Islamic Business Ethics as Customer Retention Factors in Islamic Bank: an Exploratory Factor Analysis

This study aims to explore the factors of Rasullah commendable qualities as partial variable in order to be able to test or examine that has been practiced by Islamic Bank employee at Ponorogo East Java Indonesia. Using 128 of respondents the data analyze quantitively. Data collected from respondent thorugh questionnaire responded on five point Likert scale. The data then analyzed employed Exploratory Factor Analysis (EFA) method using Varimax rotation, which reduced the data into several factors. The findings of this study indicates that commendable qualities of the Prophet Muhammad as business ethics indicators is emerged in 3 factors namely, siddiq, fathana, and tabligh, that probably would affect on costumer retention. Therefore, it is necessary future research to investigate the relationship 3 factors of commendable qualities of the Prophet Muhammad S.A.W. and customer retention in Islamic Bank especially in Ponorogo

The effects of students’ entrepreneurial characteristics on their propensity to become entrepreneurs in Malaysia

The purpose of this paper is to reflect on the data collected from Malaysian students to investigate the effects of students’ entrepreneurial characteristics (need for achievement, locus of control, propensity to take risk, self-confidence, tolerance of ambiguity and uncertainty, and leadership) on their propensity to become entrepreneurs in Malaysia. Design/methodology/approach – As a quantitative study, various analyses, such as exploratory factor analysis, confirmatory factor analysis and structural equation modelling, were conducted to analyze the data collected from 257 students known to have participated in entrepreneurship course and programmes. Findings – The results show that leadership skill, need for achievement, tolerance of ambiguity, and risk-taking propensity are positively and significantly associated with students’ intention to initiate entrepreneurial activities in Malaysia. Originality/value – The researchers have used data from the perspective of Malaysian students to increase the readers’ understanding on students’ entrepreneurial characteristics that could enhance their likelihood to become entrepreneurs in Malaysia. Keywords Innovativeness, Risk-taking, Entrepreneurial characteristics, Leadership skill, Need for achievement, Tolerance of ambiguit

Examining the Feasibility of Waqf (Islamic endowment)-based Islamic Insurance Product from the Malaysian Legal Perspective

Compare to other countries, control power over the Islamic endowment fund (Waqf) in Malaysia is basically put under one statutory body for each state called State Islamic Religious Council. The worse scenario is, there is no standard shared among these councils in terms of managing the Waqf fund (asset) where each state council had their own enactment to govern the management of the fund. In this context, this study tries to discuss the feasibility of Waqf (Islamic Endowment)-based Islamic insurance product to be practiced in Malaysia considering the opinion from the state Islamic religious council and legal experts in the industry. Adopting qualitative methodology, focus group discussion with the council representatives and legal experts have been conducted to achieve the research objective. Overall, it is found that all respondents have agreed with the proposed Waqf-based Islamic insurance product as it has special values that may inculcate the culture of brotherhood in society as this concept encourages people to give something to others without receiving any return especially in financial matters. Hence, a part of their agreement, the councils has stated their concern on Waqf enactments which were different among the states in Malaysia and based on discussion with the legal experts, they have proposed to adopt agency principle in order to cater the issue of control over the waqf fund. This study contributes in discussing the feasibility of the Waqf principle (endowment) to be introduced in the Islamic insurance products from the legal perspective

The impact of shariah-compliance extensiveness screening on the initial performance of Malaysian IPOs

This study suspects that relying on the current Shariah screening process on financial aspects by Shariah Advisory Council of Malaysia may be not sufficient as the two important ratios which are Debt ratio and ARTA ratio highlighted by Council of Islamic Fiqh Academy (CIFA) are not being used. The study observed 347 Shariah-compliant companies and 37 non-compliant Shariah companies that issued IPOs from January 1999 until December 2008. Obviously, when the Shariah IPOs samples are ranked based on the level of extensiveness, the difference in the initial returns between the most extensive Shariah IPOs and non-Shariah compliant IPOs prevails

The determinants of cash waqf re-endow intention in Malaysia

Cash waqf has significant potential to improve Muslims' economies, particularly in financing social and cultural activities. Most governments today are experiencing financial difficulties, with inadequate means to cover public needs and ensure that all residents are in good standing. Thus, this paper discusses internal factors such as trust, familiarity, and perceived efficacy as possible factors influencing cash waqf endowers' intention to reendow. The population for this study is 13,940 cash waqf donors in the Klang Valley, which covers Selangor and Kuala Lumpur, and a purposive sampling method was used. Based on the finding gathered using PLS analysis on 382 respondents indicated that internal factors (trust, familiarity, perceived efficacy) positively influence intention to reendow among cash waqf endowers. Trust is the most dominant factor that influences the intention to reendow. It may indicate that the higher the trust level a person has, the higher the intention to reendow. These study suggestions are other variables influencing the intention to reendow and should be explored further. Moreover, this study offers management implications, such as empirically proven conclusions on internal factors (trust, familiarity, perceived efficacy) that influence endowers' intention to reendow to waqf organisations

The effect of zakat programs on the social impact of microfinance institutions in Bangladesh

The purpose of this paper to measure the effectiveness of the central for zakat management (CZM) efforts in utilising zakat funds for promoting microfinance among poor rural people in Bangladesh.Thisstudyassessesthe effectivenessofzakatonaspectssuch asincome, household expense and fixed asset accumulation of the poor client based on the before and after approach groups comprising to impoverished individuals and families are given equity capital and are encouraged to set on small businesses according to their liking and ensure sustainable development goals (SDGs). The group are supervised for a period in 2010 to 2018, ensure all individualswithin the group can continue with their activities and ultimately, free themselves from the shackles of poverty and graduate into a sustainable livelihood and social impact. Results indicate a significant nominal and real increase in average monthly income, an increase in fixed assets and an increase in monthly average household expenditure before and after receiving zakat money. The findings from this paper shed light on the effectiveness of the zakat-based approach in alleviating poverty and ensuring sustainable economic empowerment of the poor rural people. This research is significant as it could be useful in future discussions on the potential ways to improve zakat-based MFIs and SDGs in Bangladesh. The outcomes from the discussions

Debt fnancing and firm performance: an analysis of Securities Commission of Malaysia 2013 revised shariah approved firms screening method

This study aims to assess the impact of the revised Shariah approved firms screening method in relation to the levels of debt and the Shariah-approved firms' performance introduced by the Securities Commission (SC) of Malaysia in 2013. The period of the study is 2000 to 2014. Panel regressions were employed to examine the impact for the firms that are consistently Shariah­approved as determined by the SC of Malaysia. The regression result indicates a non-monotone association between Shariah-approved firms' performance and debt levels. The optimum level of debt, however, is much higher than the 33% benchmark set by SC. Therefore, it can be concluded that the 2013 revised Shariah- approved firms screening method, which introduced the 33% debt ratio benchmark, did not improve the performance of Shariah-approved firms for the period studied. Nevertheless, since the observations are only until 2014, it is possible that the observations might not have captured the true impact of the change

Governance Structure of Microfinance Institutions: A Comparison of Models and Its Implication on Social Impact and Poverty Reduction

Bu makalenin amacı Mikro Finans Bankaları, Mikro Kredi Programları ve kırsal kalkınma planları gibi farklı Mikro Finans Kurumları (MFK) modellerini yönetişim yapılarına odaklanarak karşılaştırmak ve akabinde bunlara ilişkin sosyal etki ve yoksulluğun azaltılması konusunda yapılacak çıkarımların analiz edilmesidir. Her biri farklı bir model olmak üzere üç farklı MFK, Bangladeş örneği üzerinden ele alınacaktır. Bangladeş sosyal haklardan mahrum insanların girişimcilik kapasitesini arttırmak için onlara mikro kredi sağlama konusunda öncü rol oynayan bir ülke olarak değerlendirilmektedir. Bu çalışma metodolojik olarak Porter’ın Rekapetçi Strateji Teorisine (1979) dayanmaktadır. Bu teori bir piyasanın çekiciliğini ve rekabetin yoğunluğunu belirleyen beş temel etken yaklaşımını esas almakta; temelde MFK'ların yıllık raporlarından ve Mikro Kredi Düzenleme Ajansı (MKDA) raporundan derlenen ikincil veriye dayanmaktadır. Bu çalışma sosyal etkiyi arttıran ve fakirliği azaltan MFK'ların sosyal sorumluluk, hesap verebilirlik, şeffaflık, finansal performans üzerindeki güçlü etkisi göz önüne alındığında, bu kurumlardaki iyi yönetişim uygulamalarına katkı sağlamayı amaçlamaktadır. Çalışmanın bulguları kamu politikaları tercihleri ve küresel kalkınma söylemlerinde yerini almış olan mikro finans yapılarının değerlendirilmesine dönük ciddi katkılar sağlamaktadır. Genel anlamıyla çalışma kısıtlı sayıda değişkenin sosyal etkiyi arttırıcı ve yoksulluğu azaltıcı etkisinin olduğunu göstermektedir. Çalışmanın kısıtı olarak makaleye konu olan yatırım fonunun sadece gelişmekte olan ve gelişmiş MFK'larına yatırım yapmasını zikredebiliriz. Bu nedenle çalışmanın sonuçları sadece bu tür MFK'ları için genellenebilir. Mikro finans yönetişim konusu diğer paydaşlara ve bir MFK'daki karar verme sürecine uygulanabilir. MFK'ların daha iyi bir sosyal sorumluluk ve yoksulluk ile mücadele seviyesine ulaşması, yoksulların güçlendirilmesi ve finansal kaynaklara ulaşımlarının iyileştirilmesi yoluyla finansal katılımcılığın olumlu yönde gelişmesine katkı sağlayacaktır.The purpose of this paper is to compare three different models of MFIs, namely microfinance banks (MFB), Microcredit programme (MCP) and rural development scheme (RDS), by focusing on their governance structures, and subsequently analyse their implications on social impact and poverty reduction of the MFIs. Three MFIs, one from each model, will be considered, using Bangladesh as the case study. Bangladesh is a country which is considered to be a pioneer in providing micro-finance to the underprivileged people to improve their entrepreneurial capacity.  In methodology, the study relies on Porter’s Competitive Strategy Theory (1979). This theory is based on the concept that five forces determine the competitive intensity and attractiveness of a market which assesses five forces. The study relies on secondary data collected mainly from the annual reports of the three MFIs, and Microcredit Regulatory Authority (MRA) report. This study aims to contribute towards better governance practices of the MFIs given its strong implications on social responsibility, accountability, transparency, financial performance, increasing their social impact and poverty reduction of the MFIs. Findings of this study provide essential inputs on the way forward for the evolution of microfinance, as framed by the global development discourse and subsequent public policy choices. Overall, the study shows that only a limited number of variables influence the social impact and poverty reduction of an MFI. The limitation of the studied investment fund is that it invests in expanding and mature MFI’s. So the results of this research can only be generalised to expanding and mature MFI’s. The approach to microfinance governance should be broadened by focusing more on stakeholders and the decision making process in an MFI. Better social responsibility and poverty reduction of the MFIs contribute positively to financial inclusion through poverty alleviation, empowerment of the poor and better financial access, leading to sustainable economic growth