Conventional Financial Institutions Research Articles

BIAYA ADMINISTRASI PEMBIAYAAN DI BAITUL MAAL WAT TAMWIL (BMT) DALAM PERSPEKTIF EKONOMI ISLAM

AbstractBMT provides financing services to the community with the implementation and its products refer to Al-Qur'an and Hadith interpreted in the fatwa of the national sharia council of clerics indonesia. In realizing the financing, BMT also implements the administrative cost of financing as a pre-requisite to be paid by the member of the financing if the financing is realized. The absence of definite technical rules in determining the size of the administrative costs of financing makes the BMT in determining the administrative costs tend to adopt the ways undertaken by conventional financial institutions where in determining administrative costs based on a percentage of the size of the nominal financing. This shows the possibility of the BMT looking for its own advantages behind the administration of financing, because the greater the cost it will be the greater the administrative costs to be paid.Keywords, BMT; Financing; Financing Administration Cost

The Black Lives Matter movement and African American entrepreneurs’ crowdfunding success

This paper examines two aspects of African American restauranteurs—their crowdfunding performance and how such performance has been impacted by the Black Lives Matter movement. More than any other racial group, African American entrepreneurs face challenges securing funds from conventional financial institutions. A welcome addition to the pool of fundraising sources is crowdfunding, a new fintech option. Using binomial logistic regression, we analyzed all of the restaurant crowdfunding projects on Kickstarter.com, dating from 2010 to 2020. Drawing on aversive racism theory and value-belief-norm theory, we uncovered the finding that restaurant crowdfunding projects with African American racial cues were significantly less successful getting funded than their non-African American counterparts. However, the Black Lives Matter movement and the Kickstarter’s endorsement of the movement have significantly increased African American restauranteurs’ crowdfunding success.

Corporate Social Responsibility Practices in Islamic Financial Institutions (IFIs) in Sri Lanka

The Islamic banking system is a rapidly growing segment in the global banking industry. Corporate Social Responsibility (CSR) is a crucial element in the field of Islamic banking as it consists of responsibilities and accountabilities to the community. This study examined how CSR is practiced in Islamic Financial Institutions (IFIs) and its importance in Sri Lanka. The objective of the study is to examine the practices and importance of CSR practices in Amana Bank PLC and Al- Falaah (LOLC) PLC. The Primary data for the study were collected through interviews from selected branch managers and In-house Shari’ah advisers of the above IFIs. The findings of this study highlight the significance and the necessity of several CSR activities which are carried out by IFIs for the surrounding community, such as charity services, sponsorship, medical camps, educational assistance and social services. Interestingly, Amana Bank PLC has spent a higher amount for CSR activities relatively than Al-Falaah. In addition, it is directed for future research to study the comparison of CSR activities between IFIs and conventional financial institutions, and the impact of CSR on the society.

Pengaruh Pendidikan dan Perilaku Keagamaan terhadap Penggunaan Lembaga Keuangan Syariah (Studi Kasus di Desa Banjarwati Kecamatan Paciran Kabupaten Lamongan)


 
 The lack of public understanding of the products and services offered by Islamic financial institutions makes most people only see that the added value of Islamic financial institutions is halal and also aims to help others, many still think that Islamic financial institutions are the same as conventional financial institutions. Banjarwati Village Community is also a village with a Muslim community. This research was conducted in the people of Banjarwati Village, Paciran District, Lamongan Regency, which consisted of 5,825 residents with the aim of: to find out whether educational factors and religious behavior influence the use of Islamic financial institutions in the people of Banjarwati Village, Paciran District, Lamongan Regency. The number of respondents was 80 respondents. The sample collection technique uses the Simple Random Sampling method. Multiple Linear Regression analysis technique with SPSS 16.0 computer program. The results of this study show that partially the significance value of the education variable is 0.000 > 0.05 and the t count is 6.845 > t table 1.991 meaning that the education variable influences the use of Islamic financial institutions. Partially, the significance value of the religious behavior variable is 0.088 > 0.05 and the t count is 1.726 <t table 1.991 meaning that there is no influence from the religious behavior variable on the use of Islamic financial institutions. Simultaneously the calculated F value is greater than F table (31.130 > 3.106) and the significance value is α = 0.05 (0.000 <0.05) meaning that the variables of education and religious behavior together have a significant effect on the use of Islamic financial institutions.
 
 
 
 
 
 

The Importance and Use of Blockchain Technology in International Payment Methods

Blockchain technology, which has entered our lives in recent years, constitutes one of the most remarkable issues of the 21st century. According to Merriam Webster, blockchain is defined as; “It is a database with information shared in a digital network that is decentralized and accessible to all stakeholders and can be used at any time”. Looking at this definition, we can clearly understand that blockchain technology is actually a way to store certain information. Today, it can be seen that rapid technological developments in cryptocurrency techniques are an effective measure against security vulnerabilities such as hacking and theft encountered in the realization of fund transfers. The reason behind this is that the underlying blockchain technology of cryptocurrencies filters out duplicate and incorrect transactions. The emergence of cryptocurrencies as a payment system along with these conveniences has brought debates in traditional financial transaction markets. This means that conventional financial institutions face risks and threats from the popularity and effectiveness of cryptocurrencies. Today, when we look at it, we see the state or state structures – such as Central Banks – that guarantee the reliability of currencies in traditional currencies. The most important feature of the digital currency is that it does not have this central structure and does not have any authority to affect the currency.

Penerapan Konsep Syariah pada Produk Asuransi Prulink PT Prudential Syariah Binjai

The presence of sharia insurance is needed to be able to help the public to avoid the practices of usury, maisir and gharar, as practiced in conventional financial institutions which worry Indonesian citizens who are dominated by Muslims. Sharia insurance means mutual protection and assistance between a number of people and parties by investing in the form of assets and tabarru' which divides the form of return to face certain risks using a contract that conforms to sharia. in this study focuses on "Implementation of the Sharia Concept in PRUlink Insurance Products at PT. Prudential Syariah Binjai". Thus this research intends to find out whether the operationalization of sharia products (PRUlink sharia) at Prudential is in sync with sharia principles or not. This research method is a qualitative research method, namely by compiling data and information that has been collected by researchers with which will be the final result in written form. From the observations obtained, all funds in Prulink products invested are registered on the Jakarta Islamic Index, managed according to sharia and this also means that the company has avoided usury practices.
 Keywords Sharia Concept, Prulink Insurance, Prudential Sharia

Corporate Governance and Information Asymmetry

The financial industry is regarded as the backbone of the economy, and good corporate governance is critical to its smooth operation. Keeping in view the importance of corporate governance, this study aims to empirically investigate the impact of corporate governance on information asymmetry with moderating role of institutional quality of Islamic and conventional financial institutions. We used unbalanced panel data from 2006 to 2017 of 49 financial institutions including commercial banks, insurance companies, and Modaraba companies. A two-step system-Generalize Method of Moments (GMM) estimator is used to mitigate the endogeneity problem. Corporate governance of Conventional Financial Institutions (CFIs) is significantly related to information asymmetry however, the board size, and board composition of Islamic Financial Institutions (IFIs) are insignificant with asymmetric information index (AII). Further, the size of the shari’ah board is negatively and significantly related to AII. Institutional Quality (IQ) is significantly contributed toward the reduction of information asymmetry and plays a role as a moderator. Further, the impact of corporate governance on IFIs and CFIs differs due to the nature and contractual relationship of the parties and the institution’s type. The results of the study reveal that good quality institutions are important for corporate governance structure and the reduction of information asymmetry in financial institutions.

Islamic Banking: A Controversial Position of the Christian Association of Nigeria on Ethical Financial Services and Economic Sabotage

The Central Bank of Nigeria approved the license of Non-interest financial institutions in the country in 2012. The approval has generated many issues and religious arguments everywhere in the country. Some supported the initiative to address poverty and financial exclusion, while others perceived Islamizing the financial sector. The study adopted a survey approach, while the questionnaires used and analyzed public perception, specifically in the Plateau State, Nigeria, using Structural Equation Modeling (SEM). The primary data survey questionnaire got 360 respondents. Some feel sensitive enough to oppose the system that is not imposed on any religious or ethical background, while others criticize the entire process of Islamic Banks in Nigeria. The study found that Islamic banks are established based on the fundamental Islamic teachings and originated from the Qur'an and the authentic Prophet Muhammad's teachings, which challenged some conventional financial institutions' practices that indicate a clear note of avoidance of such conventional facilities. Further, indicate that the Christian Association of Nigeria is sabotaging the momentum of Non-interest financial institutions through religious hate, and ignorance and sabotaging government policy to prevent the institutional contribution toward national development and economic growth in the country; using different approaches to frustrate the funding process of some government projects through Non-interest financial institutions. The paper recommends that regulatory bodies of financial institutions, specifically the Central Bank of Nigeria, should clear misunderstandings of the Christian Association of Nigeria towards national development, create awareness, and avoid discrimination in service delivery by pinpointing Islamic banking in the county.

Fenomena Hijrah Pegawai Bank Pada Komunitas XBank Di Kota Makassar

This study aims to describe the motivation for migrating to the Xbank community in Makassar, then describe the community's views on Islamic banks and Xbank's activities after leaving work from conventional financial institutions. The method used in this research is qualitative by conducting field research. The primary data source is direct interviews with the Xbank community in Makassar city and secondary data. The analysis technique used in this research is content-based descriptive qualitative. The results of the study found that the migration phenomenon of the Xbank community in Makassar city was more related to the views of the XBank community towards Islamic banking activities. The motivation for migrating is that they believe that conventional financial institutions contain the common element of usury. The XBank community in Makassar accepts the existence of Islamic banks but instead provides criticism if transactions are not under sharia principles. This research can be input for Islamic financial institutions in carrying out financial practices to avoid transactions Islam prohibits.

Investigating Financial Reporting Practices in Hybrid Financial Institusions in Indonesia

Hybrid financial institutions are sociopreneur organizations that carry out business activities with the aim of making profits and helping the community. Although these financial institutions make significant economic and social contributions to society, their financial reporting models still do not adequately present economic and non-economic information. This study aims to understand how financial reporting practices in financial institutions that have two functions or are often called hybrid financial institutions (profit motive and social motive) in Indonesia, especially in customary financial institutions Lumbung Pitih Nagari (LPN) in West Sumatra. The research design uses a case study at a hybrid financial institution of LPN. LPN is a customary financial institution whose main purpose of establishment is to help people who live in a village. In addition, this financial institution is also required to generate profit. The data collection technique is an in-depth interview with informants consisting of managers, communities, and other stakeholders. The results of this study show that LPN Limau Manis as a hybrid financial institution still uses financial reporting practices that are no different from conventional financial institutions in general. The types of financial statements produced following conventional financial institutions consist of income statements, statements of changes in equity, balance sheets, cash flow statements and notes to financial statements. While information about the social functions they perform is not reported in specific reports. It is only reported in a standard format in the form of social activity reports submitted at the General Meeting.

Penguatan Pemahaman Jama’ah Masjid Baiturrahman tentang Bahaya Riba dan Keutamaan Perekonomian Berbasis Syariah

There are still many congregations of the Baiturrahman Mosque who do not understand well about the concept of the prohibition of usury in Islam, so that without realizing it, many of them carry out activities which in the view of Islam are classified as usury because of the lack of understanding of asset management in accordance with sharia principles. Based on the problems faced by the community at the Baiturrahman Mosque as described above, the Service Team needs to provide more understanding to the Baiturrahman mosque congregation about the dangers of usury and the importance of understanding and applying sharia-based economic concepts in everyday life. The activities that will be carried out are conducting intensive studies in the form of material exposure, studies and discussions the dangers of usury and the virtues of sharia economics. The implementation method in the activity includes the preparation stage, the implementation stage and evaluation stage. Based on the pre-test and post-test questionnaire data, participants experienced an increase in understanding of Islamic economic principles in Islamic banking by 18%. Understanding of Islamic financial institutions and conventional financial institutions has increased by 15%. Increased understanding of Interest from banks is Riba by 15.75%. understanding of the dangers of Riba increased by 18.5% and an increase in understanding of islamic financial institution products in accordance with sharia principles by 12.75%.

COMPARISON OF SHARIA GOVERNANCE MODEL IN ISLAMIC FINANCIAL INSTITUTIONS BETWEEN THE GCG AND ASIAN COUNTRIES

Sharia governance is one of the fundamental characteristics that differentiate Islamic and conventional financial institutions. Therefore, the understanding related to sharia governance in Islamic financial institutions such as Islamic banking becomes significant. By using a literature study approach, this paper aims to review and compare regulations related to Islamic financial governance in GCG and ASIA countries. The result shows that the GCC countries and the Asia model of Sharia Governance are a huge difference. The GCC countries use the minimalist model of Sharia governance whereas Asian countries still use the interventionist model. The similarity in this term is about the fundamental of the regulations, which are based on the Quran and Hadith.

How Traditional Financial Institutions have adapted to Artificial Intelligence, Machine Learning and FinTech?

Abstract This article analyzes the implications of the financial sector’s recent adoption of artificial intelligence (AI) and machine learning (ML). It identifies the advantages of these technologies in terms of fraud protection, cost savings, and efficiency, while also highlighting worries about conventional financial institutions’, such as banks, insurance and reinsurance institutions, and inability to compete with Fintech firms. The report contributes to the conversation about the influence of modern technology by distilling and classifying the tools deployed in established conventional institutions that resulted in continual development and simplification of internal procedures as well as client service delivery. Given the increased competition in the financial industry, Fintech businesses are critical for conventional financial institutions to stay afloat in today’s changing world. The study is directed at researchers who are still in the early phases of investigating the artificial intelligence field in the financial sector. The study reviews prior research that documents the changes occurring inside financial institutions from a global perspective as a result of Fintech and the integration of new technologies. The goals of the paper are fulfilled by (1) furthering theoretical studies on the issue, (2) increasing awareness of the financial industry’s developments, and (3) gathering proof of the influence artificial intelligence and machine learning have had so far.

Penerapan RegTech dalam Penyelenggaraan Fintech Lending di Indonesia

Financial Technology is relatively new innovation in the financial sector in Indonesia, both in terms of regulation and in practice. Nevertheless, fintech lending is in fact able to become one of the fastest growing fintech fields among any other categories of fintech in Indonesia today, adapting to the needs of the existing society, and even being able to compete in business-terms with conventional financial institutions, such as banks, in terms of providing loans, financing and capital provision. However, the implementation of fintech lending that has special characteristics in the form of the use of information technology in its business implementation surely must be regulated, supervised, and supported by regulations, supervisory authorities and infrastructure oriented and based on information technology, namely one of the solution through RegTech (Regulatory Technology) instruments. This study was conducted to find out whether the regulations and infrastructure prepared for the implementation of fintech lending in Indonesia have included the concept of RegTech as required in the practice of implementing fintech. This research was made with a juridical-normative research method using statutory and conceptual approach. The results of this study are concluded that the majority of mechanisms for implementing fintech lending in Indonesia are still carried out manually and have not been comprehensively regulated, thus requiring improvements to regulations and monitoring mechanisms, especially in maintaining financial service stability and ensuring consumer protection and data protection that need to be supported by adequate information technology infrastructure.

Ijarah dalam Sistem Perbankan Syariah

Lease transactions in conventional banking do not transfer property rights, which means that when the lease expires, the goods are returned to the owner of the leasing object, which generally does not require the services of a financial institution. Another case in practice is because of Islamic banking financing which is known under a lease agreement called ijarah. In Islamic banking, al-ijarah is divided into 2 types, namely mutlaqah ijarah or leasing, operating lease is a process that we usually encounter in daily economic activities. In the context of Islamic banking, ijarah is a lease contract in which a bank or financial institution rents out equipment, buildings or goods, to one of its customers by charging a fee that has been determined with certainty in advance. Meanwhile, al-Ijarah al-Muntahia bit-Tamlik is a kind of fusion between a sales and lease contract or a lease contract which ends with the ownership of the goods being in the hands of the lessee. The nature of the transfer of ownership also distinguishes it from ordinary leases, which exist in conventional financial institutions. The concept of al-Ijarah in Islamic banking as a lease in general, but what distinguishes it is that in Islamic banking there is a lease which at the end of the contract, the customer is given a choice/option to own the goods or not, generally called a lease purchase.

Optimalisasi Fintech Syariah Sebagai Agen Investasi Sukuk Negara

The development of the Islamic finance industry has provided a variety of Islamic financial products. Islamic finance is not only limited to products in Islamic banks. Currently, Islamic financial products have developed, including the presence of Sukuk Investment products. The existing Sukuk consist of state Sukuk and corporate Sukuk. In the marketing process, state Sukuk is still dominated by conventional financial institutions, even though Sukuk itself is a product of Islamic finance. one of the Islamic financial institutions as a Sukuk agent can go through sharia fintech. The purpose of the study was to determine the development of state Sukuk and the development of sharia fintech institutions. and to find out the optimization of sharia fintech as a state Sukuk investment agent. The research method used in this research is qualitative. The data source used is secondary data. The data has been presented by the Financial Services Authority (OJK) and the Directorate General of Financing and Risk Management (DJPPR) of the Ministry of Finance. The data analysis technique used in this study is descriptive qualitative, which describes the development of state Sukuk products, as well as the development of sharia fintech peer-to-peer lending (P2P) sharia, as well as forms of optimizing sharia fintech as a selling agent for state Sukuk products. The results of this study show that the development of state Sukuk of the SR type in 2019 reached 46.07 percent and ST type reached 8,436,570,000,000. As for the development of sharia fintech, sharia fintech assets amounted to 50,591,727,786 rupiahs or 1.4 percent of the total fintech assets as a whole. The number of fintech that has been registered and licensed at the OJK is 161 companies, and 7.5 percent are sharia fintech or 13 companies. Optimizing sharia fintech as a state Sukuk investment agent needs to be done, by involving sharia fintech as Sukuk. Reversing the essence of Sukuk as a sharia product can be obtained through sharia fintech, to be more convincing. The character of sharia fintech by utilizing technology can provide access to state Sukuk sharia investment.

The Comparison of The Islamic and Conventional Bank Performance before and During Covid-19 Pandemic in Indonesia

This study aims to determine and compare the financial stability of banks during the crisis which is still being debated by taking the period before and after the covid 19 pandemics. This study uses a sample of all transactions of conventional banks and Islamic banks throughout Indonesia that are recorded by the Indonesian financial services authority. With a population of all conventional financial institutions and Islamic financial institutions, both registered and unregistered by Indonesian financial services authorities throughout Indonesia. The type of data in this study is secondary data sourced from the Indonesian financial services authority. To find out and compare the performance of conventional banks with Islamic banks and the resilience of conventional banks and Islamic banks to shocks, an analysis of the financial behavior of data in commercial banks was carried out using Threshold Autoregressive. We find that Islamic banks tend to be more stable in facing financial challenges due to the COVID-19 pandemic compared to conventional banks. The performance of conventional banks was very good in the period before the COVID-19 pandemic. However, when the coronavirus pandemic began to be reported, there was a huge decline in performance. Conventional bank recovery efforts have not been able to return to the original track. Conventional bank performance is slowing down and it tends to be difficult to return to its original performance value (before the COVID-19 outbreak). However, from the graph of performance forecasting between Islamic Commercial Banks and Conventional Banks, it can be seen that there is a difference in performance stability between Islamic Commercial Banks and Conventional Banks facing the COVID-19 pandemic.

URGENSI PERLINDUNGAN HUKUM TERHADAP DATA PRIBADI PEMINJAM DALAM LAYANAN APLIKASI PINJAMAN ONLINE

The flow of globalization is increasingly experiencing rapid development. The presence of online loans as a form of financial technology (fintech) is the impact of technological advances and many offer loans with easier and more flexible terms and conditions compared to conventional financial institutions such as banks. Personal data breaches have occurred in the RupiahPlus case. RupiahPlus is an application-based online loan provider. In this case, some of its customers have complained that their personal. data has been disseminated by RupiahPlus without notification and the permission of the owner of the personal data. Dissemination of personal data is carried out by sending messages to all telephone contacts owned by the borrower, where the message contains the borrower's personal data, the amount of debt borrowed, and notifies the person concerned to make debt payments from the borrower. This study uses Statute approach to study the synchronization of campus regulations regarding the prohibition of the use of the veil with the applicable laws and regulations so that later it produces a descriptive conclusion. The right to personal data protection is a right that has been guaranteed by laws and regulations, especially regulated in the provisions of POJK NUMBER 77 / POJK.01/2016 Article 26 letter a, so that financial services business actors are required to comply with the personal data of consumers who use online loan application services. The repressive legal protection that can be done by consumers who are victims of misuse of personal data by online loan business actors is to file a lawsuit against the law based on Article 1365 of the Civil Code to issue compensation from the consumer.

Improvement of Community Economic Independence Through Sharia Micro Financial Institution in Padamulya Village, Pasirkuda Cianjur District

Lack of public understanding of Islamic economic principles is one of the reasons people use conventional financial services institutions. And the existence of official financial institutions and based on sharia is very far from the residence of the Padamulya Village community. The solution to the problem is firstly by providing understanding to the public about the principles and values of Islamic economics, so that the community is able to economically in accordance with the provisions of religion and aware of the dangers of usury. Secondly, by presenting financial institutions that are official and in accordance with Islamic economic principles, so that people will be easier when they will save money from their agricultural products and help people who have Micro and Small Business. The output target that the author made was in the form of making an article entitled "Increasing Community Economic Independence through the Initiation of Sharia Microfinance Institutions in Padamulya Village, Pasirkuda District, Cianjur Regency". The result of the LKMS Initiation program was the establishment of Padamulya BMT located in Padamulya Village, Pasirkuda District, Cianjur Regency. The BMT can be utilized by the people of Padamulya Village to use Islamic financial services such as savings, financing and ZISWAF management that can help the economy of the middle and lower classes.Keywords: Economic independence, LKMS initiation.

AKSELERASI PETUMBUHAN EKONOMI SYARIAH DALAM KONTEKS POLITIK EKONOMI DI INDONESIA

Based on statistical data, there is a tendency for a decline in the performance of Islamic banks, which is characterized by stagnation in market share growth that has not reached the target in recent years. There are several factors that are suspected to be obstacles to the development of the Islamic banking industry in Indonesia, ranging from the inadequacy of human resources to the ambivalence between the concept of sharia and operations in the field. The complexity of the problem has an impact on the low public trust about the existence of Islamic banks among conventional financial institutions. As a result, the enthusiasm and response of the public towards Islamic financial products and services in the banking sector, insurance, capital markets and other sectors have become flat, and instead become an obstacle to the growth of assets and market shares of the Islamic financial industry. For this reason, cooperation between stakeholders is needed so that the problems in the development of Islamic banks are not only sourced from one aspect, but almost all aspects from upstream to downstream, starting from regulation, human resources, product quality, quantity of Islamic banks and also the level of education and public understanding. the product is still very minimal can be resolved properly to support the sustainability and development of the Islamic economy.