Financial Institutions In Terms Research Articles

BMT's Role as a Strategic Partner of Sharia Banks: Reviewing the Effectiveness of Channeling Programs in Creating Islamic Financial Inclusion

This study aims to examine the role of Baitul Maal wa Tamwil (BMT) in increasing the liquidity of Islamic banks in Indonesia. This research uses qualitative research methods with a case study approach. The data used in this study came from several BMTs that have cooperation with Islamic banks in terms of liquidity. The data collection techniques used in this study were observation and documentation. The data analysis technique used in this study is qualitative data analysis with a descriptive analysis model. The results of this study show that BMT acts as a strategic partner of Islamic banks in terms of liquidity, both through the placement of deposit funds, the purchase of Islamic money market instruments, the distribution of productive financing, and the development of Islamic financial inclusion. BMT also has a fairly high liquidity performance, with ratios that show good numbers and are in accordance with standards set by relevant authorities. BMT is influenced by internal and external factors that affect its liquidity, such as BMT size, capital, profitability, asset quality, market sensitivity, and macroeconomic conditions. BMT has differences and similarities with Islamic banks and other non-Islamic bank financial institutions in terms of liquidity, depending on its characteristics, scale, and scope of business. This research provides theoretical and practical implications for the development of theory and practice of liquidity management of Islamic banks and non-Islamic bank financial institutions in Indonesia, as well as providing suggestions for further research.

Artificial intelligence algorithms and cloud computing technologies in blockchain-based fintech management

Research background: Fintech development shapes corporate investment efficiency and economic growth with innovative tools, and can decrease financing constraints of enterprises, enabling direct and indirect financing and furthering inter-bank competition. Crowdfunding- and blockchain-based fintech operations harness deep and maching learning algorithms, augmented and virtual reality technologies, and big data analytics in mobile payment transactions. Purpose of the article: We show that fintechs have reconfigured financial service delivery by harnessing AI-based data-driven algorithms and cloud and blockchain technologies. Fintech optimizes financial organization and services, economic structures and growth, data analysis, and digital banking performance. Machine learning algorithms can streamline payment operation capabilities and process promptness, ensuring smooth operational flows, assessing risks, and detecting frauds and money laundering by historical data and customer behavior analysis across instant payment networks and infrastructures. Methods: Quality tools: AXIS, Eppi-Reviewer, PICO Portal, and SRDR. Search period: July 2023. Search terms: “fintech” + “artificial intelligence algorithms”, “cloud computing technologies”, and “blockchain technologies”. Selected sources: 40 out of 195. Published research inspected: 2023. Data visualization tools: Dimensions and VOSviewer. Reporting quality assessment tool: PRISMA. Findings & value added: Fintech development enables organizational innovation by mitigating information asymmetry and financing limitations while providing financial assistance and tax incentives in relation to products and services. The fintech growth has influenced the dynamic intermediary function of financial institutions in terms of sustainability and economic development. Fintech and natural resources negatively influence, while green innovations and financial development further, environmental sustainability.

Systemic Risk Spillover Effects among China’s Financial Institutions: Evidence from the Spatial Econometric Model

This study investigates the spillover and contagion effects of systemic risk among Chinese financial institutions in terms of the conditional Value-at-Risk method and spatial econometric techniques. We construct different representative spatial weight matrices to demonstrate various risk connective categories and contagion channels. The spatial autoregression model is built to reveal the different magnitudes of systemic risk contagion effects and extended as the spatial quantile regression model to measure the change in spillovers across quantiles. The results highlight that the spatial agglomeration pattern of institution-level systemic risk is highly concentrated within the same sector but highly disparate between the different sectors. The closeness of the asset price channel and the information channel would enhance the systemic risk spillover effects among institutions. The higher the single institution’s systemic risk level is, the stronger its spillovers among all of them within the same financial department, yet contrarily, the spillovers are larger at lower quantiles between different sectors due to the disparate spatial tendency of systemic risk. Besides, the spillover effects across quantiles indicate the higher tail contagion of systemic risk spatial spillovers, especially during 2015 A-share market crash and 2020 COVID-19 outbreak.

CLUSTER APPROACH IN ASSESSING THE PRE-WAR LEVEL OF FINANCIAL INCLUSION OF POPULATION FROM DIFFERENT REGIONS OF UKRAINE IN THE MARKET OF BANK LOAN

The problem of financial inclusion of the population is relevant in developing countries, including Ukraine. Analysis of the state of financial inclusion demonstrated a fairly low level of financial services provided to Ukrainians. The purpose of the article is to assess the level of financial inclusion of households in the regions of Ukraine in the market of bank loans in the pre-war period using cluster analysis tools and justify the possibility of their application for the formation of an effective state-regional policy for the restoration and development of the affected territories, in particular, in the context of ensuring access to bank loans. Cluster analysis was the methodological tool of the study. An algorithm of clustering of regions of Ukraine by the level of financial inclusion of the population in the market of bank loans was designed, taking into account such indicators as the number of bank branches, amount of a loan for one person, interest rates on loans to individuals in the regions. As a result of cluster analysis, four clusters were formed with low, middle, high and advanced-level regions by the level of financial inclusion of the population in the market of bank loans. Most Ukrainian regions (15) were determined as having a low level of access to the market of bank loans. This made it possible to conclude that these regions need special attention from the central and local authorities, as well as from financial institutions in terms of facilitation of public access to banking services. The need to strengthen the financial inclusion of the population in Ukraine during martial law and in the post-war period, taking into account the needs of de-occupied and front-line territories, as well as regions with a large number of internally displaced persons, is substantiated.

Penguatan Hukum Ekonomi Syariah pada Lembaga Keuangan Berdasarkan UU Nomor 21 Tahun 2011 tentang Otoritas Jasa Keuangan

There are three objectives in this research, namely to find out the concept of sharia economic law in financial institutions in terms of Law Number 21 of 2011 concerning OJK (Financial Services Authority), strengthening sharia economic law within the Financial Services Authority, and handling sharia economic law problems. by the Financial Services Authority. In this study through the stages of problem identification, preparation of activity proposals, and program implementation. By using a normative legal research method (juridical-normative) with a statutory approach and a concept approach. In terms of data collection, library research is the technique used in collecting our research data for content analysis in order to obtain normative data. The concept of sharia economic law at the Financial Services Authority is related to sharia economics, the strengthening of sharia economic law is contained in Law Number 21 of 2011 concerning the Financial Services Authority, if there are sharia banking problems this can be resolved by using a court or through an institution organized by the Authority. Financial Services, namely Alternative Dispute Resolution Institutions.

Impact of COVID on Micro Finance Institutions

COVID-19 pandemic has affected acutely the financial system and created several challenges to the financial institutions in terms of their existence and raised a question about its survival in future. Micro finance is playing a vital role in enhancing the financial strength of the society. Micro finance institutions offer financial services in the form of loans for various purposes to support low-income people and weaker sections of the society who have less access in commercial banks. The COVID-19 pandemic has worsened the liquidity conditions of low-income people and small business owners and they are unable to gather funds for their personal and business needs due to widespread lockdowns. The external private finance is falling due to the reason that the borrowers are unable to repay their loans and it has started to create pressure on institutions which cannot repay their deposits on time due to its poor liquidity conditions. Hence, this paper has made an attempt to study the impact of COVID-19 pandemic on micro finance institutions and measures taken to combat the situation.

Crisis Management Strategy in Handling Financial Sector Scandals in the Digital Transformation Era

This paper provides empirical evidence of how scandals could affect financial institutions in terms of market stock price, yearly returns, and the length of time it took to regain the public’s trust and ultimately recover in the long run. Moreover, we carefully examine the importance of dealing with crisis management in the digital transformation era’s financial service sector. We specialize in crisis management, which aims to mitigate the destruction of companies’ public crises in existence. Finally, based upon investigating scandals in public and private financial sectors in the United States, we list 21 strategic crisis management plans at the end of the paper to handle financial services sector scandals in the digital transformation era.

Analisis Fatwa DSN Nomor 123/DSN-MUI/XI/2018 tentang Dana TBDSP dalam Perspektif Sosiologi Hukum

The purpose of this study is to analyze the Fatwa of the National Sharia Supervisory Board No: 123/DSN-MUI/XI/2018 according to sociology of law. This qualitative research uses descriptive-analysis method, which describes the management of TBDSP funds in the DSN fatwa, then it is analyzed using the sociology of law theory and this research uses a sociological-normative approach. The results of this study indicate that Fatwa No: 123/DSN-MUI/XI/2018 was made on the consideration that Islamic Financial Institutions in carrying out their activities need guidelines for using non-halal funds and there is no dhawabith and hudud regarding non-halal fund management. So that it became known the term TBDSP Fund, which means that non-halal funds obtained by Islamic Financial Institutions cannot be recognized as income. These funds must be channeled for social activities and must be separated into special accounts based on what is stated in the fatwa. Changes in regulations related to non-halal funds for Islamic Financial Institutions are influenced by social, economic, and scientific factors. So that the existence of a fatwa regarding the use of TBDSP funds can be said to be an answer to the need for change in Islamic Financial Institutions in terms of non-halal fund management. It should be that the DSN Fatwa regarding the use of TBDSP Funds can be applied by Islamic Financial Institutions and asks DPS in Sharia Financial Institutions to carry out maximum supervision.

Spanish financial institutions facing the challenge of digitalization: The case of payment systems

Technological development has brought about major changes in all aspects and spheres of society. Among the various environments where technological applications have brought improvements and transformed the usual way of operating, we highlight the financial sector. Indeed, technology has substantially modified the processes and mechanisms on which its operation is based, especially in the area of payments, due to the need for reliability, security and immediacy to improve the way in which money is transmitted between the different agents that interact in it. This digitization of payment systems has been made possible by various factors, including the emergence of new business models and the emergence of large technology companies, as well as the application of new technologies that streamline payment processes. This has forced the financial sector and, specifically, financial institutions, the main drivers of the financial system, to accelerate innovation in the payments sector in order to face these new challenges. This paper analyses payment systems, how they work, the services they provide and the challenges and opportunities that can be identified as a result of technological innovation in the financial sector. It also presents the strategies being followed by Spanish financial institutions in terms of the development of new services and capabilities to cope with these changes.

ФІНАНСОВЕ ЗАБЕЗПЕЧЕННЯ ВІДТВОРЕННЯ ЗБАЛАНСОВАНОГО СІЛЬСЬКОГОСПОДАРСЬКОГО ЗЕМЛЕКОРИСТУВАННЯ

An important component of forming the basis for the balanced development of the domestic agricultural sector is the reproduction and protection of land resources. A significant part of the problems here are directly related to the insufficiency and inefficiency of financial support for agricultural land use. The purpose of the article is to reveal the financial and credit mechanism for ensuring balanced land use and to develop proposals for improving the financial support for the reproduction and protection of agricultural land through the introduction of tax incentives. The financial and credit mechanism for stimulating balanced agricultural land use can be defined as structurally complex and diversified; it has its own features to ensure its implementation and influence on the subjects of financial and credit relations in the direction of regulating their activities. It is established that financial relations in agricultural land use combine a very large chain of relationships between the state, enterprises, individuals and financial institutions in terms of financial support for the reproduction of agricultural land use. The financial and credit mechanism for stimulating balanced agricultural land use can be defined as structurally complex and branched; it has its own features to ensure its implementation and influence on the subjects of financial and credit relations in the direction of regulating their activities. It is proved that it is necessary to create such conditions of management that unbalanced use of land became economically unprofitable. The level of profitability and income of land users should become dependent on the degree of achievement of balanced agricultural land use, which is determined by a set of agrochemical indicators of the quality of land used for agricultural activities. In order to financially ensure the reproduction of balanced agricultural land use, the introduction of tax incentives is proposed. These include the formation of general favorable tax conditions for enterprises in the agricultural sector of the economy and the introduction of targeted tax benefits. It is established that the use of the above financial and credit levers and incentives for the development of balanced land use is the most accepted in today's challenges, because it has minimal impact on the expenditure side of the state budget.

ДІЯЛЬНІСТЬ НАЦІОНАЛЬНОГО БАНКУ УКРАЇНИ ПІД ЧАС СПАЛАХУ ПАНДЕМІЇ COVID-19

The article considers the impact of the COVID-19 pandemic on the regulatory activities of the National Bank of Ukraine. The interdependence of the banking and economic systems and the impact of their inefficient interaction on banking in general and each individual commercial bank in particular are analyzed. It is established that before the onset of the pandemic crisis in the world, the banking system of Ukraine was characterized as stress-resistant, taking into account the reforms of liquidity and recapitalization. The stability of the banking system is affected by economic pressures caused by the spread of coronavirus and lower oil prices. According to one of the world’s three reputable rating agencies, Fitch Ratings, the level of pressure on banks depends on the depth and duration of the economic downturn, specific risks to the national economy and external finances (for example, tourism revenues or remittances), national government measures and individual banks. The implementation of anti-crisis measures developed by the National Bank of Ukraine as tools to increase financial and economic security in the country as a whole, and financial institutions in terms of increasing banking risks caused by the outbreak of the COVID-19 pandemic. The spread of this infection also has negative consequences for the economy and financial system of Ukraine. Therefore, the National Bank of Ukraine has introduced a system of anti-crisis measures during quarantine in the country. The NBU covers information about events in the economy through its own website, social media pages, and the media. These measures are implemented to mitigate the impact of coronavirus disease on citizens and businesses, and to ensure the quality and smooth operation of the financial system. The banking system continues to operate, without imposing any restrictions on the operation of banks and their operations. As a result of the study, a system of measures of national support for the banking sector by the National Bank of Ukraine and the International Monetary Fund was proposed through the prism of a number of guidelines and regulatory points, which are supporting instruments rather than control and regulatory ones.

Default Probability by Employment Status in South Korea

This paper analyzes the factors behind the loan defaults of borrowers by their employment status (whether they are self-employed) using the Korea Consumer Credit Panel data held by the Bank of Korea, and estimates the probability of default and the fragility of the financial sector. This is done using the concept of exposure at default for individuals. Using individual data on loans and delinquencies, we divide the spreads of personal loans into spreads determined by loan characteristics and spreads based on credit ratings to examine how these factors determine the probability of default among self-employed and non-self-employed borrowers. We find that the marginal effect of the spread based by the characteristic of loans and the borrowers’ credit ratings on the probability of default is greater to the self-employed borrowers, as compared to the non-self-employed borrowers. Especially, the effect of the spread by credit rating is stronger than the other. When we measure the vulnerability of financial institutions in terms of households’ probability of default, the institutions’ exposure to default of the self-employed affects to institutions’ vulnerability more than those of the non-self-employed. Therefore, more attention should be paid to the connectedness of financial institutions to household debt, and, in particular, the financial status of the self-employed.

X ve Y Kuşaklarının Kredi ve Borç Eğilimleri Analizi: Ordu İli Örneği (Credit and Debt Tendencies Analysis of X and Y Generations: Case of Ordu Province)

Purpose - In this paper, where intergenerational loan and debt trends are investigated, credits received by X and Y generations from banks will be analyzed according to various factors. In the study, it will be investigated whether these two generations that were born, grown up and lived in different time intervals differed in the loans and services they received. The main purpose of the research is to examine whether it is rational to apply different generational allocation policies to each generation while determined credit allocation policies by banks or other lenders. Design/methodology/approach – In the research, the data of the Public Credit Registry (PCR) of a total of 250 people, including 125 X generation and 125 Y generation, who applied to a private bank operating in Ordu province between 1-Jan-2020 and 31-Mar-2020 will be examined and transferred to the SPSS Windows 25.0 program. Data showing the financial trends of the X and Y generations will be analyzed by using the Mann Whitney U test method through determined hypotheses. Findings - Empirical results indicate that it is not rational to apply differentiated loan allocation policies to the X and Y generations of banks and other lenders. We believe that it would be more appropriate to apply a same credit allocation policy for these two generations, which are highly similar in all factors. Discussion - We believe that giving retail loans with a uniform credit allocation policy without making a generation distinction will contribute to banks and financial institutions in terms of risk management and operational costs.

Sosialisasi Literasi Keuangan Syariah Pada Anak Usia Dini

Indonesia is a country with a majority Muslim population. In terms of quantity, it has big potential as a center for the development of Islamic finance. The lack of Islamic financial literacy has made the public do not understand the importance of Islamic financial institutions in terms of both the benefit of the world and the hereafter. The method of implementing this activity is carried out in four stages, namely (1) Planning, (2) Preparation, (3) Implementation, and (4) Evaluation Implementation. At the implementation stage, socialization of sharia financial literacy is carried out to students, teachers and guardians of students and mentoring. The results obtained from community service are the first percentage of understanding and knowledge of financial literacy which increased from 56,5% to 85% both students, teachers and guardians of students viewed from the results of the pretest and posttest that have been given. Secondly, during the mentoring the participants gave a positive response with a percentage of 86% and 100% interested in participating in the second phase of socialization in order to know the positive developments after obtaining mentoring as seen from the results of the questionnaire responses that had been given.

Halal Industry and Islamic Banking: A Study of Halal Ecosystem Regulation in Indonesia

Halal industry lately is developing rapidly throughout the needs of the community. Indonesia is one of the world's largest halal product markets because it has favourable demographic conditions. Regulations on the submission of halal products in Indonesia itself have not led to the use of Islamic financial institutions in terms of the certification assessment. Even though the Qur'an and the hadith have explained that in doing business, how to get capital must also come from halal sources. This study uses a qualitative method by conducting a literature review on related references. The author found that the JPH Law (Halal Product Guarantee), and the halal certification requirements of LPPOM MUI, have not included finance as one requirement or assessment indicators in halal product certification. Financial indicators should be able to be one indicator in the certification of halal products because finance is one of the initial sources (upstream / input) of the creation of halal products.

BRIDGING THE SUPPLY AND DEMAND GAP FOR AFFORDABLE HOME OWNERSHIP IN MALAYSIA: THE ROLES OF GOVERNMENT AND FINANCIAL INSTITUTIONS

Promoting homeownership remains a conundrum in a developing economy in Malaysia. Despite significant initiatives pursued by the government, more needs to be done to promote affordable and sustainable homeownership further. Khazanah Report (2018) provides evidence that housing affordability in Malaysia is worsening compared to one reported in 2015.This study therefore aims to empirically assess the role of government in terms of designing policies to promote the supply of affordable homes and the role of financial institutions in terms of providing home financing. The finding reveals that existing housing policies and government programmes have a significant role in promoting homeownership. The finding further suggests that building and completing more units of affordable homes (as captured by housing stocks) and promoting innovative home financing products (both conventional and Islamic) are the most significant variables in promoting homeownership in Malaysia.

Institutionalising Justice in Islamic Finance

This research paper provides in-depth discourse on how justice can be operationalised in different Islamic financial institutions to achieve the objectives of the Islamic moral economy. The current financial institutions claiming to be Shari’ah compliant are more and more reflecting the behaviour of conventional financial institutions in terms of their impact on society. The paper proposes development of new Islamic financial institutions to endogenise the concept of justice based on the teaching of Qur’an and Sunnah. This will allow actualizing an ideal Islamic society based on equality, co-operation, and welfare with overall objective of the welfare of human beings through development of non-banking-financial institutions such as Islamic social banking, and zakah and awaqf based institutions and eventually promoting economic development. Furthermore, development of such institutions will also contribute to the financial inclusion of society.

Does partial quantity rationing of credit affect the technical efficiency of dairy farmers in Punjab, Pakistan?

PurposeThe purpose of this paper is to empirically investigate the effect of partial quantity rationing of credit on the technical efficiency of dairy farmers in the Punjab province of Pakistan.Design/methodology/approachPrior to the field survey, the authors constructed a theoretical model for clear identification of partial quantity rationed dairy farmers. Data from 154 dairy farmers were collected that represented three districts of the province. The collected data were analyzed in two stages: first, the efficiency level of dairy farmers was estimated using a stochastic frontier approach; second, the authors employed an inefficiency-effects model to estimate the effect of partial quantity rationing of credit on technical efficiency.FindingsThe results revealed that education level of the household head, cross-breed and imported cattle, and electric chaff cutter, all had significant positive impacts on technical efficiency, followed by diversified sources of income. Conversely, the analysis of our key variables, interest rate on principal amount and partial quantity rationing of credit had significant negative effects on the technical efficiency of dairy farmers in selected districts of the Punjab province in Pakistan.Originality/valueThe study will be an important contribution to the existing credit constraints and technical efficiency literature and will particularly help the rural financial institutions in terms of approving the loan amount according to the actual requirements of the borrowers. The study’s findings and subsequent recommendations will be useful for policy makers in achieving the actual production level, bringing down the poverty levels and ensuring food security in the country.

THE RISING OF BANK BAITULMAL: AN INTEGRATIVE INSTITUTION FOR POVERTY ALLEVIATION

Efforts performed in poverty alleviation by Islamic banking and financial institutions in terms of empowering the core poor in the society have been hampered by many constraints. As a result, the core poor are still being financially excluded. This paper attempts to explore constraints faced by Islamic Banking and suggests setting up a new integrative Islamic Financial Institution which could perform the ‘desired’ shari’ah mission, i.e. to alleviate poverty as one of the main objectives of maqasid shari’ah. The method used here is exploratory analysis to identify problems and come up with the solution. It is found that there are several hindrances for Islamic Banking and Financial system internally and externally to perform poverty alleviation. Internally, the driven profit mission of these institutions, the fractional reserve system, lack of financial support from government to support the core poor and business failures, and the lack of sufficient social capital improvement, while externally; the lack of political will, lack of sufficient financial regulation and framework for dealing in shari’ah court, the use of paper currency only and the inflationary system, and less integrated system with Baitulmal institution.

Bank Restructuring and Access to Financial Services: The Spanish Case

AbstractThe Spanish bank sector has restructured extensively since the crisis erupted in 2008 in an attempt to correct the imbalances accumulated during the preceding boom years. Thanks to this restructuring effort, Spain's branch network has been pared back by 32 percent, prompting questions about potential ramifications for the population's access to financial services. Against this backdrop, this paper quantifies, at the municipal level, the segment of the population without access to a bank branch in their home town between 2008 and 2015, paving the way for analysis of the impact of the restructuring effort. It also analyses the role played by the three kinds of deposit institutions in Spain in providing access to financial services via their branch networks. The results show that although the percentage of the Spanish population without access to a branch in their home town has risen, the increase has been small, albeit marked by significant differences from one province to the next. The savings banks (including the former cajas that have converted to banks) are still the most important financial institutions in terms of facilitating branch access to financial services.