Measuring Financial Knowledge Among Muslim Women: The Case of Indonesia and Malaysia

Financial literacy is taking an important role in supporting the development of women's empowerment. To determine the action for financial education for women, the level of financial literacy among women is needed to be observed. This study aims to measure the level of financial knowledge among Muslim women in Indonesia and Malaysia. A quantitative method of study is employed by distributing 411 questionnaires that consists of Islamic financial knowledge and general financial knowledge questions. As the sample of this study focuses on women in Indonesia and Malaysia, the findings of this study could not be generalized to other Muslim women in other countries. The research found that Muslim women in Indonesia and Malaysia have a moderate Islamic and general financial knowledge level. Several areas of weaknesses found in this study are; the understanding of the role of parties in mudharabah contract, knowledge on zakat, and the simple time value of money calculation. These three areas of weaknesses could be emphasized in the financial education program

A Distributionally AI Robust Islamic Portfolio Approach- A Case Study of The Impact of Sanctions on The Incorporation of Chinese Stocks into Islamic ETF

Sanctions have long been utilized as a form of forcing the sanctioned countries and entities to change their course and conform to the objectives of the sanction imposing country or entity. Sanctions have been primarily used for trade embargoes and restrictions on the types of goods and services that can be exported from a specific country. Financial sanctions have been instituted primarily in the last century, given the growing importance of the international financial system and interconnection between countries. Furthermore, the role of the US Dollar as the international reserve currency, combined with its extraterritorial legal aspect and the prevalence of US institutions to facilitate cross-border transfers, has made financial sanctions an attractive tool of international coercive action. While the effectiveness of financial sanctions is debatable, they have still been attractive for many nations to be employed. The United States and China have experienced considerable disagreements with respect to their view on trade terms and the exchange of information. This has led to the sanctioning of several businesses by the United States and even forced some corporations to delist from US exchanges. For investors, this poses a significant risk as corporations may be required to delist, which will lead to significant losses. We present a distributionally robust optimization framework for the optimal Islamic portfolio when taking into account the risk of sanctions. The key feature of the framework is that it both integrates Islamic values in addition to ensuring robustness against the impact of possible sanctions. The results demonstrated that the investments are within a limited number of enterprises in order to avoid potential significant downside risks related to sanctions. The framework and study represent an important step towards greater risk assessment of sanctions-related effects on Shariah-compliant portfolios and safeguarding the returns of Islamic ETF investors. This contributes significantly to maintaining Shariah principles that focus on value investment and reduce the risk of fund managers engaging in gambling risks to drive returns

An Innovative AI Blockchain Framework for Islamic Microfinancing

The digital economy has undergone significant transformations with blockchain becoming a household name in the fintech environment. Besides powering cryptocurrencies, blockchain technology enables power transactions in a variety of forms and enables decentralization which may reduce transaction costs. Islamic microfinance has become important with many new institutions arising in order to satisfy the demand for microfinance services while ensuring that these services comply with the Shariah Law. Cost of transactions and low degree of digitalization are the major obstacles with current solutions. We present an innovative blockchain artificial intelligence framework for the optimization of Islamic microfinance service provisioning as well as providing financial and transaction services in order to ease transactions and make them more secure and readily available. The framework was evaluated on a large dataset from the Central African Republic, and we could demonstrate strong performance of the AI-blockchain framework. The framework provides a viable solution for Islamic microfinancing to enhance transactions services and overcome some of the existing challenges with Islamic finance

Evaluating Sukuk Default Factors: A Case Study on Dana Gas Sukuk in the UAE

In the last couple of years, the Islamic finance industry was rocked by several sukuk defaults, the most prominent among them being Dana Gas Sukuk. These defaults led to hordes of questions related to Shariah governance, unstandardized legal documentation, Shariah non-compliant structure, lack of intent and transparency, incongruence in governing laws, and a lack of regulatory support. This paper assesses Dana Gas Sukuk by conducting a qualitative analysis to determine the circumstances that led to the failures of this sukuk. Using secondary sources this paper employs a content analysis method and scrutinizes the sukuk understudy with a special focus on its structure, governance mechanism, and legal jurisdiction. Thus, the study suggests standardizing the legal documentation and Shariah interpretation of the Islamic capital market, as it would reduce the risk of Shariah non-compliance and remove all the uncertainty and ambiguities and would help to avoid such sukuk default. Finally, it can be asserted that an attempt is made to offer some recommendations that hopefully will avert similar defaults in the future and help the Islamic finance industry to achieve greater standardization and clarity

The Principle of Tadarruj in Islamic Finance: A Conceptual Review

Even though Islamic finance industry has been recognized among the promising sectors in the world, it is claimed that the modern financial environment is not too conducive to its progress. In fact, Islamic financial institutions have experienced various challenges, risks and restrictions in their operation. To adapt Shari’ah rulings into modern financial system, this effort must be carried out gradually. In this regard, this paper aims to explore the principle of tadarruj (gradual) and its application within Islamic finance. Since this is a conceptual research, it is based on document analysis. It is found that the element of tadarruj can be learned from the prohibition of riba at the time of revelation. In modern time, it seems that this principle has been considered in Islamic banking development in Malaysia, one of among progressive countries in this industry. Since this paper provides a philosophical perspective over the concept of tadarruj, it may be useful for all Islamic finance players including regulators, practitioners, and scholars, particularly to introduce new policies, to develop products and to expand the operation of Islamic finance industry

Halal Financing in the COVID-19 Pandemic: Analysis of Rukhṣoh on Halal Transactions

Halal (permissible) covers wājib, mandūb, mubah, and makrūh categories in the rulings of Islamic jurisprudence based on the personal situation of the subject matter. The outbreak of COVID-19 across the globe has triggered the quest for the scope of halal financing and management. Does the pandemic situation is enough justification for allowing financing of some non-permissible activities? This study aims to explore the principles of Rukhṣoh in Islamic jurisprudence and its implication on the scope of funding halal transactions amidst the COVID-19 pandemic. This study is mainly qualitative-based research. The study employs a doctrinal approach in exploring the principles of Rukhṣoh and Azīmah and their contemporary application to the scope of halal financing in the context of COVID-19. The study identifies the general scope of halal (permissible) within the contexts of wājib, mandūb, mubah, and makrūh. The result further suggests that even though Haram (forbidden) might be granted the Rukhṣoh based on specific circumstances, the Islamic jurists differ in giving it the equal status within the halal scope except that there is a waiver of punishment on the Mukhalaf (accountable person). The study out that many people might have violated contractual obligations because of the COVID-19 pandemic. Thus, Islamic financial institutions should apply the Quranic inunction of "If the debtor is in difficulty, grant him time till it is easy for him to repay. But suppose ye remit it by way of charity. In that case, that is best for you if ye only knew" [Al-baqarah: 280] as respite and benevolence on loans to promote financial recovery of Muslim economy in the pandemic. Although there are studies on halal financing, this study is a novel contribution to the contemporary application of the concept of Rukhṣoh and Azīmah to halal financing amidst the COVID-19 challenges

Does Mobile Payment Promote Financial Inclusion Among Palestinians Women: A Quantitative Approach Through Structural Equation Modeling

An attempt at validating the notion of whether women's access to financial services through mobile payment enhances their empowerment necessitated this study. Mainly, it focuses on the extent to which mobile payment can contribute to financial inclusion in the context of Palestinian women, which seems to be sparse and lacking in the literature. A quantitative approach was employed using 147 questionnaires designed based on the theory of planned behavior and reflective model for measuring financial inclusion. The research found that with successive increases in mobile payment usage, financial inclusion further increased. Precisely, the growth of mobile payment usage by 1 percent can improve women's financial inclusion by 0.449 percent. By increasing women's financial inclusion, women's economic empowerment could be effectively and positively improved, which boosts productivity, increases economic diversification and income equality, and other positive development outcomes

Developing The Hybrid Model (Waqf & Zakat) For Improving The Zakat Recipients’ Healthcare In Selangor

The paper aims to develop a system that will strengthen zakat recipients' healthcare through coordination between waqf and zakat institutions. According to sources, Selangor has a lot of waqf and zakat reserves that are not being used. To resolve these issues and optimize the usage of barren and underused properties of Waqf and Zakat, a better management structure is needed. To accomplish the objective, this research employs a qualitative approach. It is found in the study that the Zakat and Waqf can be used for investment purposes; however, return from these investments should be used for the intended purpose and, i.e., to ensure social well-being, especially of the marginalized groups of society. The proposed model holds significance in improving the healthcare of zakat recipients and leading the society towards achieving social well-being and better living standards. This study's results may enhance the policymakers' understanding and contribute to better utilization of Zakat and Waqf assets. Besides, it will also enhance zakat collection and distribution and contribute to Waqf and Zakat funds' efficient management. There are certain limitations to the study in data availability, such as official data for waqf land in Selangor is available till December 31, 2016

Waqf Effectiveness in Nigeria: Problems and Solutions

The efficiency of the institution of Waqf in alleviating poverty is undisputable and Nigeria as a country with a significant Muslim population stands to benefit immensely from well-functioning Waqf institutions. Despite the presence of Waqf in Nigeria, the country still experiences increasing levels of poverty. This study aims to find the problems hindering the effectiveness of the Waqf operation in alleviating poverty in Nigeria. It uses the thematic framework medium of interviewing as a methodology of retrieving the necessary data. From the analysis, it was evident that a combination of a lack of awareness, lack of transparency as well as corrupt practices is what has led to the inefficiency of Waqf operations in Nigeria. The study concludes by discussing solutions that can be employed to remedy the challenges, including producing experts in Waqf management, providing tax exemptions for Waqf donors, enacting Federal laws relating to Awqaf and awareness creation

Determinants of Zakat Compliance among Muslim Individuals: A Systematic Literature Review

Zakat, also known as almsgiving, is the fourth pillar of Islam. Extensive literature has reported different factors in influencing zakat compliance. This study aims to identify, review and synthesize the determinants of zakat compliance among Muslim individuals. The present paper carried out a systematic literature review (SLR) of the related literature. The inclusion criteria were: i) publication date between 2000 and 2020, ii) being an empirical study, iii) written in English, and iv)published in the Scopus or Google Scholar database. Following Preferred Reporting Items for Systematic Reviews and Meta-analyses (PRISMA) procedures, 12 eligible empirical studies were included. The review suggests that compliance to pay zakat is determined by 1) psychological factors, 2), environmental factors, 3) organizational factors and 4) socio-demographic factors. This study contributes to the literature by consolidating studies on the factors determining zakat compliance among Muslim individuals and offers some implications for practitioners in implementing appropriate strategies to increase zakat collection