | DOI: 10.18196/ijief.113

Abstract

The future direction of the public university is to self-sustained due to the inconsistency of the national economic growth. For example, reduced in the national income has forced the Malaysian government to cut the allocation of funds to various ministries’ in 2016 compared to 2015 budget. The consequences of this phenomenon the government has reduced the allocation of budget to Ministry of Higher Education, which is cut by RM2.4 billion, from RM15.78 billion in 2015 compared to RM13.37 billion in 2016. This scenario has imposed various challenges to many public universities’ management to manage university expenses and explore new avenue to generate income. There are various ways to generate income and we find most of the tertiary education in Malaysia is not able to practice effective management especially in managing the cost of organizing a program. For example, food and beverages (F&B) spend by the university during events are not effective and most of the time is wasted. This argument is developed based on the observation and also supported by an informal interview with a vice-chancellor (VC) of one of the public university in Malaysia. The VC do agree that the university management needs to find a solution to overcome the issue of wastage due to the forecasted cost rather than an accurate cost to organize a university’s events. Therefore, we believe that the main issue faced the university’s management is to identify an exact number of participants and etc. Thus, the current practice is based on the forecasted estimation rather than accurate estimation. Therefore, to solve this problem, the present study aims to provide an opportunity to the tertiary education in Malaysia which able to estimate an accurate cost and at the same time able to create waqf fund using effective fund management approach by proposing awqaf alternative plan (AAP) model. The proposed model is expected to generate Waqf fund and eliminate wastage management practice. 

BUILDING THE INDEX OF RESILIENCE FOR ISLAMIC BANKING IN INDONESIA: A PRELIMINARY RESEARCH

Arumsari, Fanny ( Universitas Muhammadiyah Yogyakarta ) , Wiranatakusuma, Dimas Bagus ( Universitas Muhammadiyah Yogyakarta ) , Ahmad, Abu Umar Faruq ( Universiti Brunei Darrussalam )

IJIEF: International Journal of Islamic Economics and Finance Vol 1, No 1 (2018): IJIEF Vol 1 (1), July 2018
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Original Source | Check in Google Scholar | Full PDF (1659.616 KB) | DOI: 10.18196/ijief.v1i1.4692

Abstract

The 2007-2008 global financial crises had brought severe financial instability in financial institutions, and since then it became more complex and irreparable. Therefore, it has become inevitable to examine various tools that can monitor resilience of these financial institutions, especially the banking system that plays significant role in economic development of a country. Although Islamic banking operates in the same financial environment, its distinguishing features and fundamental differences demand different treatment in building resilience. The scope of existing literature of banking surveillance tools is either to some extent, mostly limited to banking sector in general, or  it is dominated by partial developments. Hence, there is a significant gap that lies in the literature to address the specificity of Islamic and conventional  banking surveillance tools analysis to build resilience that can contribute to reduce the span of financial instability in a country. This study seeks to explore to fill in this gap in Indonesian jurisdiction. The study finds that optimum resilience level of Shari`ah banking in Indonesia exists in specific range as a result of the contribution that is made by each and  every indicator. The study also attempts to find a way to trace some indicators that could effectively contribute to prevent the instability of Shari`ah compliant banking system in Indonesia.Keywords: Shari`ah banking, resilience, index, Islamic banking, Indonesia

Awareness and Perceptions of Muslim Society towards Islamic Banking in the Philippines

Hadji Latif, Sahraman D. ( Lecturer, Department of Economics, Mindanao State University, Marawi city ,Philippines )

International Journal of Islamic Economics and Finance (IJIEF) Vol 1, No 2 (2019): IJIEF Vol 1 (2), January 2019
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Original Source | Check in Google Scholar | Full PDF (878.095 KB) | DOI: 10.18196/ijief.1211

Abstract

The aim of this study was to determine and analyse the level of awareness and perceptions of Muslim society  towards Islamic banking in the Philippines.Self-structured questionnaires were administered and distributed to 70 employees of some selected offices of the Mindanao State University (MSU), Marawi City and the data were processed and analyzeddescriptively.The results revealed that most of the respondents are aware of the existence of the Al-Amanah Islamic Investment Bank of the Philippines and that interest and uncertainties are prohibited in all forms of business transactions including in Islamic banking. Conversely, they are not aware of Islamic banking products and services and its modes of financing such as musharakah, mudharabah, murabaha and Ijaraah. Furthermore, the study found that most of the respondents perceived that Al-Amanah Islamic Investment Bank of the Philippines has not done enough to promote and market its products and service to the public. The problem of peace and order, and the lack of emphasis placed on the importance of Islamic banking in the country have affected its development.  The study also indicated that majority of respondents believed that Islamic banking has a potential positive future in the Philippines. Hence, promotion through policies and marketing strategies is necessary in strengthening Islamic banking in the country. 

Investigating Fairness in Transactions: Evidence in Belief Systems

Mohamed, Hazik ( Stellar Consulting Group )

International Journal of Islamic Economics and Finance (IJIEF) Vol 1, No 2 (2019): IJIEF Vol 1 (2), January 2019
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Original Source | Check in Google Scholar | Full PDF (931.954 KB) | DOI: 10.18196/ijief.1.2.5405

Abstract

Fairness is one of the central institutional pillars of Islamic law, and its inherent legal framework dictates, among other things, clarity and ethical behaviors in all our endeavors. Righteous behaviors form the foundation of fairness and justice. This paper attempts to address deep religious understanding in human behavior for fairness and justice so as to use religious values in productive economic behaviors, like the sharing risk and benefits in mutual agreements.The methodology of this study assesses the behavior of the subject pool (players representative of Muslims and non-Muslims) through the Ultimatum Game that was designed to test fairness and experiment in decision-making to measure fairness in economic transactions and to observe the level of religious-specific acceptance norms. This paper provides an actual behavioral investigation into how people (Muslims and non-Muslims) behave in real life, whether it is in accordance to what their religion prescribes to them or otherwise. In terms of fairness in contracting, non-Muslims performed a little bit better than Muslims but there were significant differences between the primed and unprimed subjects in the Muslim and non-Muslim groups where it was positive for the Muslim group and negative for the non-Muslim group.

The Efficiency of Indonesian Islamic Rural Banks: A Stochastic Frontier Analysis

Agustina, Dian ( Universitas Gadjah Mada ) , Sholihin, Mahfud ( Universitas Gadjah Mada ) , Fithria, Annisa ( Universitas Ahmad Dahlan )

International Journal of Islamic Economics and Finance (IJIEF) Vol 1, No 2 (2019): IJIEF Vol 1 (2), January 2019
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Original Source | Check in Google Scholar | Full PDF (916.062 KB) | DOI: 10.18196/ijief.1212

Abstract

Banking plays an important role in economy acting as an intermediation institution and funding sources for business. When a bank is inefficient in the use of cost, there will be improperly used input, hindering the bank to realize its roles, functions, and objectives. Therefore, analysis of bank efficiency is strongly required. This study aims to measure and analyze the technical efficiency of Indonesian Islamic rural banks by using balanced panel data of Indonesian Islamic rural banksfromquartile I 2011 to quartile IV 2016. The sample includes 58 Islamic rural banks with total 1,392 observations. By using stochastic frontier analysis,the result shows that the average technical efficiency of IndonesianIslamic rural banksreached 86 percent and there are still 14 percent that can be optimized. Overall, the average efficiency of Indonesian Islamic rural banksincreases over the research period. In addition, this study also finds that big banks are more efficient than small banks.

Analysis of E-Banking Acceptance in Oman: The Case of Islamic Banks’ Customers

Echchabi, Abdelghani ( Higher Colleges of Technology ) , Al-Hajri, Salim ( College of Business Administration, A’sharqiyah University ) , Tanas, Islam Nazier ( Department of Business and Management, Westcliff University )

International Journal of Islamic Economics and Finance (IJIEF) Vol 1, No 2 (2019): IJIEF Vol 1 (2), January 2019
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Original Source | Check in Google Scholar | Full PDF (1117.008 KB) | DOI: 10.18196/ijief.128

Abstract

The main objective of this study is to examine the factors that influence the customers’ intention to adopt E-banking services in Oman across the Islamic Banking sector. This research endeavours to assess the willingness of the Islamic banks’ customers to adopt these services rather than the traditional banking methods. Accordingly, a sample of 300 Islamic banks' customers were surveyed in different districts of Oman. Afterwards, linear regression and one sample t-test were utilized in order to analyse the gathered data. The findings showed that customers have high tendency of embracing and utilizing E-banking services as opposed to the conventional services. Additionally, the results revealed that relative advantage, self-efficacy, ease of use, and facilitating conditions are the fundamental factors that impact the selection of E-banking by Islamic banks' customers in Oman. However, uncertainty had no significant effect on the intention of Islamic banks’ customers to use E-banking services. These findings would significantly contribute to the theory, and the way that Islamic banking sector would be practiced and regulated.

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