Development Of Islamic Finance Research Articles

Peran KNEKS dan Master Plan Ekonomi Islam Indonesia

The National Committee for Sharia Economy and Finance (KNEKS) is an independent non-structural institution established in 2016. KNEKS has a focus on making economic development efforts to support the improvement of economic growth and the quality of its human resources. The National Committee of Finance and Sharia (KNEKS) is mandated to expand, and advance the development of the Islamic economy in order to support a development. This research uses qualitative methods by applying qualitative descriptive methods. At the Plenary Meeting of the National Committee for Sharia Finance (KNKS) on February 5, 2018, the President of the Republic of Indonesia directed KNKS stakeholders to prepare a Sharia Economic Master Plan that focuses on the development of the real sector of the Islamic economy or known as the halal industry. This is done to encourage the development of Islamic finance that supports national economic development. The role of Islamic finance cannot stand alone without the development of the real sector. Therefore, it is considered necessary to compile an Indonesian Sharia Economic Masterplan that can be a reference in the development of the Islamic economy in the country.

The influence of institutional quality, economic freedom, and technological development on Islamic financial development in OIC countries

This study investigates the relationship between Institutional quality, Economic freedom, technological advancement, and Islamic financial development in selected OIC countries. This study employs the panel estimation method to examine annual data pertaining to Islamic bank industries across 22 countries, sourced from the SESRIC database, from 2013 to 2021. The findings show that the overall quality of institutions and economic freedom influence Islamic finance development. Further, the contribution of technological development appears when institutional quality indicates higher performance. Despite the predominant correlation observed among institutional indicators, this study, focusing on a comprehensive index, reveals a consistent and significant contribution of institutional quality to the growth of Islamic finance. Furthermore, this study's findings show that institutional quality and economic freedom are related; yet, the methods by which the foundations of each indicator influence financial development differ. The findings of this research underscore the importance of urging policymakers, particularly governmental authorities, to prioritize the development of policies and initiatives aimed at fostering a healthy and conducive environment. Emphasizing practical and transparent institutional frameworks is essential for cultivating a well-regulated economic environment.

A PERFORMANCE ASSESSMENT OF SELECTED ISLAMIC STOCK EXCHANGES

A study assessed the performance of several Islamic stock exchanges, including Bursa Malaysia and the Dubai Financial Market, to gauge their effectiveness in serving investors and fostering Islamic finance growth. They analyzed market liquidity, volatility, and risk-adjusted returns to evaluate exchange performance and identify areas for improvement. This research aims to inform market participants, policymakers, and investors about the current state of Islamic stock exchanges and promote their efficiency and competitiveness, ultimately contributing to the development of Islamic finance as a key player in the global financial system. Keywords: Islamic finance, Islamic stock exchanges, performance assessment, market liquidity, volatility, risk-adjusted returns, investor needs, Islamic finance growth, market efficiency, competitiveness.

The development of Islamic banks in Kazakhstan

The purpose of the research this article examines the functioning and future prospects of Islamic finance in Kazakhstan, addressing a relatively underexplored topic in the academic literature. The authors' aim is to examine the historical development of Islamic finance, identifying the obstacles that have hindered its progress, especially given the limited progress made in the last decade.Research methodology – includes applied research methods, scientific abstraction and systematic approach. The authors derive their conclusions and recommendations from an assessment of the strengths, weaknesses and threats of Islamic finance aimed at reducing the negative impact on the country's economy and financial system.Originality/value of the research - the authors carefully examine Islamic law and the use of Islamic financial instruments. Based on their analysis, recommendations are made to promote the introduction of Islamic financial instruments in the financial sector of Kazakhstan.Findings. Our findings of the study highlight the problems associated with the country's conservative approach to Islamic finance and the presence of various restrictive barriers, both prudential and social. The study can help legislative and executive authorities in developing a program for the development of Islamic finance in Kazakhstan. They can also use these recommendations to improve or create more specific legislation in this area.

Contribution of Islamic Finance to Inclusive Growth: A Comparative Study of the West African Economic and Monetary Union (WAEMU) and North African Countries

ABSTRACT Purpose — In recent years, economic growth in the West African Economic and Monetary Union (WAEMU) has been positive, but the precariousness of the population has remained virtually unchanged. Thus, the search for inclusive growth should be considered, and that is the subject of this comparative study to determine the contribution of Islamic finance to inclusive growth. Design/Methodology/Approach — First, this paper sets up an inclusive growth index to undertake a comparative study between WAEMU countries and North African countries before and after the integration of Islamic finance in order to examine the impact of Islamic finance in these countries. The paper then compares these two areas, WAEMU countries and North African countries, variable-by-variable, using a Student’s t-test over the period 2010–2023. The group of North African countries included in this study is found to have a high Islamic finance development indicator compared to the WAEMU zone. Findings — The results show that growth is more inclusive in North African countries. However, the lack of data on Islamic financial institutions operating in the countries examined makes it impossible to determine the extent of their contribution to the economies of these countries. Originality/Value — The studies that have dealt with this topic have been limited to the relationship between finance and the components of inclusive growth. Others have chosen the quality of economic growth as the variable for inclusive growth. However, this study goes beyond that by showing the influence of Islamic finance on an index of inclusive growth that takes into account eight components. This adds value to the existing literature.

THE ROLE OF FINANCIAL TECHNOLOGY IN PROMOTING GROWTH IN ISLAMIC FINANCE IN THE DIGITAL ERA

Financial technology (fintech) has increased and can potentially drive Sharia finance's growth. This study aims to analyze fintech's role in promoting Islamic finance's growth in the digital era. The research method uses a literature study. A descriptive analysis approach involves breaking secondary data in journals, articles, and statistical reports related to the research topic. The results of this study indicate that the adoption of fintech in Sharia finance is predicted to continue to increase, driven by the millennial Muslim population. Fintech provides opportunities for Sharia financial product innovation. However, the challenges of developing Sharia fintech are significant and related to regulations, compliance risk, and human resources. Some examples of Sharia fintech platforms, such as P2P lending and equity crowdfunding, have been quite successful. The prospects for sharia fintech in Indonesia are positive with the support of digital infrastructure and the millennial Muslim population. Regulatory support is needed so that Sharia fintech is truly compliant and can drive the growth of Islamic finance. Sharia fintech has the potential to be a game changer for the development of Islamic finance in Indonesia. Comprehensive support from regulators and stakeholders can realize the optimal implementation of Sharia fintech for inclusive and sustainable Sharia finance expansion.

Dinamika Lembaga Dan Aset Lembaga Perbankan Syariah Di Indonesia (Total Lembaga Dan Aset 2019 – Mei 2023)

This research utilizes a literature review method to investigate the dynamics of Islamic banking institutions and their assets in Indonesia from 2019 to May 2023. The 2022 Islamic Financial Development Report of Indonesia reveals a significant growth of 15.87% in the assets of the Islamic financial industry. The Financial Services Authority (OJK) emphasizes the resilience of the Islamic economic and financial sector, including Islamic banking, in facing the challenges of the COVID-19 pandemic. In 2022, the assets of the Islamic financial industry reached IDR 2,375.84 trillion, with growth primarily occurring in the Islamic capital market (15.51%) and Islamic Non-Bank Financial Institutions (20.88%). Indonesia remains a key player in the Islamic Finance Development Indicator 2022. This research describes the development of Islamic banking institutions from 2019 to May 2023, highlighting fluctuations in the number of branches and Islamic banks. Consolidation, Islamic financial literacy, and digital technology are key factors shaping the dynamics of this sector. Despite a decrease in the number of Islamic banks, total assets increased from IDR 624.564 trillion in December 2019 to IDR 785.646 trillion in May 2023. These factors support the growth and resilience of the Islamic banking sector in Indonesia.

INFORMAL ECONOMY, ISLAMIC FINANCE DEVELOPMENT, AND SUSTAINABLE DEVELOPMENT IN MUSLIM-MAJORITY COUNTRIES

The paper focuses on the impact of informal economy and Islamic finance development on sustainable development using a panel dataset of 15 Muslim-majority countries from 2016 to 2022. The results based on the feasible GLS and panel quantile regression methods reveal that Islamic finance development has a positive impact on sustainable development. Meanwhile, the informal economy has a negative impact on sustainable development. Assessing the components of Islamic finance development, we further note that only quantitative development/financial performance and knowledge indicators are effective in achieving sustainable development. Besides these key results, GDP per capita, trade openness, and foreign direct investment emerge to be positive factors while the natural resource rents a negative factor in sustainable development. We reason that low productivity and precarious working conditions associated with informal economy may have hindered economic, social, and environmental wellbeing. The positive contribution of the Islamic finance development especially those related to Islamic financial performance and knowledge sharing to sustainable development hints the importance of further development of the Islamic financial sector in these countries.

Institutional quality and Islamic financial development

The Islamic financial system has become an important source of financing for many Muslim and non-Muslim countries. Therefore, this paper examines the role of institutions in facilitating the development of Islamic financial institutions. The study covers the period 2013-2021 for a panel of 11 leading economies in Islamic finance and employs fixed effects with the Driscoll and Kraay (1998) estimator. The results show a positive impact of effective governance on the development of Islamic finance. However, regulatory quality has a significant negative impact on the development of Islamic finance. Thus, we argue for the improvement of critical institutions that include political, legal, governmental, and regulatory aspects.

Islamic finance and economic growth: Global evidence

AbstractWe document the contribution of Islamic finance development to economic growth by studying a global sample of countries engaged in providing Islamic financial services. Fifteen countries are included in the sample based on significant Islamic banking share in total domestic banking assets. Results are documented through the application of the Panel regression (EGLS) method for the period 2001–2020. Findings suggest a positive contribution of the Islamic Financial Services Industry (IFSI) to economic growth in sample countries in multiple regression settings. Additionally, a range of control variables, including domestic credit to the private sector, inflation, and trade openness, contribute significantly to economic growth. We recommend the creation of a conducive environment for the promotion of IFSI on account of the built‐in stability feature and positive contribution to economic growth. We also recommend overall development in the financial sector of selected economies, including credit availability to the private sector and trade openness. Our study helps in understanding the dynamics of economic growth in economies with a dual banking system (conventional & Islamic). This article contributes to the literature by studying a larger sample of countries engaged in the practice of Islamic finance and considering the significance of the market share of assets under IFSI.

Evaluasi Peran Dewan Pengawas Syariah di Indonesia

This research discusses the evaluation of the Sharia Supervisory Board's (DPS) role in the context of Islamic finance in Indonesia through a bibliometric approach. The research focuses on the development of literature related to DPS and its impact on Islamic finance. The rapidly evolving literature in Islamic finance (Siddiqui, 2016; Hasan, 2014) highlights the need for evaluating the role of DPS to ensure its effectiveness (Hasan et al., 2020). The study employs bibliometric methods to identify research trends, main topics, and the impact of literature on DPS. Key references include Siddiqui's work (2016) on the development of Islamic finance in Southeast Asia and Hasan's study (2014) on Sharia governance in Islamic banks. Additionally, Khan (2018) and Kettell (2011) provide in-depth insights into Islamic business ethics and the introduction of Islamic finance. Research findings from this analysis reveal literature gaps and affirm the relevance of bibliometric methods in measuring research impact, identifying trends, and addressing literature gaps. The implications support further research development with a focus on underexplored aspects, including regional exploration and cross-country comparisons. Recommendations involve developing alternative evaluation methods, practitioner case studies, and contributions to policy development related to the role of DPS, utilizing specific performance indicators, and exploring technology implementation in the context of Islamic finance. These suggestions are expected to guide future researchers in developing more in-depth and relevant studies in this continuously evolving domain.

ASSESSING THE INFLUENCE OF THE ISLAMIC FINANCIAL SYSTEM ON INDONESIA'S ECONOMIC GROWTH IN THE LONG AND SHORT RUN FROM 2011 TO 2022

This study aims to see the performance of the Islamic financial system on Indonesia's economic growth in the long and short run from 2011 to 2022. The research method uses the Autoregressive Distributed Lag (ARDL) analysis method. The data used in this study are secondary. Secondary data is a source of data that is not directly obtained from objects through interviews. Secondary data can be obtained from other organizations or individuals such as census data collected. Data from the Indonesian Central Bureau of Statistics (BPS) and the Financial Services Authority (OJK). This study uses economic growth as the dependent variable and the Indonesian Sharia Stock Index and Islamic banking financing as independent variables. The research provides results that the performance of Islamic banking financing and the Indonesian Sharia Stock Index provides positive and significant results on economic growth. Based on the results of this study, it is hoped that the government will further strengthen policies that focus on the development of Islamic finance in Indonesia because improving the performance of the Islamic financial system can improve and encourage economic growth in Indonesia.

Editorial

Editorial

Sharia Financing Online Education: Mudhorobah, Musyarokah and Murobahah Financing

The majority of Indonesia's population is Muslim, which means that it has great potential to become a center for the development of Islamic finance, including Islamic banking. However, the results of an OJK survey found that only 21.48% of Indonesia's population is classified as well-intentioned. This shows the low level of financial literacy of the Indonesian people. It can be said that the development of Islamic finance in Indonesia which is still relatively low is due to the lack of financial literacy of the people. Therefore, this service aims to provide additional insight regarding the introduction of Islamic banking, products produced by Islamic banking, the benefits of using Islamic banking. It is hoped that with this discussion of information, public understanding regarding Islamic banking will increase. To carry out these activities, our team disseminates understanding of Islamic banking by providing information and opening discussions through posts we make on Instagram. In the future, it is hoped that the public will be able to pass on this information to a wider audience and be able to use Islamic banking wisely.

Retraction: Effect of islamic financial development on carbon emissions: a spatial econometric analysis

Retraction: Effect of islamic financial development on carbon emissions: a spatial econometric analysis

Institutional Economics Lens: A Comprehensive Review on the Interdisciplinary Integration between Islamic Studies and Economics

The paper offers on an in-depth exploration of the harmonization of economic paradigms with the principles ingrained in Islamic teachings. It primarily emphasizes Islamic finance as a field and scrutinizes its methodologies to reveal the extent of correlation existing with conventional economic theories. The necessity for a thorough analysis of this fusion arises from the perpetually evolving global financial landscape and the quest to establish financial systems that are not only sustainable but also value-based. Islamic finance, aiming to uphold ethical, social, and environmental dimensions, has gained considerable significance in both Muslim-majority and non-Muslim-majority jurisdictions. This systematic review offers a detailed dissection of the interdisciplinary nature of Islamic finance by elucidating the conceptual underpinnings of the ethical values that guide its operations and the conventional economic principles upon which it stands. Furthermore, this paper unravels the Shariah-compliant financial instruments that differentiate Islamic finance from its conventional counterparts. Through the lens of the existing literature, this review provides the historical context and development of Islamic finance, alongside its various economic applications, which contribute to the amalgamation of faith-based and financial principles observed in this field. Such comprehensive information will foster an improved understanding of Islamic finance while showcasing its potential to address numerous global financial challenges.

THE EFFECT OF ISLAMIC FINANCIAL DEVELOPMENT AND HUMAN DEVELOPMENT ON INCOME INEQUALITY: DOES ISLAMIC FINANCE KUZNETS CURVE VALID IN THE OIC COUNTRIES?

Income inequality is evident in all countries regardless of the level of development or income status. Islamic financial system has Shariah-compliant financial instruments that, when properly utilized, can facilitate equitable income distribution in the OIC member countries. This study examines the effect of Islamic financial development and human development on income inequality in the OIC. The study also analyzes the validity of the Islamic finance Kuznets curve hypothesis. We employ FMOLS and DOLS estimators with data from 20 OIC member countries covering the period from 2012 to 2022. The results show that Islamic financial development and human development promote equitable income distribution. The findings also confirm the validity of the Islamic finance Kuznets curve hypothesis. Thus, to reduce the income gap in the OIC, Islamic financial institutions should expand further via for examples innovation in Shariah-compliant Islamic financial products and services. In addition, policymakers should prioritize policies and programs that can promote Islamic financing and improve human development in the OIC member countries.

Islamic Financial Model: the Problems of Formation and the Demand for Development in Russia in the Current Political and Economic Situation

In the current severe political and economic situation, Russia radically needs revising its development strategy, finding truly reliable and long-term partners. Among the most preferred counterparts for building long-term mutually beneficial relations are the Islamic states, which prefer to use a financial model complaint with their confessional principles. The Islamic financial model is relevant for Russia not only as a tool to attract Islamic investments, but also as a framework for building strong relations with most solid partners. Despite the fact that the Islamic financial model is criticized from the inside, and not devoid of certain shortcomings, the principles laid down in it will be able to ensure the even development of the economy and reduce social tensions through a fair redistribution of income. This article tells about the development of Islamic finance in the world and in Russia.

Kontribusi Sektor Keuangan Syariah Terhadap Pertumbuhan Ekonomi di Indonesia

This paper aims to explain the relationship between the contribution of the financial sector which consists of the development of Islamic banks, the development of sukuk, the development of Islamic stocks, and the development of Islamic mutual funds to Indonesia's economic growth. This study uses quarterly time series data for the period between 2013Q1 – 2020Q4 and the analysis model used is the Vector Error Correlation Model (VECM) by carrying out unit root tests, cointegration tests, Granger causality tests, this study also uses the impulse Response Function, and Variance Decomposition. The results of this study indicate that the development of Islamic banking, the development of sukuk, the development of the Islamic stock market, and the development of Islamic mutual funds have a long-term influence on economic growth. while the development of the Islamic Banking and the development of the Islamic stock market have a short-term influence on economic growth. This research is expected to provide an overview of the condition of Islamic finance in Indonesia so that it can become a reference for relevant authorities in formulating or determining future policies for the development of Islamic finance.

Performance of Indonesia Sharia companies: Does corporate ethical identity matter?

Purpose - The development of Islamic finance has made many Indonesia sharia companies register themselves as part of the Indonesia Sharia Stock Index (ISSI). The government always encourages sharia economic growth that upholds ethics. From the Islamic perspective, ethics is the foundation of all aspects of life. This study aims to analyze the performance of Indonesia sharia companies, by linking the importance of Corporate Ethical Identity (CEI) which is implemented in corporate culture.Method - Quantitative research is reviewed through the annual reports of manufacturing companies registered at ISSI for the 2018 and 2019. Linear regression analysis, along with moderated regression analytics, was used to analyze data from 154 manufacturing companies.Result - The results of the study show that CEI has a positive influence on firm performance, and ownership structure as a moderating variable strengthens the influence of CEI on firm performance.Implication - Sharia companies in Indonesia are advised to increase CEI reporting so as to improve financial performance in accordance with sharia principles.Originality - This study represents the inaugural investigation into CEI within Islamic companies operating in Indonesia, with a specific emphasis on corporate culture. The novelty in this research is the focus on company culture, and what distinguishes it from the mentioned study is the utilization of the ownership structure concept as a moderating variable. It also incorporates the utilization of the ownership structure concept as a moderating variable.