International Journal of Islamic Economics and Governance

The impact of Islamic Finance towards Socio-Economic Development of Sokoto State - Nigeria: Problems and Prospects

Aminu Alhaji Bala — Sat, 30 Dec 2023 00:00:00 +0000

This research is on the impact of Islamic Finance towards the Socio-Economic Development of the Muslim Community in Sokoto State of Nigeria. The purpose of this research is to highlight the role played and contributions gained from the practice of Islamic Finance and also to explore possible challenges experienced so far with the hope that such challenges will be overcome in the near future. The research results revealed that although Islamic finance was practiced in Sokoto for over two hundred years, a lot still needs to be explored from the contemporary practice of Islamic Finance being experienced globally to achieve the desired socio-economic development. The research finally concluded by drawing the attention of the government and people of Sokoto State to explore more avenues in utilizing Islamic Finance window so that there will be paradigm shift from the shackles of conventional finance experienced over the years.

Islamic Fintech in Nigeria: Advancements, Compliance, and Future Prospects

Muhammad Auwal Sulaiman — Sat, 30 Dec 2023 00:00:00 +0000

This paper examines African fintech as one of the first fronts at which Islamic principles have intruded into Western finance, representing a significant step forward from an interactive financial paradigm. Islamic fintech is in accordance with Muslim teachings and has great potential for developing Nigeria's economic future. In fact, with such a large number of Muslims in this country it is not long before they get used to something like openness and transparency brought into Islamic Sharia on matters having concern with ethics. In the past five years, Islamic fintech grew even more rapidly than overall fintech. Its capability to make room for Muslim and non-Muslim victims of the pandemic reflects its spirit, vitality. Islamic fintech uses standards such as profit and loss sharing, asset-backed financing or banning interest (riba). These may be a new solution to the existing issues with transforming finance. The conclusion of the paper: There is a bright future for Islamic fintech. Not only does it benefit consumers, but its role as an exceptionally effective financial inclusion tool may even be greater than that of the profit-driven banking entities worked in before.

A Proposed Model of Halal Insurance Policy Scheme

Fawzi Gherfal — Sat, 30 Dec 2023 00:00:00 +0000

It is a well-known fact that Muslim scholars have declared commercial insurance in modern times religiously prohibited (Harm), mainly for the reason that it contains riba (insurance), gharar (misleading), and maysir (gambling or speculation). The Islamic Figh Academy declared the same because it causes a major element of risk, which voids the insurance contract; therefore, it is prohibited. Takaful insurance, a Shariah-compliant insurance, was introduced to replace commercial insurance by eliminating the prohibited elements in commercial insurance. While successfully introduced, Takaful still did not fulfill Shariah's purpose in preventing the injustice practiced, including profiting out of the agony of others. The author introduces a new Islamic insurance (FAWZ) to eliminate the elements of prohibiting commercial insurance while still fulfilling the purpose of Shariah (Maqasid al-Shariah). FAWZ-Insurance is based on a partnership model between the two parties, the insured and the insurer, a model or a transaction called for by Shariah as manifested in Surat Anissa, Verse 29, declaring that Tijara (commerce) is the only permissible transaction amongst believers, whereas Musharakha (partnership) is a form of commerce that is used.

Impact of Islamic Financial Inclusion on Economic Growth in Nigeria

Abubakar Ibrahim Mairiga — Sat, 30 Dec 2023 00:00:00 +0000

Although the connection between finance and growth is well deliberated in literature, attentions are now geared to non interest inclusive finance with understanding the deficiency of traditional inclusive finance. However, the impact of interest free inclusive finance on growth still is partly examined. This research work dealt with Islamic inclusive finance - growth nexus. The research employed quarterly data spanning from (2010-2020). In this work, a novel index of Islamic financial inclusivity was constructed using the (PCA) and a recently developed Bootstrap ARDL (BARDL) Cointegration technique was used in analyzing the data. The finding indicates a number of results. First, the results of BARDL demonstrates a robust association among Islamic Inclusive finance and Growth. As such, it demonstrates the presence of positive and statistically significant nexus between Islamic inclusivity finance and growth. Moreover, findings also reveal presence of cointegration among Islamic inclusivity finance and growth. As such, interest free finance can be used as a tool to help nations to exit from economic recession and other macroeconomic challenges.

Implementation of Syirkah Principles (Partnership) in the Establishment of a Waqf Asset Management Company

Helza Nova Lita, Siti Mashitoh Binti Mahamood, Aam Suryamah, Rafan Darodjat — Sat, 30 Dec 2023 00:00:00 +0000

The waqf institution is one of the economic potentials in Islam which in its history has made a major contribution to the progress of human civilization, including improving economic welfare in society. Managing waqf in a trustworthy and professional manner is important to increase waqf assets and benefits. In this case, the nazhir plays an important role in managing waqf both independently and in collaboration with business entities. Partnerships can be entered into by nazhir with various parties including the Company. In Islamic Law, we recognize the concept of Syirkah (partnership) for business collaboration, including in the formation of companies. This research examines how syirkah as a concept of economic cooperation originates from Islamic law in nazhir partnerships managing waqf assets including the potential for forming waqf-based companies. The analysis method is a normative juridical, namely through a legal approach, both national law and Islamic law, which is supported by empirical data in the field related to companies that manage waqf. Through this article, it is hoped that we can provide an appropriate model for implementing the syirkah/partnership concept in waqf management, including the concept of forming a waqf-based company that can be offered to increase the professionalism of waqf management. Syirkah as the basic concept of company formation in Islam, can be integrated into the formation of a company to manage waqf assets. syirkah amlaak which comes from joint ownership assets that are donated and managed productively, then the results are distributed according to the purpose of the waqf pledge. Besides that, the principles of syirkah inan and syirkah mudharabah can also be applied, which are components of cash waqf that are used as business capital and the profits for the purpose of waqf. An interesting new paradigm for collaboration between waqf and companies includes the Corporate Social Responsibility (CSR) Program. Through the CSR Program, Waqf Management will synergize with company activities in a professional and sustainable manner.