Assessing the Performance and Scope of Islamic Microfinance in Thailand: Developments and Prospects

Microfinance has become very important for inclusive finance and micro-based economic development and the rise of Islamic finance responds to this change in many parts of the world. In Thailand, the first Islamic microfinance institution was established in the Muslim populated Pattani Province in 1987 and several others followed over the years. Yet, very few studies have been conducted to systematically document the basic aspects of this endeavour. The aim of this study is to examine the development and prospects of Islamic microfinance (IsMF) and assess the perceptions of the customers on the products, impact, performance and scope in Thailand. In doing so, this study is one the first to provide an overview of IsMF industry in Thailand and identifies factors affecting demand for IsMF services. Importantly, it will analyse the impacts of various IsMF services of the socio-economy of the Thai society. The study also evaluates outreach and sustainability of the IsMFIs. In an attempt to accomplish the aims of the study, a triangulation research method was employed. First, the questionnaire-based survey was administered to the customers of the IsMFIs in order to ascertain the factors affecting demand for products and impacts of IsMF. Secondly, a semi-structure interview was subsequently conducted with the customers in order to develop an in-depth understanding on demand for and impacts of IsMF. Thirdly, secondary data from financial reports of the IsMFIs were collected to compute relevant financial ratios, indicating outreach, sustainability, and efficiency and profitability of these IsMFIs. The findings from the survey analysis reveal that the demand for IsMF services are driven by the needs in various life cycle events, affordability, awareness and exposure of IsMF regulations and procedures. In addition, IsMF services have enhanced the well-being of the poor and financially excluded in different aspects. The levels of impacts are influenced by the emerging needs, affordability and exposure factors in varying degrees. Interestingly, IsMFIs have achieved operational sustainability, reached considerable number of the client-base, and been profitable. The findings not only provide valuable information in terms of behavioural dimensions and customer preferences, they are also useful for the microfinance providers and government in considering the future development related to Islamic microfinance programmes

Determinants of Short-Term Financing Among Islamic Savings Co-Operatives in Thailand

This research investigates the relationship between profitability, liquidity, and management preference and the use short-term modes of financing among Islamic savings co-operatives in Thailand. The results of this research will shed some light on whether profitability, liquidity and management preference are determinants of short-term financing in the co-operatives. Both descriptive statistics and regression analysis are used in this study. Descriptive analysis is used to explain the relationship between short-term financing and management preference. Regression analysis is applied to obtain the relation of short-term financing to profitability and liquidity. Data used in descriptive analysis is obtained via a questionnaire. Data on short-term financing, profitability, liquidity and other two contributing factors i.e. solvency and activity is obtained from secondary data mainly income statements, balance sheets and statements of cash flow. The raw data is transformed to financial ratios to represent profitability, liquidity, solvency and activity management. Short-term financing is calculated from the change of short-term financing over the period. The results of the regression analysis show that the profitability, liquidity, and activity management of the co-operatives are determinants of short-term financing in the co-operatives. The results confirm opinions being expressed by most executive board members and staff of the co-operatives who agreed, during the survey session, that profitability and liquidity are the two main concerns for the co-operatives to rely heavily on short-term modes of financing. The management of the co-operatives agree somewhat that they prefer short-term financing

IMPLEMENTATION OF THE ANALYTIC HIERARCHY PROCESS (AHP) METHOD IN DETERMINING PRIORITIES FOR SOLUTIONS TO ZAKAT MANAGEMENT PROBLEMS IN LUMAJANG REGENCY

Zakat can appear as a sharia economic instrument that can balance an economy and fix the severity and depth of poverty. The potential of zakat in Lumajang is quite significant, but the total zakat funds collected are still far from the total target and potential of existing zakat funds. From there it can be seen that serious problems create gaps in the management of zakat. This study aims to provide a map of priority problems in zakat management and priority solutions that can be given to zakat management in Lumajang Regency. The method to find the priority scale used in this study is the Analytic Hierarchy Process (AHP) involving four expert informants in the field of zakat. The results of the study reveal that the priority problems and solutions for zakat management in Lumajang Regency are three aspects, namely OPZ, Muzaki/Mustahik, and regulatory aspects. The most priority problem is from the OPZ aspect with a priority value of 0.638425 and the priority solution is also occupied by the OPZ cluster with a priority score of 0.581459

WAQF IN A NON-MUSLIM COUNTRY: A PRELIMINARY SURVEY OF WAQF IN THAILAND

Waqf in various forms has been found in Muslim communities throughout Thailand. However, a small number of systematic inquiries has been conducted to document basic information such as forms, management, and impacts of waqf in the country. As a result of that, it is difficult to further investigate whether waqf serves its objectives of socio-economic development of Muslim communities or otherwise. This study, therefore, aims at preliminary examining the forms, management, and issues on waqf in the Muslim majority area of Satun province in the south of Thailand. In order to arrive at the conclusion, a qualitative approach was employed. In-depth interview was used to gather information from Imans. Purposive sampling technique was used to choose the interviewees who have adequate knowledge on the topic. Narrative analysis was the method of analyzing the collected data. The findings in this study show that waqf in Thailand can be found in various forms and mainly property waqf which includes mosque buildings, Islamic schools, agricultural land and rental houses. Cash can also be found as a part of the process to purchase of waqf properties. These waqf properties are managed by mosque committee but are not required to report to the Provincial Islamic Committee. As a result, the information on the value of waqf cannot be found anywhere. The willingness of waqf contributors and no provisions of the law are the two main issues confronting waqf management in Thailand. This paper provides basic waqf information in Thailand and leads the way for further studies and subsequently effective model of waqf in a non-Muslim country. =========================================== Wakaf dalam berbagai bentuk telah ditemukan dalam komunitas Muslim di seluruh Thailand. Namun, sejumlah kecil pertanyaan sistematis telah dilakukan untuk mendokumentasikan informasi dasar seperti bentuk, manajemen dan dampak dari wakaf di negara tersebut. Sebagai hasil dari itu, sulit untuk menyelidiki lebih lanjut apakah wakaf dilaksanakan sesuai tujuannya untuk pembangunan sosial-ekonomi masyarakat Muslim atau sebaliknya. Oleh karena itu penelitian ini bertujuan untuk melakukan pemeriksaan awal terhadap bentuk, manajemen, dan isu-isu tentang wakaf di wilayah mayoritas Muslim di provinsi Satun di Thailand selatan. Dalam rangka penarikan kesimpulan, dilakukan pendekatan kualitatif. Wawancara mendalam digunakan untuk mengumpulkan informasi dari para Imam. Teknik purposive sampling digunakan untuk memilih responden yang memiliki pengetahuan yang memadai mengenai topik ini. Analisis naratif adalah metode analisis terhadap data yang telah dikumpulkan. Hasil penelitian ini menunjukkan bahwa wakaf di Thailand dapat ditemukan dalam berbagai bentuk dan terutama wakaf properti yang meliputi bangunan masjid, sekolah-sekolah Islam, lahan pertanian dan rumah sewa. Kas juga dapat ditemukan sebagai bagian dari proses untuk membeli properti wakaf. Wakaf properti ini dikelola oleh komite masjid, tetapi tidak diharuskan untuk melapor ke Komite Islam Provinsi. Akibatnya, informasi tentang nilai wakaf tidak dapat ditemukan dimanapun. Kesediaan kontributor wakaf dan tidak ada ketentuan hukum adalah dua isu utama yang dihadapi manajemen wakaf di Thailand. Penelitian ini memberikan informasi wakaf dasar di Thailand dan membuka jalan untuk studi lebih lanjut dan model wakaf yang efektif setelah ini di negara non-Muslim

Sensory and Physical Properties of Pla-duk-ra (Dried Fermented Catfish) at Different Conditions of Drying

In southernmost Thailand, big scale production of catfish demands a development of new lines of catfish-based products to fully utilize the raw material.  Pla-duk-ra (dried fermented catfish) is one such innovation. Traditional method of sunlight drying is commonly used to dry Pla-duk-ra. However, products are highly prone to contamination since they are dried in exposed area. Direct exposure to sunlight could also affect heat labile and light-sensitive nutrients.  In this study, other methods of drying were investigated to dry Pla-duk-ra with improved hygiene practice, physical properties and sensory profile.  Two scenarios were studied in this work. The objective of the first scenario was to determine the best range of temperature to dry a good and acceptable Pla-duk-ra by comparing open sun drying (range 40˚C to 50˚C) and shade drying (under the roof; 30˚C to 40˚C) . The best range of temperature obtained was then used for the second scenario where open sun, infrared and tray drying were further studied. Moisture content, water activity, colour,  texture profile analysis were performed on the Pla-duk-ra samples. Fried Pla-duk-ra was used in sensory evaluation to investigate consumer’s acceptance and preference. Open sun drying was found to be more superior to dry Pla-duk-ra resulting in darker shade of product as compared to shade drying. The moisture content for open sun drying and shade drying of Pla-duk-ra were reported 23.65% and 28.06%, respectively. Infrared heater gave the highest water activity (0.77) with the highest score for redness. Meanwhile, Pla-duk-ra dried under the hot-air tray resulted in the highest score for brightness (L*). Overall acceptance by the consumer showed that the Pla-duk-ra dried under the hot-air tray was the most preferred followed by open sun drying and infrared heater drying. To this end, hot-air tray drying could be applied in drying Pla-duk-ra in large scale production

<Special Feature"Socio-Economic Role of Islamic Finance and its Potential in the Post-Capitalist Era">Can Islamic Micro-financing Improve the Lives of the Clients: Evidence from a Non-Muslim Country

Microfinance has become very important for financial inclusion micro-based economic development and the rise of Islamic finance responds to this change in many parts of the world. In Thailand, an Islamic microfinance institution has been established in Pattani Province in 1987. This demand-side impact study is one of the first attempts to evaluate the impact of an Islamic microfinancial product in Thailand. Knowledge on impact helps to assess whether Islamic microfinance can be an alternative solution for the poor and financially excluded Muslims who forms a large part of the world poor. Using a combination of questionnaire and semi-structured interview, this study reveals that murabahah microfinancing has impacts on economic well-being of clients' households. The results further indicate that the impacts are either direct or indirect and these are likely to be influenced by clients' characteristics, including age, membership length, gender, occupation and the level of productive assets the clients possess. These characteristics can be classified into awareness and exposure about the operations and procedures related to Islamic microfinance institutions, in general, and the product (Islamic micro-financing), in particular; affordability and existing financial needs

Sensory and physical properties of Pla-duk-ra (Dried Fermented Catfish) at different conditions of drying

In southernmost Thailand, big scale production of catfish demands a development of new lines of catfish-based products to fully utilize the raw material. Pla-duk-ra (dried fermented catfish) is one such innovation. Traditional method of sunlight drying is commonly used to dry Pla-duk-ra. However, products are highly prone to contamination since they are dried in exposed area. Direct exposure to sunlight could also affect heat labile and light-sensitive nutrients. In this study, other methods of drying were investigated to dry Pla-duk-ra with improved hygiene practice, physical properties and sensory profile. Two scenarios were studied in this work. The objective of the first scenario was to determine the best range of temperature to dry a good and acceptable Pla-duk-ra by comparing open sun drying (range 40˚C to 50˚C) and shade drying (under the roof; 30˚C to 40˚C) . The best range of temperature obtained was then used for the second scenario where open sun, infrared and tray drying were further studied. Moisture content, water activity, colour, texture profile analysis were performed on the Pla-duk-ra samples. Fried Pla-duk-ra was used in sensory evaluation to investigate consumer’s acceptance and preference. Open sun drying was found to be more superior to dry Pla-duk-ra resulting in darker shade of product as compared to shade drying. The moisture content for open sun drying and shade drying of Pladuk-ra were reported 23.65% and 28.06%, respectively. Infrared heater gave the highest water activity (0.77) with the highest score for redness. Meanwhile, Pla-duk-ra dried under the hot-air tray resulted in the highest score for brightness (L*). Overall acceptance by the consumer showed that the Pla-duk-ra dried under the hot-air tray was the most preferred followed by open sun drying and infrared heater drying. To this end, hot-air tray drying could be applied in drying Pla-duk-ra in large scale production