Qard Al-hasan Research Articles

Millennials’ acceptance towards Qard al-hasan: extending Islamic theory of consumer behaviour

Purpose The purpose of this paper is to look into millennials’ acceptance of Qard al-hasan using the Islamic theory of consumer behaviour (iTCB) in Malaysia. Design/methodology/approach For this study, convenience sampling was used and 203 usable questionnaires were received from the respondents who are millennials and university students. The questionnaire link was distributed via social media platforms to the millennials. Findings The findings of this study reveal that there exists a strong and positive relationship between the role of iman and Maqasid consumer index in determining the millennial acceptance of Qard al-hasan. On the contrary, Islamic altruism does not turn out to be the factor of Qard al-hasan acceptance. Resultantly, these results suggest that millennials in Malaysia accept Qard al-hasan and based on those educational institutions may consider offering zero-interest benevolent loans to alleviate the financial burden of unprivileged students. Research limitations/implications Although this study provides positive results, a minimum of two research constraints may direct future efforts in this area. This study initially focuses on a specific ecosystem of Islamic financial products in Malaysia, with a particular emphasis on Qard al-hasan. As a result, subsequent research ought to strive to encompass a larger perspective on Qard al-hasan. Secondly, this research uses a theory that is still in the applicability phase, which has led to some productive discussions for further improvements. Originality/value To the best of the authors’ knowledge, this work is one of the few studies conducted on an empirical basis using the iTCB in the milieu of Qard al-hasan in Malaysia.

Countering Moneylender Exploitation through Islamic Nanofinance: A Literature Review

The prevalence of predatory lending practices poses a significant threat to marginalized communities, perpetuating cycles of debt and financial exclusion. This study aims to explore the potential of Islamic nanofinance as a viable solution to counter moneylender exploitation, focusing on its principles and practices in Southeast and South Asia. A comprehensive literature review was conducted, highlighting the distinctions between nanofinance and microfinance, the ethical frameworks underpinning Islamic finance, and the detrimental impacts of exploitative lending on vulnerable populations. Key findings reveal that Islamic nanofinance, grounded in principles like Qard al-Hasan (interest-free loans) and waqf (charitable endowments), offers sustainable financial alternatives that promote social justice and economic empowerment. Furthermore, successful case studies from countries such as Malaysia, Indonesia, Thailand, and India illustrate the effective implementation of Islamic nanofinance initiatives in alleviating financial burdens and addressing systemic inequities. However, challenges such as limited awareness, regulatory hurdles, and resource constraints hinder broader adoption. The implications of this study underscore the need for greater policy support and community engagement to enhance the reach of Islamic nanofinance programs. By fostering collaboration among financial institutions, governments, and civil society, this research advocates for a paradigm shift towards more inclusive financial systems that can effectively mitigate the adverse effects of predatory lending and empower marginalized communities through ethical financing solutions.

Qard Al Hasan: Instrumen Moneter Syariah Dalam Peningkatan Kesejahteraan Masyarakat Indonesia

Conventional interest-based monetary policy has yet to be effective in overcoming monetary problems. So, this article is to discuss how to apply qard al hasan as one of the sharia monetary instruments in Indonesia. The method used is literature study. The results of the analysis and discussion show that Qard al Hasan's Monetary Policy can be implemented in Indonesia. This is because Qard al Hasan is very in accordance with the Qur'an and Hadith and the implementation of Qard al Hasan-based monetary policy can not only stabilize prices and inflation, but also can increase national production or GDP and reduce the number of poor people. Bank Indonesia as the executor of Monetary Policy can apply the Qard al Hasan system, because Bank Indonesia has started to create a database of community groups that have Micro, Small and Medium Enterprises, so that the implementation of Qard al Hasan in Indonesia can be implemented.

Qard Al-Hasan Revitalization as a Financing Alternative for Micro, Small, and Medium Enterprises: An Analytic Network Process Approach

Purpose: The purpose of this research is to explore aspects of the application of qard al hasan that support the successful implementation of qard al hasan as an Islamic crowdfunding instrument to finance Micro, Small, and Medium Enterprises (MSMEs). Theoretical framework: The proper financing model is required to minimize the risk of Non Performing Loan of qard alhasan financing, so it can serve as an alternative access to financing for MSMEs that are classified as feasible but unbankable businesses. Design/Methodology/Approach: This research utilized the Analytic Network Process (ANP) which is the result of a literature study, and the opinions of practitioners and experts. Findings: To successfully implement qard al hasan as a financing instrument, it must be supported by internal and external aspects of the institution providing qard al hasan financing. Internal aspects consist of system and institutional management sub-aspects. The system sub-aspect consists of the qard al hasan distribution system, fund collection system, revenue system, and internal control system. Institutional management sub-aspect consists of human resources, organizational structure, governance, and business segment of the institution. External aspects consist of customer and authority sub-aspects. The customer sub-aspect consists of customer business management, customer segments, and collateral provision. While the authority sub-aspect includes regulations imposed by the authority to regulate the implementation of qard al-hasan. Research, practical & social implications: The results will provide input to all qard alhasan stakeholders, so the quality of financing is sound and sustainable. As a result, there will be more MSMEs that can be financed. Originality/Values: The originality of the research is in the scope of the discussion of qard al-hasan which is focused on revitalizing the financing aspects of qard alhasan by using the principles of sound financing practices produced by the ANP method as an analytical tool with the aim of producing sound and sustainable financing quality. The results of this research are expected to contribute to the concept of a qard alhasan implementation model that can be used by all stake holders to improve qard al-hasan performance.

STRATEGI PERBANKAN SYARIAH DALAM MENINGKATKAN INKLUSI KEUANGAN DI INDONESIA

This study aims to analyze the strategy of Islamic banking in increasing inklusi keuangan in Indonesia. This research is a field research with a qualitative approach. Collecting data using interviews, documentation, and observation. The data analysis technique used descriptive qualitative analysis. The result of the study found that the strategies used by Islamic banking in increasing inklusi keuangan were by channeling financing to the real sector, strengthening microfinance, developing partnership programs through zakat, infaq, sodaqoh, qard al-hasan, and other social funds, as well as developing linkage programs with Small and Medium Enterprises (SMEs).

FAIR WEALTH DISTRIBUTION THROUGH INSTRUMENTS IN ISLAMIC ECONOMICS

Distribution plays a crucial role in ensuring fair allocation of resources and commodities to individuals in a community, with the objective of achieving maslahat (benefit). In Islamic economics, distribution has a broader significance compared to other economic systems, encompassing the fair distribution of resources, goods, and services through market mechanisms, enabling individuals to experience the benefits of produced commodities. This research aims to examine the importance of fair wealth distribution in Islam using principles such as waqaf, qard al-Hasan, musharakah, mudharabah, zakat, and infaq. Employing a qualitative methodology, data was collected from papers, research journals, books, and written sources, which were reviewed, interpreted, and analyzed through content analysis. The findings indicate that distribution instruments in Islamic economics serve as effective means to achieve fair and equitable distribution within society. By implementing waqaf, qard al-Hasan, musharakah, mudharabah, zakat, and infaq, communities can attain social justice and reduce economic disparities. However, public awareness, adequate infrastructure, and a supportive regulatory framework are crucial factors for the successful implementation of these distribution instruments. Through appropriate efforts, these instruments can become powerful tools in fostering a more inclusive, sustainable, and just economy.

COMPARATIVE STUDY OF ISLAMIC CREDIT CARDS TO BE ACCEPTED: MUSLIM CONSUMERS’ PERCEPTIONS

The use of standard credit cards, which incorporate the practice of riba in the case that a late payment is made, has resulted in a conflict with the perspectives of Muslim clients, which is to be addressed in choosing the best alternative available cards. The primary purpose of this research is to analyze the many existing models of Islamic credit cards to determine which one is most in line with Sharia law. The kind of study that has been done is descriptive, which employed rigorous literature studies and investigated the existing theories. The holy Quran is the source of the fundamental laws that govern what is and is not allowed in terms of credit and debt. After then, the attributes of the cards that are being presented are analyzed in light of those principles to ensure that they adhere to Sharia, which is a religious law. The Muslim community has access to a wide range of credit card options to pick from. Charge cards, Qard Al-Hasan cards, Bai Al-Inah cards, Mushraka Mutanqisa cards, Tawarruq cards, and Murabahah cards are all included in the bundles. Also had are Tawarruq cards and Murabahah cards. Critiques raised voices against Islamic credit cards. Consequently, there is a need for a payment method that may function like a credit card. However, they are still obligated to maintain complete conformity with Islamic principles. This article takes a closer look at the packages mentioned above to understand better the degree to which the various options are accepted. The study explored the crucial features of the existing Islamic credit cards and evaluated the shariah compliance of those concepts. According to the findings and conclusions of the study, the authors concluded that the 'Mushraka Mutanqisa' is the most Shara-compliant and hence most likely to be approved by Muslim customers.

Sürdürülebilir Kalkınma Hedefleri ve İslami Finans Perspektifi

Sustainable development, as a common task of humanity, represents the will to meet the needs of today's humanity and transfer it to future generations by wisely managing the resources necessary for the survival of generations without wasting them. In this study, the contribution of Islamic economics and finance to sustainability efforts and the opportunities it can offer are investigated by emphasizing this understanding that is compatible with the Islamic finance perspective. As a result of the research, it has been understood that Islamic economics can make great contributions to sustainable development through Islamic banks, social finance tools such as zakat, waqf, sadaqah, qard-al hasan, Islamic microfinance, Islamic crowdfunding, and the human model that will be revealed by Islamic finance education. In addition, it is claimed that sustainable development efforts are unsuccessful due to financial crises and environmental problems caused by capitalist understanding.

Role of Islamic Finance in Supporting Economic Recovery in Nigeria Post-Covid-19 Pandemic

Since the deadly infection pandemic episode toward the end of 2019, more than 200 countries have been impacted. One of the most significant impacts of the pandemic that is undeniable is the increase in the intensity of poverty around the world. It is a health sector crisis, and the virus is also causing an economic meltdown. Various nations fall into recession, and more people live beneath the poverty level. The pandemic is causing both health and economic crises. This study examines the potential of Islamic finance in supporting economic recovery in the post-Covid-19 pandemic. The method reviews previous studies, including journal articles, research papers, policy documents, and reports in related fields to support this study. Based on past studies, the study document that Islamic finance via Mudarabah, Sukuk, Musharakah, Qard al-Hasan, Sadaqat, waqf, and Islamic Microfinance has essential to support economic recovery in a post-Covid-19 pandemic in society. In particular, the study found that Islamic finance is positively associated with a reduction in the impact of the pandemic on the people and the whole world economy. The study has added to the body of knowledge by looking at the role of Islamic finance in terms of the effect of the Covid-19 pandemic on the economy and society. The study has implications for the financial institutions, policymakers, and government in terms of adopting Islamic finance products and principles to address the effect of the Covid-19 pandemic crisis on the economy, thereby improving the social well-being of the people and improving the global economy.

Do Islamic microfinance institutions affect the socio-economic development of the beneficiaries? The evidence from Turkey

PurposeThis paper aims to investigate the effect of Islamic microfinance on poor households through the case of the IKSAR Qard al-Hasan Program in Turkey. To achieve this aim, it examined the changes in the socio-economic status of beneficiaries before and after the program.Design/methodology/approachThis paper adopts the convergent parallel mixed method design. It conducted two surveys to micro-entrepreneurs: the first is when they received the loan and the second is when they finished their installments. In addition to the longitudinal data obtained from these two surveys, qualitative data were collected by participant observation and interview technique with visiting these people periodically throughout the interest-free loan (qard al-hasan).FindingsAccording to the results obtained from the analysis of the pre- and post-surveys, a statistically significant increase of 35% was experienced in the monthly household income after receiving the qard al-hasan loan compared to before. Similarly, a statistically significant increase was found in the monthly expenditures of 23 out of 30 households after receiving the qard al-hasan.Originality/valueThere are two originalities of this study. To the best of the authors’ knowledge, it is the first research that examines the only Islamic microfinance program in Turkey. Second, it uses longitudinal data while examining the impact of Islamic microfinance on the welfare of the poor. In the relevant literature, no study has been identified that uses longitudinal data in Islamic microfinance. Similarly, a limited number of longitudinal studies examine the impact of conventional microfinance institutions on the poor.

Impact of Qard-al-Hasan (interest-free loan) program in reducing multidimensional poverty: an evidence from the southwest Bangladesh

Purpose This paper aims to investigate the effectiveness of Qard-al-Hasan (QH) or interest-free loan in reducing multidimensional poverty through examining Fael Khair Waqf (FKW) program as a case. Design/methodology/approach A Multidimensional Poverty Index (MPI) approach has been used in this study, which was conducted over 1,600 households including 1,200 program households in 40 villages and 400 control households in 20 villages of 8 districts in the south-western region of Bangladesh. Findings It is found that 38.5% of sample population was multidimensional poor with deprivation of above the cutoff score. However, FKW participants were relatively less multidimensional poor. It was 35.3%. Hence, it is argued that the FKW is an effective program in terms of poverty reduction as it has contributed to higher economic outcomes for their participating households. The econometric result also suggests that the likelihood of the participants of FKW to be MPI poor is around 1.5 times lower than the nonparticipants, and the result is significant at 1% level. This indicates that program has a positive impact in reducing multidimensional poverty. Practical implications The analysis in this paper would fill the literature gap by investigating the link between application of QH and poverty alleviation. It will also guide academicians, researchers and decision-makers to design evidence-based policy to alleviate poverty. Originality/value To the best of the authors’ knowledge, there has been no empirical work in Bangladesh on the effectiveness of QH in poverty reduction considering an MPI approach. Hence, this study is a unique contribution to the literature of Islamic social finance.

Simulation of the effect of COVID-19 outbreak on the development of branchless banking in Iran: case study of Resalat Qard–al-Hasan Bank

PurposeCOVID-19 has become a global challenge with a significant rate of prevalence, and it has exerted devastating consequences in epidemic, economic and social terms. Therefore, a number of studies have already been, or are now being, conducted on the detrimental effects of the virus. In this respect, a question may arise: Is there any possibility to turn the threat of the virus outbreak into an opportunity in some sectors such as the banking industry? In this research, the effects of COVID-19 outbreak as an intervening element on the acceptance of branchless banking were studied.Design/methodology/approachIn this research, the factors affecting the acceptance and development of branchless banking in Iran at the time of COVID-19 outbreak were identified by systematically studying the theoretical framework, conducting further research and interviewing the experts; then, a causal loop diagram of the problem in the proposed case study and the flow rate model were presented.FindingsThe simulation results showed that banking transactions and a bank's financial resources would increase by implementing the package policy of reducing the number of branches, promoting incentive policies and increasing the budget rate of the bank in Information Technology (IT). Further, by promoting customers' acceptance of new technologies, the spread of COVID-19 can be viewed as a positive factor, or even a catalyst, in the acceptance and development of branchless banking in Iran.Originality/valueBased on the proposed model, the difficulties faced by individuals during the spread of COVID-19 could act as justifiable incentives to boost appropriate organizational preparations for making changes to the classic working processes. Processes such as telecommuting, job rotation and so on are among these changes.

Qard-al-Hasan-based monetary policy and the role of the central bank as the lender of last resort

PurposeThis paper aims to examine how a central bank (CB) can act as a lender of last resort (LOLR) for both Islamic and conventional interest-based banks by pursuing a Qard-al-Hasan (QH)-based monetary policy (MP).Design/methodology/approachThe role of the CB as LOLR under QH-based MP and its effects on major macroeconomic variables, including deposits, loan creation and aggregate expenditures, are examined on theoretical grounds by using the aggregate output and aggregate expenditure model under the framework of Islamic MP.FindingsWhen the CB acts as LOLR by pursuing QH-based MP, it automatically empowers Islamic banks (IBs) by providing access to borrowing funds from the CB on a QH basis. As a result, IBs will not be required to hold billions of dollars as liquid assets against liquidity risks. Thus, the lending capacity of IBs will increase and deposit expansion, loan creation and aggregate expenditures in the economy will all expand. This will in turn increase real GDP and employment while reducing the unemployment rate.Originality/valueThis is the first paper to analyze CBs acting as LOLR for both IBs and conventional interest-based banks by pursuing a QH-based MP, thus providing equal opportunities and equal access to borrowing facilities from the CB, along with equal partnership and fair competition for all and absolutely no discrimination to anyone. The LOLR service to all banks under QH-based MP will unveil a new horizon of opportunities where all financial institutions are expected to thrive. IBs will escape the constraints of the constant fear of liquidity risks and find a level-playing field.

The effectiveness of Qard-al-Hasan (interest free loan) as a tool of monetary policy

PurposeThis paper aims to investigate the macroeconomic effects of Qard-al-Hasan (QH) as a tool of monetary policy (MP) and its effectiveness in achieving full employment and price stability in the economy.Design/methodology/approachQH-based MP and its effects on major macroeconomic variables are examined on theoretical ground by using the standard aggregate output and aggregate expenditure model within the framework of Islamic economic principles.FindingsQH-based MP positively influences real sectors of the economy and increases output, and the economy returns to full employment. QH provides the lowest possible borrowing costs across the economy and thus triggers rightward shift in aggregate supply curve and thus increases output and lowers price level. In addition, increase in output eliminates excess demand or shortages and thus maintains price stability. Furthermore, QH-based MP also increases exportable surplus and exports, decreases imports as well as increases inflow of funds and foreign currency reserves with the Central Bank and thus makes MP more effective.Research limitations/implicationsQH-based MP is usually expansionary MP, and as such, it can be argued that there is a probability that QH-based MP may lead to higher inflation rate. However, in this study, it has been shown with real world data in Table II, that 23 countries in Group 1 have pursued zero or negative interest rate policy and their experiences mitigate such probability.Originality/valueThis is, perhaps, the first paper that presents a complete model of QH as a tool of MP with fully explained transmission mechanism. This is new contribution in the literature of Islamic finance where theoretical model on QH is systematically developed and applied as an effective tool of MP in attaining full employment and price stability. This model of QH-based MP can unfold a new horizon of uninterrupted economic growth, full employment and price stability by increasing output and employment, as well as by eliminating excess demand or shortages.

Kontekstulisasi Dan Reposisi Fungsi Wakaf Dalam Upaya Meningkatkan Kesejahteraan Umat

The discourse on waqf recently appears the back to the surface. It not only discusses about the opinion of the fiqh scholars who have no uniform about understanding and nature waqf itself, but also to reform and optimize waqf in order to do more, namely to superintend the social problems of society, related to the prosperity of the economy of the people. Therefore, contextualization and repositioning of waqf institutions becomes a necessiry for immediate implementation. The function and role of waqf is very large in supporting the development and progress of the muslims. Therefore the management of waqf must be able to be optimized. Tragically the management of waqf in Indonesia is still not maximized, so there are some waqf property abandoned in its management, some even missing. This is due to the waqf management still uses traditional-consumptive management pattern. Efforts to develop waqf to be productive and productive, there are four things to note; Institutional aspect, accounting aspect, auditing aspect and aspect of nadhir. If these four aspects can be met, then the utilization of waqf will be more efficient. There are several forms of models that can be run by the manager of waqf, such as by holding Sharia banks as a partner with schema of murabahah, istisna’, ijarah muntahiyah bi al-tamlik (financial leasing with purchase option), muzara’ah, qard al-hasan, musharakah (partnership) and mudarabah muqayyadah. Keywords: Contextualization, Repositioning of Waqf, Prosperity of the People

Islamic human resource management (iHRM) enhancing organizational justice and employees’ commitment

PurposeThis paper aims to introduce and promote the novel concept of Islamic human resource management (iHRM) and assess its effects upon two organizational attitudes, namely, perceived justice and employees’ commitment.Design/methodology/approachThe present study is an applicable and empirical research that has used the descriptive–correlative method. The target population consists of 192 employees from Resalat Qard al-Hasan Bank in the city of Tehran. Calculated based on Cochran’s formula, 128 people are selected by means of a simple random sampling technique. To collect primary filed data, questionnaires are distributed. The gathered responses are analyzed with the structural equation modeling approach using SmartPLS software package.FindingsFour dimensions of iHRM, i.e. recruitment and selection, training and development, remuneration and compensation and performance appraisal, are positively associated with organizational justice. Also the first three dimensions have a positive impact on employees’ commitment, but the link between performance appraisal and employees’ commitment is not statistically significant because of the slightly negative attitude of the employees toward a possible perfunctory routine.Originality/valueiHRM is one of the emerging trends in Islamic management literature, with limited studies conducted in this specific field. The current effort is one of the first attempts to empirically investigate this relatively new construct in the context of Iran.

AL-ARIYAH, AL-QARDH DAN AL-HIBAH

<p>Sometimes, social contract is overlooked in society which in turn can cause problems. 'ariyah is seldom to be discussed in relation to the law, it is showed by the absence of DSN-MUI fatwa, about <em>ariyah</em> and specific discussion in KHES. Qardh that is applied in the banking and other LKS (<em>qard al hasan</em>) can be found in the DSN-MUI Fatwa and KHES, as well as Grant. <em>Ariyah</em>, <em>qardh</em> and grants are <em>Sunnah</em> for the giver and the permission for the recipient. The social contract, the contract, <em>tabarru’</em> contract is used all these social contract are allocated properly, the contribution for infrastructure development will be better.</p>

REGULASI ZAKAT DAN PENERAPAN ZAKAT PRODUKTIF SEBAGAI PENUNJANG PEMBERDAYAAN MASYARAKAT (Studi Kasus pada Baitul Mal Kabupaten Aceh Utara)

Regulation and application of productive zakat on Baitul Mal North Aceh have a significant role to improve the welfare of society, in education, religion, economics and so on. The purpose of this research is to explain the regulation of zakat and charity productive application as supporting the prosperity of society. This research is a field research, conducted in North Aceh Regency Baitul Mal with qualitative form. Data obtained from interviews and documentation, then analyzed with descriptive. The results showed that the presence of Baitul Mal North Aceh Regency bound by a number of regulations (Qanun). Application of productive zakat is to provide working capital loans based on qard al-Hasan to motivate well and maximum effort. This program gives significant impact to support the prosperity of the community.

Local agricultural financing and Islamic banks: is Qard-al-Hassan a possible solution?

Purpose – This paper aims to study Qard-al-Hasan (QH) (good loan) from the stand point of its possible application to agricultural farming with a view to augmenting the sources of Riba (interest)-free agricultural financing for Muslim farmers of Islamic countries like Pakistan. Design/methodology/approach – This paper is a study of QH (good loan) from the stand point of its possible application to agricultural farming with a view to augmenting the sources of Riba (interest)-free agricultural financing for Muslim farmers of Islamic countries like Pakistan. Findings – The study reports that Riba-free financing is essentially needed by poor Muslim farmers who, owing to prohibition of Riba, do not rely on interest (Riba)-based financing. The study also shows that QH is a viable option for fulfilling this need and is beneficial for the farmers as well as for the Islamic banks or financial institutions. Research limitations/implications – The case of QH as a potential mode of agricultural financing, as presented in this paper, is based on a theoretical or conceptual framework. The findings need to be further substantiated with empirical evidence. A future study, based on reliable empirical data would certainly add value to the subject. Originality/value – Islamic banks and financial institutions typically rely on Musharakah (partnership), Murabaha (sale with profit), Ijarah (leasing), Salam (advance payment sale), Istisna’ (manufacturing contract), etc., and they rarely use QH as a mode of financing. Despite its huge utility, QH is practically non-existent in its application as an agricultural financing instrument. This paper presents a case for QH that can be adopted by Islamic banks or financial institutions for provision of the much needed financing for the small farmers of Islamic countries, as well as those living in non-Islamic countries.

A Shariah Perspective Review on Islamic Microfinance

Islamic micro finance is a growing industry in several Muslim countries such as Bangladesh, Nigeria, andMalaysia. Islamic microfinance is at the heart of Islamic finance as it addresses one of the fundamental roles offinancial intermediaries demanded by Shariah. Over the past few decades, many initiatives have taken place toalleviate poverty in Muslim countries. This paper provides the Islamic thoughts and motives behind theseinitiatives and then, it discusses the mechanisms proposed by Islam to improve the life of poor, prevent them tobecome poor, and also to improve the general economic relations among members of society. Later on,mudarabah, Musharakah, murabahah, Ijarah, and qard al-hasan are discussed as different types of Shariahcompliant contracts that can be used as the base of micro financing business model.