Islamic Products Research Articles

Islamic finance and the global financial crisis: an empirical study

Islamic finance can no longer be dismissed as a passing fad or as an epiphenomenon of Islamic revivalism. Islamic financial institutions now operate in over 70 countries. Their assets have increased more than fortyfold since 1982 to exceed $200 billion. In 1996 and 1997, they have grown at respective annual rates of 24 and 26 per cent.1 By certain (probably overly optimistic) estimates, up to half of the savings of the Islamic world may in the near future end up being managed by Islamic financial institutions. The first Islamic banks were created in the 1970s, at the time when the aggiornamento of Islamic doctrine on banking matters was taking shape. At the time, Islamic banks were typically commercial banks operating on an interest-free basis. Today, as a consequence of broad changes in the political–economic environment, a new generation of Islamic financial institutions, more diverse and innovative, is emerging as the doctrine is undergoing a new aggiornamento. Perhaps the most important development has been the growing integration of Islamic finance into the global economy. There is now a Dow Jones Islamic Market Index, which tracks 600 companies (from inside and outside the Muslim world) whose products and services do not violate Islamic law. Foreign institutions such as Citibank have established Islamic banking subsidiaries, and many conventional banks – in the Muslim world but also in the United States and Europe – are now offering ‘Islamic products’ that are sometimes aimed at non-Muslims.

PENGARUH ISLAMIC MARKETING TERHADAP KEPUASAN DAN LOYALITAS NASABAH PADA BANK MUAMALAT CABANG MALANG

Indonesia is a country with a majority Muslim population. In the context of Indonesian’s, Muslims constitute a very large market share for marketing products, especially Islamic products. One of the products based on Islamic values is Islamic Bank. In Indonesia, Bank Muamalat is the first bank in existence. With such a large Muslim population, on the other hand, Islamic banks do not hold market share in the national banking industry. Islamic banks lag behind other conventional banks. Therefore, a strategy is needed to increase that market share. Islamic marketing is a strategy that can be used to increase customer satisfaction and loyalty at Bank Muamalat Indonesia.This research is an explanatory research with a quantitative approach. The sampling technique used in this study was purposive sampling. Respondents in this study were 120 people. The Machin and Campbell formula is used to determine the number of respondents. The objectives of this study are (1) to determine the effect of Islamic marketing on customer satisfaction; (2) to determine the effect of Islamic marketing on customer loyalty; (3) To determine the effect of customer satisfaction on customer loyalty.The results of this study are (1) Islamic marketing has a significant effect on customer satisfaction; (2) Islamic marketing has a significant effect on customer loyalty; and (3) Customer satisfaction has a significant effect on customer loyalty. So that Bank Muamalat in increasing customer satisfaction and loyalty needs to improve the existing indicators in Islamic Marketing

Literasi Keuangan Syariah Tentang Produk Derivatif Pasar Modal Syariah

This study is to determine the level of Islamic financial literacy of Islamic banking study program students about Islamic capital market derivative products. The data used in this study are primary data obtained from questionnaires distributed to respondents. The instrument used was a closed questionnaire with a Likert scale. The sample in this study amounted to 70 students of Islamic banking study programs in the year 2015/2016. Data analysis techniques in the validity test using Person Correlation, reliability testing using Cronbach Alpha and frequency testing. The results showed that the level of Islamic financial literacy of IAIN Bengkulu Islamic study program students was in the Medium category. The medium category is in the indicators of the level of knowledge and confidence level of 62.88% and 62.91%. Whereas the skill level indicator was 57.74% or still low. This percentage is interpreted into financial literacy level criteria according to Chen & Volpe, which are low (<60%) and moderate categories (60 ≤ 79%).

Islamic Financing as Mechanism for Socio-Economic Development: A Conceptual Approach

This study has critically reviewed both empirical and theoretical literature and the importance of Sukuk being an Islamic finance mechanism as a major player to solve socio-economic problems and human development in general. It is observed that Islamic finance products, especially Sukuk have gained prominence across the globe. Considering part of its importance to human life, previous studies have established that it is working successfully in several countries through the adoption of Sukuk to tackle socio-economic vices such as the alleviation of poverty, lack of shelter, illiteracy that in the long-run has positive impacts on the small and medium enterprise; economic; rural and sustainable development. Given this, the study focuses on the effectiveness of the concept of Sukuk as a mechanism to solve socio-economic vices listed above. As earlier mentioned, the Islamic finance market is succeeding with its approach in a comprehensive manner towards empowering people and their wellbeing. In support of this, the proceed generated from Sukuk investments can be used by investors to improve the education of their wards and personal health condition. The outcome of this study revealed that Islamic finance products, bearing Sukuk in mind is capable of solving socio-economics vices facing the world.

Eksistensi Perbankan Syariah Melalui Dominasi Pembiayaan Profit And Loss Sharing

The beginning of the presence of the first Islamic bank in Indonesia was known as a bank with a profit and loss sharing concept. But in reality, profit and loss sharing financing is no longer dominant in Islamic banks, because non-profit sharing financing is more dominant, especially financing with the buying and selling model. The purpose of this research is to determine the development of financing in Islamic banks, as well as to determine the need to dominate profit-sharing financing in Islamic banks. This research is a qualitative descriptive which shows the development of Islamic bank financing products and the need to restore the concept of profit and loss sharing to be dominant in Islamic banks. The results of this study indicate that the growth of period financing is quite good. Then there are three reasons for the need to dominate profit and loss sharing financing in Islamic banks, namely restoring the identity of the Islamic bank as a profit-sharing bank, being the main differentiator between conventional and Islamic banks, and the opportunity to grow the real sector with greater income.

Ijtihad From Friends Of The Prophet Muhammad In Making Justice Law


 This study explains that ijtihad existed when the companions of the Prophet Muhammad were still alive and continued to develop along with the development of Islam. Ijtihad was born because it is a logical reflection of the struggles of various situations in society that require solutions to be found. However, it should be noted that not everyone can perform ijtihad because ijtihad must use the science of ushul fiqh. Ijtihad, which is carried out carelessly can produce a perverted legal product, as is the case today. Therefore, through this study, the author discusses the ijtihad practised by the companions of the Prophet Muhammad before the emergence of the science of ushul fiqh. The purpose of this discussion is to find out whether the licensed products that were born before the emergence of ushul fiqh science are legally flawed or not. After conducting an in-depth study, it was found that even though at that time the science of ushul fiqh had not been recorded in one book, the companions of the Prophet Muhammad were able to formulate and produce Islamic law products precisely. This happens because they master the science of ushul fiqh and keep it well in their memory.

Schumpeter’s creative destruction and the credit crunch of 2007–2008: an Islamic banking perspective

PurposeThis paper aims to compare products traded in secular and Islamic banking environments prior to the credit crunch of 2007–2008; to locate the comparison in a Schumpeterian model of creative destruction of dynamic innovation in the capital markets; and to evaluate the implications for diversity of investor product choice.Design/methodology/approachFinancial products are critiqued using qualitative criteria, including underestimation of risk implicit in mortgage-backed securities and securitisation, excessive speculative activity in credit default swaps and the magnification of leverage and volatility. Comparable Islamic products are considered for the extent to which they facilitate the same precursors of market crises.FindingsInnovation in secular financial markets has traditionally led to asset bubbles, underestimation of risks and market exuberance. Islamic banking constrains creativity by prohibiting risk transference and disconnection of financing activity from social context and economic purpose. As such, the latter reduces Schumpeterian creative destruction but at the cost of reduced investor choice and market liquidity. Restriction of the reallocation of risk between those who do not wish to hold it and those who do dampens innovation but would have prevented the trading of products which contributed to the credit crunch.Originality/valueThe constraining effect of Islamic banking upon creativity and innovation is considered alongside its capacity to reduce market volatility, speculation and systemic instability. Schumpeterian theory deepens the analysis in terms of the drivers of innovation and market collapse.

Pengembangan Exchange Trade Fund Syariah Indonesia: Peluang dan Tantangan

This paper aims to discuss the opportunities and challenges of developing Sharia Exchange Trade Fund (ETF) investment products in Indonesia. ETF is an investment product in the capital market that collaborates stock and mutual fund products that can collectively be traded on the capital market. This will provide attractive new investment opportunities for investors who are concerned about sharia investment. With the consideration that Indonesia's population is predominantly Muslim, then of course Islamic investment products will attract them. ETFs have the following advantages: easy and flexible process of ownership and transfer, low cost and risk, wide coverage because they are like investing in several portfolios at once, and the process is transparent. In particular, Islamic ETFs have the advantage in the aspect of ensuring product halalness because their portfolios are always monitored by the sharia supervisory board in each investment manager as the manager. On the other hand, Islamic ETFs are faced with challenges related to the low literacy of the Muslim community about investing in the capital market that has sharia products.

THE EFFECT OF ROA, FDR, AND NPF ON THE PROFIT-SHARING RATE FOR MUDHARABAH DEPOSIT IN BPRS, INDONESIA

Until now, Islamic banking has grown very rapidly. This can be seen from the number of Islamic products that continue to grow and develop. One of them is mudharabah deposit. The profit-sharing rate that is characteristic of mudharabah deposits is the public's appeal to deposit their funds in banks, especially mudharabah deposit products. This study aims to determine the effect of financial ratios on the profit sharing rate of BPRS mudharabah deposits in Indonesia. The population used is the monthly financial reports of all BPRS in Indonesia from January 2012 to April 2018 in the form of time series data. The variables used in this study are Return on Assets (ROA), Financing to Deposit Ratio (FDR), and Non Performing Financing (NPF) as independent variables, and the profit sharing rate of mudharabah deposits from Bank Pembiayaan Rakyat Syariah (BPRS) as the dependent variable. Simultaneously, the variables ROA, FDR, and NPF together have a significant effect on the profit sharing of BPRS mudharabah deposits in Indonesia. Meanwhile, partially ROA has no significant effect on the profit sharing of BPRS mudharabah deposit in Indonesia. The FDR has a positive and significant effect on the profit sharing of the mudharabah deposits of Islamic rural banks in Indonesia. As well as NPF has a negative and significant effect on the profit sharing of mudharabah deposits in BPRS in Indonesia.

THE EFFECT OF ROA, FDR, AND NPF ON THE PROFIT-SHARING RATE FOR MUDHARABAH DEPOSIT IN BPRS, INDONESIA

Until now, Islamic banking has grown very rapidly. This can be seen from the number of Islamic products that continue to grow and develop. One of them is mudharabah deposit. The profit-sharing rate that is characteristic of mudharabah deposits is the public's appeal to deposit their funds in banks, especially mudharabah deposit products. This study aims to determine the effect of financial ratios on the profit sharing rate of BPRS mudharabah deposits in Indonesia. The population used is the monthly financial reports of all BPRS in Indonesia from January 2012 to April 2018 in the form of time series data. The variables used in this study are Return on Assets (ROA), Financing to Deposit Ratio (FDR), and Non Performing Financing (NPF) as independent variables, and the profit sharing rate of mudharabah deposits from Bank Pembiayaan Rakyat Syariah (BPRS) as the dependent variable. Simultaneously, the variables ROA, FDR, and NPF together have a significant effect on the profit sharing of BPRS mudharabah deposits in Indonesia. Meanwhile, partially ROA has no significant effect on the profit sharing of BPRS mudharabah deposit in Indonesia. The FDR has a positive and significant effect on the profit sharing of the mudharabah deposits of Islamic rural banks in Indonesia. As well as NPF has a negative and significant effect on the profit sharing of mudharabah deposits in BPRS in Indonesia.

Examining the Nexus between Riba and Gharar, and Islamic Banking Products Among Zanzibar People

This paper aims at examining the nexus between riba, gharar and income level, and Islamic Banking Products among Zanzibar people. The Islamic bank products such as Murabahah, Musharakah, Mudarabah, Ijarah, Hawalah, Takaful and Sukuk were considered as independent variables for this study. On the other hand, the dependent variables investigated were three (3) namely riba, gharar and income level. A total of 116 respondents consisting of Zanzibar people residing in different districts responded to the survey questionnaire via google form. The study used statistical techniques to analyse the collected data in terms of demographic, descriptive, reliability and validity analysis and presented by charts, tables and curves. The hypothesis test has been conducted using correlation analysis. Statistically, the finding revealed that, the people of Zanzibar were against Riba but in favour of Murabahah, Musharakah, Mudarabah, Ijarah, Hawalah, Takaful and Sukuk with p≤0.01. The result also revealed that the people of Zanzibar were against gharar with p≤0.01. On the other hand, income level showed a significant correlation against Mudarabah, Ijarah, Hawalal, Takaful and Sukuk as p≤0.01. These findings suggest that the products and services of Islamic banks have a significant relationship with Riba, Gharar and level of income for Islamic banks’ shariah priority. It is also shown that riba and gharar were significantly impacted the people of Zanzibar for the influence on the acquisition of Islamic bank facilities which are vital on direct effects that attract customers and investors in which they are customised from conventional banks products. As the awareness level from these Islamic products are high, it is recommended that Islamic banks should focus in designing Islamic banks products (Murabahah, Musharakah, Mudarabah, Ijarah, Hawalah, Takaful and Sukuk) that will comply with Shariah requirement.

Integrative review of Islamic marketing

PurposeThe purpose of this study is to integrate and synthesize the Islamic marketing literature, understand the phenomenon and related concepts and provide suggestions for future research.Design/methodology/approachThe study uses an integrative review method that emphasizes summarizing and synthesizing the previous literature related to a phenomenon.FindingsThe findings indicate the emergence of five major themes, namely, Islamic marketing and its perspectives, activities in Islamic marketing, opportunities, controversies and challenges in Islamic marketing, Islamic principles and determinants of consumers’ behavior and awareness toward Islamic products. Each of the major themes consists of sub-themes discussed in detail in the results and discussion sections.Research limitations/implicationsLike other studies, this integrative literature review has some limitations. These include the methodology undertaken, the lack of explanation of inter-relationship among themes and lack of Islamic theory-based review. These limitations lead to future research directions.Practical implicationsMarketing managers need a thorough understanding of the Islamic standards and need to develop strategies. Further, there are inter-differences among Muslims, which need to be thoroughly understood by managers. Moreover, marketers can effectively use advertising in creating awareness and increasing demand of halal products.Originality/valueThis study provides an integrative review of the literature and synthesizes the Islamic marketing literature, which has not been done before.

Concept & Application of Baiʻ al-Īnah in Islamic Banking in Indonesia and Malaysia

Baiʻ al-īnah is the process of buying and selling carried out by the seller to the buyer on a direct or credit basis, which then the goods are resold by the buyer to the original seller at a price lower than the previous purchasing price. This research is normative (doctrinal) research, with a regulative (statute approach) and conceptual approaches, emphasizing the use of secondary data in the form of primary, secondary, and tertiary legal materials. The result shows that: First, the scholars had different opinions on baiʻ al-īnah. Abu Hanifah forbade baiʻ al-īnah from the legally binding sale, and the purchase was illegal. Hence the second sale and purchase were also illegal. Besides, Imam Malik and Ahmad ibn Hanbal also prohibited baiʻ al-īnah because they both adhered to the arguments of sadd aż-żrīʻah, where baiʻ al-īnah contained elements of usury, manipulation to justify baiʻ al-īnah interest. In contrast, Imam al-Syafi'i allowed baiʻ al-īnah because buying and selling were halal (legal), and based on qiyas, the buying and selling model was in line with the law of buying and selling according to the Al-Qur'an. However, al-Syafi'i also prohibited baiʻ al-īnah if any hilah/manipulations occur. Second, Indonesia prohibits baiʻ al-īnah to be applied in Islamic Financial Institutions (LKS), except for one type of baiʻ al-īnah in an emergency case, the for transferring customer debts from Conventional Financial Institutions (LKK) to LKS. Meanwhile, in Malaysia, baiʻ al-īnah can be applied to Islamic financial institutions because Malaysia refers to the opinion of Imam al-Syafi'i. Despite that, Malaysia continuously evaluates the program and regulates baiʻ al-īnah to be applied cautiously. Baiʻ al-īnah in Malaysia is practiced in several Islamic products, including Islamic credit card financing, home financing, gold transactions,etc.

Islamic Financing Portfolio and its Comparative Growth Potential

Background – Growth has a strong association with financial sector development. As both micro and macro projects significantly count institutionalized financing contented to the access of finance and help to reduce the cost. Islamic finance development incorporates several benefits such as the transformation of the economy towards the Shari’ah compliancy, higher degree of risk-sharing, and integration of returns with the risk/performance associated with the investment venture thus ultimately leading to social prosperity.
 Objectives - This study envisages the exploration of the contribution of different type of Islamic banking financing which Islamic Banks are utilizing in their capital structure, on the economic growth. This assessment may help in empirically identifying the financing which has been fruitful to promote growth. This is because each of these Islamic financing products has their essence in the path of growth.
 Design/methodology/approach - Gross Domestic Product (GDP) is taken as the dependent variable. And the Solow model based controlling variables includes Labor Resource (L), and Physical Capital (K) while the base variable are the financing modes. The quarterly data is collected for 9 countries which are available between 2014Q1 and 2017Q4.
 Findings – The results indicate that other than Istisna financing, all other financings have a positive effect on economic growth, whereas Salam financing has highest growth potency.
 Originality/value – Previous studies lack in providing a country-level comparison of growth effect of country-level Islamic capital structure. While, considering financing as an input of economic growth within a panel data setup. This study is finding growth based weights on the popular Islamic financing options, which policymakers can use to find a particular financing which needs promoting in order to boost economic growth.

Analysis Of The Effect Of Islamic Product Attributes, Servicescape, And Interpersonal Communications On Customer Satisfaction Bank BTN Syariah KCPS Ngaliyan

Purpose - This study aims to determine the effect of Islamic product attributes, service scape, interpersonal communication on customer satisfaction at Bank BTN Syariah KCPS Ngaliyan.Method - The method used in this research is quantitative method, where this method is carried out by distributing questionnaires to BTN Syariah KCPS Ngaliyan customers. Samples were taken as many as 100 respondents with incidental sampling technique.Result - The results show that the variable attributes of Islamic products, servicescape, and interpersonal communication have a positive and significant effect on customer satisfaction of BTN Syariah KCPS Ngaliyan.Implication - This research can be used for references related to matters that affect customer satisfaction.Originality- This study analyzes the variable attributes of Islamic products, servicescape, and interpersonal communication on customer satisfaction.

ANALISIS PERBANDINGAN TINGKAT PERMINTAAN OBLIGASI KONVENSIONAL DAN SUKUK (OBLIGASI SYARIAH)

ABSTRACTSukuk is one instrument that adds to the diversity of Islamic products in the capital market. The existence of sukuk increasingly competes with the number of conventional bonds that have long been circulating in the community. Therefore, this study aims to describe the comparison of the level of demand between conventional bonds and sukuk in 2014-2018. The method used in this study is a quantitative method with a type of comparative research, where this study takes data in the form of monthly time series data in a span of 5 years starting from 2014-2018. Data collected in the form of the number of bonds and corporate sukuk in circulation. The analytical tool used in this study was the t-test which in the subsequent process used SPSS assistance. The results of this study indicate that there is a comparison that shows the difference between the level of demand for bonds and sukuk.

Investigating Determinants of Bay’ Salam Financing Product for Agricultural Sector in the Sultanate of Oman

The purpose of this study is to investigate the determinants of Bay’ Salam financing product for the agricultural sector in Oman. A survey is conducted using wellstructured questionnaires to identify the factors that determines viability of Bay Salam financing product for the agricultural sector. The statistical tools used for the analysis are factor analysis and descriptive statistics. The factor analysis results demonstrate that operational costs, profitability and risk mitigation strategies are the most important factors that banks need to take into consideration when financing the agricultural sector using Bay’ Salam. Therefore, we suggest that Islamic banks in Oman should adopt Bay’ Salam as an alternative Islamic product to finance the agricultural sector. Moreover, the Central Bank is encouraged to allow Islamic banks to adopt this product given that it will assist the government in achieving its 2040 vision.

Legal regulation of Islamic leasing in the republic of Uzbekistan

Considered the correlation between the legal regulation of conventional leasing relations in the Republic of Uzbekistan and the legal regulation of one of the most dynamically developing Islamic products in the world - Islamic leasing, Ijara.
 Evaluated the possibilities of applying the current legislation of the Republic of Uzbekistan regulating conventional leasing relations to Islamic leasing – Ijara. Considered the application of the most important provisions of the current leasing legislation of the Republic of Uzbekistan in relation to the regulation of Ijara
 Proved the possibility of implementing Islamic leasing – Ijara on the basis of the current leasing legislation of the Republic of Uzbekistan and presented proposals for a wider implementation of this type of financial services.

Legal regulation of Islamic leasing in the republic of Uzbekistan

Considered the correlation between the legal regulation of conventional leasing relations in the Republic of Uzbekistan and the legal regulation of one of the most dynamically developing Islamic products in the world - Islamic leasing, Ijara.
 Evaluated the possibilities of applying the current legislation of the Republic of Uzbekistan regulating conventional leasing relations to Islamic leasing – Ijara. Considered the application of the most important provisions of the current leasing legislation of the Republic of Uzbekistan in relation to the regulation of Ijara
 Proved the possibility of implementing Islamic leasing – Ijara on the basis of the current leasing legislation of the Republic of Uzbekistan and presented proposals for a wider implementation of this type of financial services.

Penerapan Model Almuqassah Sebagai Model Alternatif Kartu Kredit Syariah Di Indonesia

This study aims to find out whether the Islamic credit cards is shariah compliant, and to find out what if al-muqassah is applied in Indonesia as an alternative model of Islamic credit cards. This study uses qualitative research methods with descriptive analysis. The object of research in this study is the Islamic credit cards model that already exists in Indonesia and the al-muqassah model. The sample in this study uses purposive sampling, namely officials from the Islamic credit card division at BNI Syariah Jakarta and DSN MUI Officials. Data Obtained from this study through interviews with relevant institutions and documentation. The results obtained from the study indicate that based on that the current Islamic Credit cards products are shariah compliant. Where the benefits provided by Islamic credit cards are in line with shariah objectives, namely maqasid dharuriyyah and maqasid hajjiyyah. However, based on the issue of shariah in the application of existing Islamic credit cards, development is still needed to improve the quality of products, especially from shariah aspects. As for the application of the al–muqassah model in Indonesia, it is very possible as long as it is supported by all parties.