An investigation into SMEs' perceptions of credit guarantee corporation (CGC) Malaysia berhad: A case study of Islamic guarantee scheme in Malays

Small and Medium Sized Enterprises (SMEs) are considered as backbone of the national economies, whether developing, or developed nations, due to their contribution to economic growth and capital accumulation. In Malaysia, therefore, the government has formulated various strategies to encourage development of the SMEs with the objectives of economic growth, capital accumulation and creating employment opportunities. One of such strategies resulted in the formation of Credit Guarantee Corporation, as a guarantor for the SMEs. The booming phenomenon of Islamic finance especially in Malaysia has influenced the CGC to come up with Islamic guarantee scheme, parallel with the demand of Islamic financing products in the country. However, since the scheme was introduced by the Corporation, in general, the performance of the Islamic guarantee scheme has not performed as expected and has not been as competitive as the conventional guarantee scheme, even though the scheme has recorded positive growth for its products since the inception. This study, therefore, aims to explore the various demand conditions for the Islamic guarantee scheme with the objective of finding possible solutions for the gaps exist in the scheme. A survey schedule was conducted through e-mail questionnaires directed to the SME entrepreneurs. The data was analyzed by using SPSS version 15. The findings indicate that there are some gaps in the scheme's operations pertaining to promotional aspects, product development, staff competency, and government involvement. Hence, the effectiveness of the Islamic guarantee scheme can be questioned, although, undeniably there are some who have benefited from the services. It should also be stated that the majority of the entrepreneurs, due to such reasons, are excluded benefiting the positive side of the Islamic guarantee scheme due to the glitches in the system. This study, therefore, concludes that improvements related to various aspects of the CGC are needed in order to ensure that the Islamic guarantee scheme is continuously expanding in the future

Exploring FinTech Lending: The Influence of Financing and Economic Factors on the Success of Peer-to-Peer (P2P) Funded Loans

This research intends to integrate financing and economic factors into a unified model to explore their influence on P2P lending successful fundraising. An innovative framework of the ARDL method was utilized to explore the short and long-term effects of the factors model to allow the P2P lending players to make informed decisions and develop effective strategies for sustainable FinTech lending practices. Information asymmetry is a persistent concern, and the quality of information provided by both internal and external sources plays a crucial role in determining lender decisions. It aims to offer a holistic understanding of how these elements interact and collectively influence P2P lending loan success, emphasizing the importance of transparency and efficient online lending practices

A STUDY ON THE REVITALIZATION OF WAQAF (ENDOWMENT) LANDS FOR AGRIBUSINESS ACTIVITIES

This paper discusses on the potential of revitalizing the idle waqaf lands for agribusiness activities. The study employs secondary data gathered from relevant authorities which then interpolated to determine meaningful result. The study indicates that there lucrative revenue that can be generated from agribusiness activities. However, a better management and coordination at the macro and micro level is needed amongst the various stakeholders to ensure the idle waqaf lands will be utilized efficiently. The constraint of this study is in term of having latest empirical data on the official size based on the suitability of the waqaf lands for agriculture. Nevertheless, the limitation of the study can be an opportunity for future study. The outcome from this study will create awareness on the potential of waqf lands in agribusiness activities and the lucrative returns that this sector can produce. In addition, the study will contribute in enriching literature in this field. There is limited study has been done in measuring the potential of waqaf lands for agribusiness activities. Thus, this paper is one of its kinds in exploring the potential of waqaf landsWaqaf lands, Agribusiness, Waqaf, Islamic finance, Jawhar

The efficiency of Islamic banks in Malaysia: Based on DEA and Malmquist productivity index / Mohd Faizal Basria, Amirul Afif Muhamat and Mohamad Nizam Jaafar.

This paper aims to investigate the impact of liberalisation move by Bank Negara Malaysia (BNM) towards the efficiency of domestic and foreign Islamic banks (IBs) in Malaysia. This is consequence of decision of BNM that awarded licenses to three international IBs, namely Kuwait Finance House (KFH), Al Rajhi Bank, and Asian Finance Bank in 2005. In addition, this study takes into consideration the existing foreign banks in the country that operate via Islamic banking subsidiaries as part of foreign IBs. The research evaluates the impact of foreign Islamic banks in Malaysia by measuring their contribution to the growth of the Malaysian Islamic banking industry. Using a sample of 16 IBs in Malaysia from 2008 to 2015, the study uses Data Envelopment Analysis (DEA) in measuring the efficiency level of each bank and comparative between the performance of domestic and foreign IBs in the country. The paper also employs the Malmquist Productivity Index to gauge the changes in its components between the same subjects and timeframe. The DEA results showed that the domestic Islamic banks are considered more efficient than most domestic Islamic banks outperforming the foreign Islamic banks. Banks like Hong Leong Islamic, Maybank Islamic, Public Islamic, and RHB Islamic are considered among the top performers for technical efficiency and scale efficiency. The study also found that based on the Malmquist Productivity Index, the least efficient banks based on DEA have improved in technical efficiency, technology, and total factor productivity (TFP)

Corporate Social Performance (CSP) influences on Islamic Bank's financial performance / Amirul Afif Muhamat, Mohamad Nizam Jaafar, Mohd Faizal Basri

This paper aims to assess the influence of corporate social performance (CSP) categories which are legal, ethical, economic and discretionary responsibilities over the Dummy Islamic Bank’s (the original name of the bank is remained confidential) financial performance. There are four components of CSP and findings indicate that this Islamic bank has fulfilled each category at minimum level - highest contribution was allocated for discretionary responsibility which is the pinnacle stage of CSP. This study has some limitations which need to be highlighted for future study. First, it only focused on one Islamic bank and may not reflect other Islamic banks in the country or in other region. Next, the period of observation is not lengthy to facilitate for more robust and rigorous analysis

General Takaful claims: An experience of Takaful operator in Malaysia / Amirul Afif Muhamat, Mohamad Nizam Jaafar and Sharifah Faigah Syed Alwi.

Takaful is interchangeably referred as Islamic insurance. In Malaysia, the takaful sector is part of the main components for Islamic finance industry. The business can be divided into two: general and family takaful. To ease understanding on this niche sector; general takaful is comparable to general insurance while family takaful is akin to life insurance with special reference needs to be given on the requirement of the business to adhere to the Islamic precepts. The main business in general takaful is motor takaful and this line of business is faced with high takaful claims. This study appraised the factors which affect the general takaful claims based on the experience of one takaful operator in Malaysia (the name of takaful operator is not disclosed due to confidentiality). The factors are: number of claims; fraud; and coverage for protection. The limitation of this study is that the observation period is only 10 years which limits rigorous analysis to be done. Nevertheless, previous studies in this area depict the same limitation – constraint in gathering data that has long observation period. On the bright side, the data in this study is still capable to produce meaningful results to be referred with regards to this issue – general takaful claims

Acceptance of Islamic Banking in New Zealand: Perspectives from Potential Customers

The Islamic banking system stems from an interest free economic transaction model, which was introduced well in the early days of Islam. Even though the development of Islamic banking in the southern hemisphere is not as rapid as in the northern hemisphere, this does not imply that small western countries such as New Zealand are not interested in this niche sector. The increasing number of the Muslim population in New Zealand, which grew to 70,000 by 2018, shows that there may be a potential demand for Islamic financial services. This perception study which is part of a larger feasibility study uses a quantitative approach to examine the perception level of New Zealand residents towards their intention to use Islamic banking. Using purposive sampling technique, 300 questionnaires were distributed to potential banking customers, irrespective of religion, residing in New Zealand. Multiple regression analysis was conducted to capture whether the variables based on the theory of reasoned action including knowledge, religious values, subjective norms and attitude had an effect on the New Zealand residents' intention to use Islamic banking. It was interestingly noted that only attitude had a significant effect on how New Zealand residents perceive their intention to use Islamic banking in their daily lives. Overall, this study has ascertained the level of perception towards their intention to use Islamic banking among potential customers in New Zealand. The results of this study can be used as a framework for the setting up of an Islamic banking system in New Zealand

Cost-effective Analysis of Drone for Disaster Victim Identification (DVI): Islamic Insurance Perspectives

Islamic insurance(takaful) companies use cutting-edge technology to serve their customers better. Drone adoption in the sector has been intermittent, with certain regions of the globe making more use of this technology than others. The process of identifying corpses (often in large numbers) after a catastrophe is known as disaster victim identification. This study provides preliminary results based on cost-effectiveness analysis, net present value and internal rate of return to assess the cost impact of potential drone adoption. The two most essential opportunity costs to consider are time and money.   Keywords: drone; Islamic insurance; takaful; disaster   eISSN: 2398-4287 © 2022. The Authors. Published for AMER ABRA cE-Bs by e-International Publishing House, Ltd., UK. This is an open-access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer–review under the responsibility of AMER (Association of Malaysian Environment-Behaviour Researchers), ABRA (Association of Behavioural Researchers on Asians/Africans/Arabians), and cE-Bs (Centre for Environment-Behaviour Studies), Faculty of Architecture, Planning & Surveying, Universiti Teknologi MARA, Malaysia. DOI: https://doi.org/10.21834/ebpj.v7i21.374

Determinants of capital structure: Empirical evidence from Shariah compliant plantation firms in Malaysia / Mohamad Nizam Jaafar … [et al.]

Capital structure choice is vital in corporate financial management due to its effect on both return and risk to investors. As such, the objective of this research is to analyse the capital structure of listed shariah compliant plantation companies in Bursa Malaysia. The factors that influence the level of debt in this research are profitability, tangibility and liquidity respectively. The research is conducted by observing financial data of 34 listed shariah compliant plantation firms in Malaysia from period 2006 to 2016. The study has used panel data and the regression analysis is based on ordinary least square (OLS). Capital structure is the dependaple variable referring to debt ratio of the companies, decomposed into total debts over total assets. The independent variables are profitability, liquidity and tangibility. Three theories of capital structure have guided this study i.e. the Trade-Off Theory, Asymmetric Information and the Pecking Order Theory. The study shows that profitability and tangibility have significant positive relationship capital structure. Nevertheless, liquidity does not have any significant relationship with the debt ratio. It is most likely that liquidity is not taken into account by listed plantation companies in Malaysia in making their capital structure decision. Since profitability and tangibility have significant relationship with the level of debt, the Theory of Capital Structure such as Trade Off Theory is applicable to plantation shariah compliant firms listed in Bursa Malaysia

An analysis of factors that affect earnings quality on Islamic commercial banks: The case at Indonesia and Malaysia

This research aims to determine the impact of leverage, liquidity, and profitability; examine company size as a moderating element; and compare earnings quality at Indonesian and Malaysian Islamic commercial banks. This study's subjects were Indonesian and Malaysian Islamic commercial banks, with a sample size of ten Indonesian Islamic commercial banks and fourteen Malaysian Islamic commercial banks from 2016-2020. The regression approach was employed in this investigation. According to the findings of this study, leverage does not affect earnings quality; liquidity hurts earnings quality; profitability does not affect earnings quality; company size is unable to moderate the relationship of leverage to earnings quality; company size is unable to moderate the relationship of liquidity to earnings quality; company size is unable to moderate the relationship between profitability and earnings quality; Leverage, liquidity and profitability simultaneously have no effect on earnings quality at Indonesian Islamic commercial banks, but simultaneously affect Malaysian Islamic commercial banks; and there is no difference in earnings quality at Indonesian and Malaysian Islamic commercial bank