Economic and Religious Significance of the Islamic and Conventional Pawnbroking in Malaysia: Behavioural and Perception Analysis

Operating alongside with the formal financial sector, there has been less recognition about the important role played by informal finance through their complementary role in providing credit to the society. Among informal finance, pawnshop has grown in importance over the past few years especially during the tough economic climate. In Malaysia for instance, the pawnbroking business has served people in need of small instant cash since the 19th century in various forms. Due to the excessive interest rate and other malpractices imposed by the conventional pawnshops, Malaysian government initiated the first Islamic pawnbroking in 1992 which was set up by the Terengganu Islamic Religious and Malay Customs Council namely as the Muassasah Gadaian Islam Terengganu, which has experienced an overwhelming success in terms of expanding in the informal economy. In 2010, there were 329 of institutions offering Islamic pawnbroking operating side by side with 259 licensed conventional pawnshops which shows a remarkable increase in the Islamic pawnbroking. Given this background, the research aim is to explore and analyse the socio-economic consequences of pawnshops crediting in Malaysia through the perceptions of the participants. In doing so, this study will examine the factors determining people’s preferences for pawnshop and also exploring the perceptions and opinions of the customers and the participating pawnbrokers in Malaysia on various aspects and consequences of pawnbroking. Importantly, it will analyse specifically the impact of Islamic pawnbroking on the socio-economy of the Malaysian society. In an attempt to fulfill the aims of the research study, first, the questionnaires survey were administered to both customers and pawnbrokers of the conventional and Islamic pawnshops in order to distinguish the processes of lending, factors determining pawnshops’ selection, and also the perceptions of Malaysian customers and pawnbrokers regarding the role of pawnshop institution in social development hence in economic development related issues. Second, a semi-structured interview were subsequently conducted with the leading individuals of the Islamic pawnbrokers in order to develop in-depth ideas and understanding about the underlying principle of Islamic pawnbroking and other issues related. Furthermore, a SWOT analysis is employed to analyse the prospect of Islamic pawnbroking in future with possible recommendations that could be considered by the government, pawnbrokers, and the customers as well. The findings from the surveys analysis demonstrate that the customers of Islamic pawnshops attest the positive role of pawnshop in both economic and social aspects of their lives especially in the case of low-income groups as compared to the conventional pawnshops. On the other hand, the results from the pawnbrokers’ analysis revealed that Islamic pawnbrokers demonstrated a promising prospect of the pawnshops’ business as compared to the conventional pawnbrokers as the latter operates with profit maximization and neglect the social welfare of the customer. Importantly, while the findings of the study renders valuable information in terms of behavioural dimension and customer preferences in pawnbroking, the findings are also useful for the businesses and government in considering the future development related to ar-rahn shops

Bantuan kewangan dan pembangunan ekonomi di ASEAN: hipotesis Kuznets

Artikel ini bertujuan mengkaji sejauh mana bantuan kewangan luar signifikan kepada pembangunan ekonomi. Empat indikator pembangunan sebagai pengukur bantuan kewangan dianalisis iaitu kadar pertumbuhan ekonomi, indeks pendidikan, indeks jangka hayat dan indeks pembangunan manusia menggunakan kaedah data panel. Tempoh masa kajian bermula dari tahun 2000 hingga tahun 2012 melibatkan 7 buah negara ASEAN. Hasil regresi mendapati bahawa bantuan kewangan signifikan membantu negara-negara ASEAN mencapai matlamat pembangunan. Koefisien negatif bagi pembolehubah kuadratik jumlah bantuan membuktikan bahawa hipotesis U-terbalik bantuan-Kuznets (Aid-Kuznets inverted U-hypothesis) berlaku dan bantuan kewangan diterima telah digunakan secara berkesan. Sehubungan itu, dapatan kajian ini memberi implikasi bahawa bantuan kewangan luar adalah penting dalam membantu pembangunan sesebuah negara. Hal ini dicapai melalui perbelanjaan berkesan daripada bantuan kewangan diterima yang dilakukan

Assessment on Economic Growth of Development Indicators in ASEAN: A Dynamic Panel Data Analysis

This article analyses the relationship between economic growth and certain important indicators in economic development. These include the mortality rate, life expectancy, and unemployment rate in five different ASEAN countries from the years 1980 to 2010 using panel data analysis. The result of this estimation suggests that there exists a long-term relationship between economic growth and these development indicators, which is compatible with the theory highlighted in the economy. This shows that economic growth does have an impact on the development of a country in various aspects. Keywords: Economic growth, economic development, ASEA

Impak kitaran sosial dalam sumbangan alumni terhadap pendapatan endowmen universiti

Pelan Strategik Pengajian Tinggi Negara (PSPTN) dirangka bagi memperkasa pendidikan tinggi negara. Antara perancangan pelan ini adalah memberikan kuasa autonomi kepada pihak universiti untuk menguruskan operasi universiti. Keadaan ini bergantung kepada kemampuan pihak universiti untuk mencapai peruntukan sasaran kementerian bagi menanggung kos operasi mengurus dan membangun universiti. Antara strategi kewangan yang difokuskan dalam pelan ini ialah meningkatkan pendapatan endowmen universiti melalui sumbangan alumni. Walau bagaimanapun, kesanggupan alumni memberikan sumbangan boleh berubah-ubah dan bergantung kepada beberapa faktor. Dalam kajian ini, lima faktor sumbangan alumni telah dianalisis iaitu pengurusan kewangan, personaliti diri, eksternal, pengurusan universiti dan jalinan universiti-komuniti. Faktor-faktor ini turut diinteraksi untuk menghasilkan indikator yang dikenali pemboleh ubah kitaran sosial. Pemboleh ubah kitaran bertujuan mengukur impak perubahan faktor-faktor terhadap nilai sumbangan. Ujian regresi diaplikasi untuk menganalisis faktor-faktor yang dikaji terhadap sumbangan alumni ini. Dapatan analisis menunjukkan bahawa pemboleh ubah kitaran sosial mempengaruhi secara signifikan terhadap pendapatan endowmen universiti antara 3 hingga 4 peratus. Implikasi kajian ini membuktikan saluran sumbangan alumni signifikan untuk diteroka oleh pihak universiti bagi menampung sebahagian defisit peruntukan yang dialami

THE TENDENCY OF USING MICRO TAKAFUL AMONG MICRO, SMALL AND MEDIUM ENTREPRENEURS AT PELEPAT ILIR, JAMBI, INDONESIA

Micro takaful is one of the takaful product development strategies in developing the 'marginalized' economy of financial institutions. The objective of this study is to provide empirical evidence on financial inclusion as a factor of behavioral control in the Theory of Perceived Behavior (TPB) to analyze its influence with the tendency of micro, small and medium enterprises (MSME) entrepreneurs to the use of micro takaful. Data distributed via questionnaires to 372 respondents were analyzed using descriptive and structural equation modeling. The results of the study showed that there was a positive and significant effect between attitude and financial inclusion on the tendency of using micro takaful. On the contrary, subjective norm factors have no significant effect on the proposed model. The implications of the study indicate that financial inclusion is one of the most important policies to achieve sustainable development. In addition, takaful institutions and policy makers need to expand the supply of microfinance products, especially micro takaful scheme to MSME in Indonesia to ensure the protection and security of their businesses

Potensi Amanah Pelaburan Hartanah Islam (I-Reit) dalam membangunkan industri sawit di Malaysia

Amanah Pelaburan Hartanah Islam (I-REIT) merupakan satu instrumen pasaran modal yang berlandaskan syariah. Kewujudan I-REIT memberi peluang kepada pelabur untuk melabur dalam bidang hartanah. Al-Hadharah Boustead REIT yang ditubuhkan pada tahun 2007 merupakan satu-satunya instrumen Amanah Pelaburan Hartanah Islam (IREIT) yang berasaskan perladangan kelapa sawit di Malaysia. Artikel ini bertujuan membincangkan prinsip syariah yang diguna pakai oleh Al-Hadharah Boustead REIT serta sumbangannya dalam industri sawit negara. Dapatan kajian menunjukkan Al-Hadharah Boustead REIT menggunakan prinsip al-musyārakah, Al-wakālah, Al-Ujr dan harta musyā dalam aktiviti pelaburannya. Di samping itu, penguasaan pemilikan Al-Hadharah Boustead REIT dalam industri sawit negara menunjukkan peningkatan yang memberangsangkan sepanjang tempoh kajian

Integration of Islamic real estate investment trusts in Malaysia: is it an issue for investors?

Various stakeholders and academicians have shown their interest in the study of capital market instruments such as stock market, bond and real estate investment trust (REITs). As such, there rises a need to review the importance of capital markets integration. This study took a closer look at the co-integration between Islamic real estate investment trust counters in Malaysia by applying the Vector Auto Regression (VAR) method. Data were generated by processing monthly data from January 2007 to December 2013 obtained from authorized sources. The findings indicated that there was no long-run or equilibrium relationship between the Islamic al-Aqar, al-Hadharah and Axis counters. Based on the results, it can be concluded that the Islamic REIT companies in Malaysia do not integrate each other in the long run. This will create opportunity for investors to diversify their investment portfolios in Malaysia. As seen from the Granger causality view, the Hadharah and Axis returns were driven by al-Aqar returns in the short run

The Link between Gold Price, Oil Price and Islamic Stock Market: Experience from Malaysia

This research will focus on the relationship between strategic commodities (namely oil and gold prices) and the Islamic stock market in Malaysia. The objective of this research is to analyze the dynamic effects of oil price and gold price changes on the Islamic stock market in Malaysia using an estimation of the Vector Auto Regression (VAR) method. The variables involved in this research are Crude Oil Price (COP), Kijang Gold Price (KGP), and FTSE Bursa Malaysia Emas Shariah Index (FBMES). Using data covering the period from January 2007 to December 2011, the study applies the co-integration analysis, Granger causality test, Impulse Response Function (IRF) and Variance Decomposition (VDC) analysis. The findings show that Islamic stock returns were not co-integrated with strategic commodities in the long run. From the Granger causality viewpoint, it was observed that there was a bi-directional causality relationship between Islamic stock returns with oil prices. On the other hand, the FBMES was not affected by the gold prices or vice versa. Therefore, it can be concluded that, among strategic commodities, only oil's price variables will affect the Islamic stock return in the short run in Malaysia. This proves that the Kijang Gold Price is not a valid variable for the purpose of predicting changes in Islamic share prices

The role of ar-rahn in enhancing financial inclusion: a structural equation modeling approach

This study examines the relationship between financial inclusion and the adoption of ar-rahn financing in enhancing the well-being of its customers throughout Malaysia. Data distributed via questionnaire to 239 respondents were analyzed using descriptive and structural equation modeling. The results indicate that there is a positive relationship between financial inclusion and ar-rahn’s financing adoption. In addition, the adoption of ar-rahn among customers improves the well-being of individuals and society. This paper contributes to the existing literatures and provide new insights on how financial inclusion could increase the adoption of ar-rahn financing and consequently the individual and societal well-being

Education expenditure and economic growth: a causal analysis for Malaysia

This paper focuses on the long-run relationship and causality between government expenditure in education and economic growth in Malaysian economy. Time series data is used for the period 1970 to 2010 obtained from authorized sources. In order to achieve the objective, an estimation of Vector Auto Regression (VAR) method is applied. Findings from the study show that economic growth (GDP) positively cointegrated with selected variables namely fixed capital formation (CAP), labor force participation (LAB) and government expenditure on education (EDU). With regard to the Granger causality relationship, it is found that the economic growth is a short term Granger cause for education variable and vice versa. Furthermore, this study has proves that human capital such as education variable plays an important role in influencing economic growth in Malaysia