Status and implications of promise (wa’d) in contemporary Islamic banking

Wa’ad or promise refers to undertaking by one party to do or not to do certain actions in future. Unlike a normal contract or `aqd, the rules governing wa`ad are less stringent as it is merely a promise thus is not binding. Under Shari’ah, due to the unilateral nature of the promise, the details of it are not as carved in stone as any other contract. The details such as time of delivery, the price, terms of payment and goods specific description are not as strict as applied in other contracts. Because of its flexibility, the wa’ad is now being noticed as a key alternative in structuring a lot of substitute products of a conventional bank. It is expected that the contract will grow more prominent in the next few years as demand for easy and flexible products increased. This paper, therefore attempts to analyze the status of promise from both Islamic and common law perspectives. Some illustrations of contemporary financial products structured based on wa`ad principle are discussed to shed some lights in understanding the issues surrounded the practice

The Impact of Islamic Banks in Financing MSMEs in Serang City : Dampak Bank Syariah Dalam Pembiayaan Umkm Di Kota Serang

This study aims to determine the impact of BSM in financing MSMEs in Serang City. The impact of BSM in financing MSMEs in Serang City is currently focused on providing business capital and business assistance. To what extent does Serang Branch BSM play an active role in empowering the community's economy in increasing the business of micro customers by continuing to provide capital financing for entrepreneurs who have prospects and meet the requirements in applying for financing The research method used is qualitative research by collecting data. The results of the study found that the factors that influence BSM in financing MSMEs in Serang City are seen from the types of products that are in demand where people's business loans are used as financing that helps small and medium enterprises in running their busines

Takaful: an ideal alternative for women

This paper is motivated by the present facts, that women play significant and extensive roles that are not confined to their traditional household duties. This is partly due to increasing financial demands as the definition of families’ essential needs has expanded. The rising cost of living has made surviving and building a family on a single income near to impossible. Therefore, women are forced to take on some of the financial burdens in the management and maintenance of a household, in addition to their core responsibilities as wives and mothers. To perform these multi-tasking responsibilities, they have to be very wise, energetic and efficient

Islamic hire-purchase in Malaysian financial institutions : a comparative analytical study

Islamic hire-purchase (Ydrah wa-iqtind) is one of the latest innovative products of Islamic banks designed to meet the current demand and avoid certain risks in the financing of consumer durables and motor vehicles. No wonder, this transaction is not acknowledged in the classical jurisprudence, but contemporary scholars have developed its structure through a careful combination of Yarah and sale contracts. In Malaysia, this concept refers to AI-Ijdrah Thumma Al-Bay'(AITAB) and it has grown in popularity and continuously expanded partly due to the heightened demand by customers. Since its first inception more than 10 years ago, AITAB has been governed by the Hire-Purchase Act 1967 (HPA), but HPA has received much criticism amongst the practitioners and Shadah experts, who assert the insufficiency of HPA to govern the AITAB transaction when dealing with Shadah issues. Consequently, Mu'amalah Hire-Purchase Bill has been proposed to the Malaysian government to overcome certain limitations of HPA. This study aims to examine the Islamic hire-purchase operation and its regulatory framework in Malaysia. Thorough examination and analysis would help identifying potential strengths and weaknesses inherent in the HPA and how the proposed Bill could provide remedies to various impediments, and offer an alternative regulation to govern the Islamic hire-purchase transaction. To illuminate our understanding of the actual operation of Islamic hire-purchase, this study incorporates in-depth interviews together with a questionnaire survey. A total of 46 in-depth interviews have been conducted on Islamic bankers, SharVah advisors, Shadah scholars, economists, legal experts and government officers. This is further complemented by a country-wide questionnaire survey successfully obtained from 203 customers, aiming at eliciting their perceptions and expectations towards Islamic hire-purchase products. The combination of theoretical discussion on Islamic hire-purchase together with the empirical surveys using both qualitative and quantitative methodology have proved to yield a valuable insight into the revaluation of the Malaysian regulatory system of AITAB. The findings of this study reveal the need to incorporate SharTah principles into the existing Hire-Purchase Act 1967, instead of establishing an independent SharTah law to govern the Islamic hire-purchase operation. It also reveals that customers of Islamic financial institutions in Malaysia have positive views of ArFAB.EThOS - Electronic Theses Online ServiceGBUnited Kingdo

Ownership of Takaful Benefit in Family Takaful in Malaysian Takaful Practice

The paper aims to identify the issues on the ownership of takaful benefit in family takaful in Malaysian takaful practice. The study only focuses on the family takaful plan because it is related to death. The question might be raise in this study in determining the money paid by the takaful operator on the death of the participant before the policy matures belong to the participant’s estate or not. It is important to identify this issue distinctly as to ensure the five norm of maqasid al- Shari’ah which are religion, life, family, intellect and property is well preserved and protected. This study adopts qualitative approach with SharÊÑah advisors, Shari'ah officers and a takaful expert in Kuala Lumpur and Selangor area. Data collection employs semi-structured interviews with a fairly open framework which allow for focused, conversational and two-way communication. The results revealed that, no doubt to say the property (maal) can be treated as takaful benefit. With regards to the issue of ownership, takaful benefit is owned by the participant in two ways; firstly from Participant Investment Fund (PIF), while secondly from Participant Risk Fund (PRF). The paper offered a clear picture on the understanding of ownership and tak?ful benefit in its definition, classifications, relation between ownership of tak?ful benefit and opinion towards the application of takaful in Malaysia. Therefore, at the same time, provide some recommendations for standardizing the nomination practice in the takaful industry