{"title":"Issues and Challenges of Financial Inclusion Among Low-Income Earners In Rural Areas of Malaysia","authors":"Salihah Sharizan, Nur Harena Redzuan, R. Rosman","doi":"10.26414/A2376","DOIUrl":"https://doi.org/10.26414/A2376","url":null,"abstract":"Financial inclusion (FI) appears to be one of the main global agendas as it is an essential way of reducing poverty and increasing the economic growth of a country. FI is the provision of financial services to all segments of society in a more convenient, quality, and affordable way. In this study, the authors analyzed the issues and challenges faced from the two perspectives of the Financial Institutions (FIs) and the rural B40 group concerning the way of pursuing the exclusive of FI. Primary data was collected by conducting semi-structured interviews with four expert bankers from the Financial Institutions (FIs) in Kuala Rompin, Pahang, and two representatives from the B40 customers in the rural areas of Pekan, Pahang, Malaysia. Based on the findings, barriers faced by the supply sides of the FIs include 1) high risk of cost and security, 2) barriers in communication and lack of financial education, and 3) lack of proof documents. The other challenges are 1) competition with the conventional institutions, 2) default risk due to non-payment, and 3) internet connection problem. On the demand side, the issues and challenges found include 1) lack of confidence, 2) lack of proof documents, 3) misuse of capital, and 4) lack of financial literacy. Henceforth, the findings have significant implications for the Islamic banking and finance industry in exploring the current barriers faced in delivering financial inclusion to the lower segment of the society in Malaysia.","PeriodicalId":53787,"journal":{"name":"Turkish Journal of Islamic Economics-TUJISE","volume":"17 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2021-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73895690","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Financial Literacy and the Impact of Movement Control Order (MCO) Among the Muslim Mompreneurs: A Qualitative Study","authors":"Syarah Syahira Mohd Yusoff","doi":"10.26414/a2373","DOIUrl":"https://doi.org/10.26414/a2373","url":null,"abstract":"This empirical paper investigates how the mompreneurs manage their businesses during the Covid-19 lockdown and how the pandemic affects their family. The role of a mother in a family encompasses the livelihood of the family members, which extends to the family's financial standing. A mother's role in a family ranges from a homemaker and, to a certain extent, a financial provider. In Malaysia, it was reported in 2018 that 60.2% of entrepreneurs are housewives. However, it is believed that many women are working at and from home with high cost of living, especially in urban areas. They become home-based entrepreneurs, especially during this unprecedented pandemic, i.e. Covid-19, and restricted by the Movement Control Order (MCO). This study adopted an exploratory qualitative study whereby six (6) mompreneurs who are operating their businesses from home were interviewed to understand how the pandemic and the lockdown have affected their lives. This paper further examines their coping mechanism to the pandemic and financial income during this crisis. Mompreneurs' financial literacy is also observed in this paper to explore their financial understanding. This research is an exploratory study, and it only provides general ideas on how a home-based businesswoman survive and cope during the lockdown. The findings from this paper are suitable to be used as a benchmark for an extensive quantitative study in the future to further understand the behaviour of the mompreneurs, especially in Malaysia.","PeriodicalId":53787,"journal":{"name":"Turkish Journal of Islamic Economics-TUJISE","volume":"331 1","pages":"377-386"},"PeriodicalIF":0.3,"publicationDate":"2021-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77593063","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Rusni Hassan, Khairul Fikry Jamaludin, M. Benaicha
{"title":"Exploring Potentials of Philanthropic Islamic Financial Instruments in Providing Healthcare Services for Underprivileged","authors":"Rusni Hassan, Khairul Fikry Jamaludin, M. Benaicha","doi":"10.26414/a2377","DOIUrl":"https://doi.org/10.26414/a2377","url":null,"abstract":"Philanthropic financial instruments utilize donated funds or assets in order to deliver social services for society. NGOs may not be able to operate the social services efficiently in the absence of such funds. Lately, there are plenty of organizations that have taken initiatives to render social services for targeted populations in order to curb social problems such as poverty, hunger, crimes, etc., through the use of some forms of philanthropic instruments including Islamic social finance, ethical finance, and others. Today, however, philanthropic financial instruments such as socially responsible investment (SRI), social impact bonds (SIB), and even Waqf are issued by financial institutions rather than socially driven institutions. As such, they have been treated as commercial financial instruments rather than socially driven mechanisms. This paper aims to elucidate the potentials of selected modern financial philanthropic instruments that deal with the healthcare sector. The strengths and weaknesses of the selected instruments will be assessed to explore their potentials in serving the healthcare services sector particularly for the underprivileged. The healthcare sector is highlighted as the focus of this study due to its relevance to the present challenge of the Covid-19 pandemic. This is an exploratory study that adopts the qualitative method whereby a rigorous review of the relevant literature is conducted to examine the potential that philanthropic Islamic financial instruments can offer in providing healthcare services to the underprivileged. The findings elaborate on three important models of philanthropic instruments, namely social impact bonds (SIB), development impact bonds (DIB), and takaful-waqf models. It was also found that these philanthropic instruments have varied strengths and weaknesses that require rectification in the future.","PeriodicalId":53787,"journal":{"name":"Turkish Journal of Islamic Economics-TUJISE","volume":"13 1","pages":"239-260"},"PeriodicalIF":0.3,"publicationDate":"2021-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83092153","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Takāful Risk Fund and Surplus Management: Analytics for Social Equity?","authors":"Syed Musa Bin Syed Jaafar Alhabshi","doi":"10.26414/A2375","DOIUrl":"https://doi.org/10.26414/A2375","url":null,"abstract":"An important and significant feature of Takāful Model is the proper administration and effective management of risk fund and the takāful surplus distribution. Unlike conventional insurance where all premiums paid are exchanged in consideration for underwriting risk pool assumed by the insurance company in the form of risk transfer, Takāful contribution is based on the principle of mutual trust, mutual risk pooling, and mutual benefit based on (ta’aun) cooperation and the social contract of tabarru’. The tabarru’ contribution to the risk fund exemplifies the social nature of the risk fund. Technically the nature of this mutual risk fund is based on social contribution intended to indemnify the participants as policyholders against peril arising from hazard. However, the issue of both moral and morale hazard may also arise due to the lack of policy and strategy in terms of governance and transparency of the risk fund. This article attempts to critically review the current takāful surplus management of selected takāful operator’s model based on Shariah principles, rulings, and requirements; and the regulatory guidelines and policy documents. It will highlight the issue(s) of social equity among the shareholders, takāful operators, and policyholders and present the analytics of takāful surplus based on the different takāful operating models as specified by the Takāful Operating Framework. It will also examine the consequences of takāful surplus management reporting practices and the implications of the adoption of relevant international financial reporting standards. Finally, this article will attempt to articulate the analytics for social equity in Takāful.","PeriodicalId":53787,"journal":{"name":"Turkish Journal of Islamic Economics-TUJISE","volume":"58 1","pages":"401-421"},"PeriodicalIF":0.3,"publicationDate":"2021-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84186654","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Islamic Financial Planning: Towards Sustaining the Financial Wellbeing of Muslim Families in Malaysia Post Covid-19","authors":"Zarina Mohd Yusoff, E. Ali, Habeebullah Zakariyah","doi":"10.26414/a2380","DOIUrl":"https://doi.org/10.26414/a2380","url":null,"abstract":"Prior to the Covid-19 pandemic, it was reported that over 60% of the people in Malaysia only have enough savings to last them for less than 6 months in the event of loss of income. It is also reported that only 10.8% of urban Malaysian households have enough savings to withstand 'financial shocks' resulting from events such as job loss, economic crisis, physical impairment and death. The current Covid-19 pandemic had proven in stronger term that financial preparation is crucial for unpredictable situations such us the financial problems arising from the economic slowdown caused by movement control orders and lockdowns. Many households;especially those whose breadwinners were being laid-off by their companies, or had their salaries cut-off and asked to take unpaid leave - are in difficult financial situation. Only those with minimal debt obligations, steady income stream and enough financial buffer to pay for expenditures for the coming months are not in urgent need of any government assistance. Hence, it is high time to inculcate the knowledge of Islamic financial planning among Muslim families to ensure their wellbeing.","PeriodicalId":53787,"journal":{"name":"Turkish Journal of Islamic Economics-TUJISE","volume":"3 1","pages":"355-376"},"PeriodicalIF":0.3,"publicationDate":"2021-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76932785","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Integrating Crowd-donating and Islamic Crowd-investing to Achieve SDG#2 towards a Zero Hunger Society in the Post-crisis of the COVID-19 Pandemic","authors":"Ike Purnamasari, Salina Kassim","doi":"10.26414/a2368","DOIUrl":"https://doi.org/10.26414/a2368","url":null,"abstract":"The COVID-19 pandemic, which hit humankind in late 2019, has immensely affected food-insecure people who are susceptible to chronic hunger. Hundreds of millions of people have already been suffering from hunger and malnutrition even before the virus hit. This has motivated various groups from the society to donate for the provision of food to those below the poverty line. In this regard, crowd-donating has a high potential to assist the affected communities, which will promote the prospect of Islamic crowd-investing in realizing the efforts of increasing food supplies that may reduce hunger. The purposes of this research are, first, to integration the potentials of crowd-donating and Islamic crowd-investing in realising a hunger-free society, and second, to develop the concept of a \"one-stop-centre staple food solution\" for supporting food sustainability. Systematic literature review research method is used in this study, specifically to review the potentials of crowd-donating and Islamic crowd-investing in reducing the impact of hunger on the society. This research delivers the concept of providing staple food for food-insecure families through crowd-donating, and provides a conceptual overview of establishing a \"one-stop-centre staple food solution\" through Islamic crowd-investing to supply staple food and enable cheap transactions for people who are prone to hunger. It is hoped that the findings of this study may provide input as the basis for policy makers to create a hunger-free society through potential crowd-donating and Islamic crowd-investing, particularly for handling such a crisis during the current pandemic.","PeriodicalId":53787,"journal":{"name":"Turkish Journal of Islamic Economics-TUJISE","volume":"29 11","pages":"261-276"},"PeriodicalIF":0.3,"publicationDate":"2021-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72459828","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Vatimetou Mokhtar Maouloud, Anwar Hasan Abdullah Othman
{"title":"Impact of using Islamic Microfinance Products on Mauritanian Microentrepreneurs’ Income: Evidence from PROCAPEC- Nouakchot","authors":"Vatimetou Mokhtar Maouloud, Anwar Hasan Abdullah Othman","doi":"10.26414/A2371","DOIUrl":"https://doi.org/10.26414/A2371","url":null,"abstract":"This study examines the impact of using Islamic microfinance products on the Mauritanian microentrepreneurs’ income level. The study is purely quantitative, and it uses cross-sectional design data, which was gathered through a questionnaire from a sample of 381 beneficiaries of an Islamic microfinance institution (PROCAPEC). It uses Structural Equation Modeling (SEM) to determine the effectiveness of using Islamic microfinance products on the beneficiaries’ income as well as to test the moderator effect of gender on the relationship in the model. The research found out that the use of Islamic microfinance products has increased the beneficiaries’ income; however, gender has no moderator effect on the relationship between the usage of Islamic microfinance products and income level. These findings help the policymakers and managers of Islamic microfinance consider the factors increasing Islamic microfinance products’ usage to reduce poverty in the country. This study is among the pioneer in the field of Islamic microfinance in Mauritania due to the scarcity of studies in the geographical context.","PeriodicalId":53787,"journal":{"name":"Turkish Journal of Islamic Economics-TUJISE","volume":"29 1","pages":"219-238"},"PeriodicalIF":0.3,"publicationDate":"2021-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83628307","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"A Study on the Sustainability of Microfinance Institutions in Serving the Low-Income Group in Malaysia","authors":"Nur Harena Redzuan, Amir Bashir","doi":"10.26414/A2374","DOIUrl":"https://doi.org/10.26414/A2374","url":null,"abstract":"A microfinance scheme was introduced in Malaysia in the year 1987 as one of the alternatives to poverty eradication strategies in the country by the government. Since then, several institutions have created to carry out the agenda of providing small loans to the low-income group to start up their small-scale business to generate more sources of income to support their household consumption. However, for a certain reason, the people still do not find microfinance an important tool to uplift their economic positions. Most of the low-income groups are still unaware of this golden opportunity tailored for them. Besides, the sustainability of these subsidized microfinance systems implemented by Malaysia had not been appropriately studied. This study explores the attractiveness of the products offered by microfinance institutions and emphasizes the option that the participants must start utilizing the product. This research also explores microfinance facilities that contain conventional finance element which is prohibited in Islamic trade. The study also discusses the measures and actions taken by microfinance institutions in serving the low-income group in Malaysia. This paper employs a qualitative method through interviews and content analysis. The report, journal publications, and other related documents were also analyzed in achieving the objectives. The study provides the impact that it may pave the way to an indistinct understanding of how Islamic microfinance institutions sustain their operations.","PeriodicalId":53787,"journal":{"name":"Turkish Journal of Islamic Economics-TUJISE","volume":"2 1","pages":"339-353"},"PeriodicalIF":0.3,"publicationDate":"2021-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89474269","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Developing Cash Waqf Model as an Alternative Financing for Social Enterprises to Support Decent Work and Economic Growth in Indonesia","authors":"Najim Nur Fauziah","doi":"10.26414/A2759","DOIUrl":"https://doi.org/10.26414/A2759","url":null,"abstract":"Social enterprises have substantially affected Indonesia’s economic growth and may contribute to the Sustainable Development Goals (SDGs’) achievement. Social enterprises empower minority groups by giving greater accessibility to a facility for a sustainable means of livelihood to the low income and disadvantaged groups, which make up a considerable part of the population, thereby creating an inclusive workforce. However, financial issues still pose a challenge for the sustainability of social enterprises in Indonesia due to the awkward reconciliation of their social missions, a characteristic of their businesses, with the less attractive returns for their investors. Cash waqf is one of the Islamic social finance instruments accepted to invest and manage certain funds to solve different social challenges relevant to the SDGs. Hence, this study aims to achieve the following objectives: (i) to identify the current issues of social enterprises; and (ii) to propose an Integrated Cash Waqf Social Enterprise Business (ICWSE-B) model in achieving the SDG8 in Indonesia. This paper adopts a qualitative research method with primary data obtained mainly from interviews. The findings suggest that financing remains the most significant challenge for most social enterprise businesses. The study also introduced an innovative integrated business model of social enterprise and cash waqf known as the ICWSE-B model to solve many social enterprises’ financial issues. The proposed ICWSE-B model is considered most suitable for social enterprise as it supports decent work and economic growth of the SDGs.","PeriodicalId":53787,"journal":{"name":"Turkish Journal of Islamic Economics-TUJISE","volume":"58 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2021-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85045890","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Charity Behavior During COVID-19 Pandemic: Explaining the Peculiarity","authors":"Laily Dwi Arsyianti, Salina Kassim","doi":"10.26414/a2367","DOIUrl":"https://doi.org/10.26414/a2367","url":null,"abstract":"The COVID-19 pandemic has affected the economies throughout the globe including countries in ASEAN region. In Indonesia, economic growth is predicted to be negative and recession is happening, starting from the third quarter of 2020. Ironically, Islamic social activities including charity giving has shown an encouraging development during the COVID-19 period as collected charity funds has been the highest amidst the height of pandemic. While this phenomenon seems to be impossible, it is definitely worth a research. This study analyses charity behavior during COVID-19 pandemic and aims to elaborate its significant determinants. Although the economy is badly affected by pandemic situation, people are still eagerly giving charity as to implement Islamic value of brotherhood and helping each other, especially during this difficult period. Logistic regression is used as method to assess whether the society tend to give charity or not amidst the pandemic. Income, shopping habit during pandemic, investment habit during pandemic, religiosity and subjective norm are found to have significant effects on charity giving during the pandemic. Suitable and effective efforts to assist the poor during and post-COVID-19 period can be strategize based on the factors identified in this study. Government and practitioners are encouraged to keep on going in establishing programs to help societies living during pandemic.","PeriodicalId":53787,"journal":{"name":"Turkish Journal of Islamic Economics-TUJISE","volume":"58 1","pages":"321-338"},"PeriodicalIF":0.3,"publicationDate":"2021-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79461736","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}