Search Results (9)

Globally, financial inclusion is regarded as being crucial for balancing an economy’s financial system. However, despite the significance of financial inclusion, it still needs to be clarified to identify what factors are responsible for the diverse trend of financial inclusion in the forty-five Sub-Saharan Africa (SSA) countries from 1999 to 2024. The main rationale of the study empirically investigated these determinants of financial inclusion in forty-five Sub-Saharan Africa (SSA) countries from 1999 to 2024, which covers three distinct periods: which is the pre-COVID, 2020–2022 is the COVID period, and the post-COVID period from 2023 onward, but examined as a whole from 1999 to 2024 for easy policy formulation for SSA countries. The study was anchored on two main research objectives: firstly, to examine the factors influencing financial inclusion in Sub-Saharan Africa (SSA) in these three distinct periods, and lastly, to present the policy implications of the result of these factors in enhancing financial inclusion in the post-COVID era in SSA. The study used the Panel Least Squares (PLS) technique in the data analysis. The result revealed that economic growth (GRO), Islamic banking (ISMAIC), money supply (MSS), internet users (USERS), and credit availability (CREDIT) positively and significantly enhance financial inclusion with coefficients of 0.001298, 4.926809, 1.08 × 10⁻⁶, 0.459388, and 0.657431, respectively, with significant p-values of 0.0008, 0.0023, 0.0000, 0.0000, and 0.000, respectively. On the flip side, internet servers (SERVER) have a negative coefficient value of 4.63 × 10⁻⁶ with a p-value of 0.000. Though inflation (INFL) and interest rate (INT.) have negative coefficient values of −0.02853 and −0.08317, they have insignificant p-value impacts of 0.2841 and 0.2501, respectively. The result indicates that many of the variables have a significant impact on financial inclusion. This is shown from the probabilities of the t statistics of each of the independent variables in the estimated model, which are significant at the 5% level. The policy implications of these results include the following: firstly, SSA governments should promote economic growth through investment in productive sectors, infrastructure development, and job creation programs to indirectly improve financial inclusion. Secondly, SSA countries’ policymakers should maintain price stability through sound monetary and fiscal policies to ensure inflation does not hinder access to financial services. Thirdly, SSA countries’ governments and central banks should promote lower interest rates and enhance credit accessibility, especially for marginalized groups, through subsidized loans and targeted credit schemes. Fourthly, policymakers should support the expansion of Islamic finance by improving regulatory frameworks and increasing awareness about Sharia-compliant financial products. Full article

The study documents the achievements of the Islamic Banking Services Industry (IBSI) in light of Islamic finance objectives (including commercial performance, financial stability, and wealth distribution). A balance sheet analysis of IBSI in the United Arab Emirates (UAE) for 33 quarters (2013 Q4–2021 Q3) is conducted, focusing on sources and uses of funds, as well as documentation of commercial performance. The findings suggest that the UAE IBSI has remained successful in achieving its micro/primary objectives (commercial performance) and made progress towards partial achievement of its macro/intermediate objectives (financial stability and equitable wealth distribution). While evidence suggests achievements in the area of financial stability, the aspect of equity in wealth distribution requires more focus. The study recommends that regulators develop a legal framework focusing on the business models for IBSI, aimed at achieving broader economic objectives. It is also recommended that managers of UAE IBSI include profit and loss-sharing contracts in deposit collection, financing and investment portfolios. The contribution to the literature includes the documentation of findings on the achievements of UAE IBSI in financial performance, as well as its broader economic objectives within the Islamic financial system. Full article

The purpose of this study is to investigate the influence of environmental disclosure and corporate governance on the financial performance of Islamic banks in Saudi Arabia. This study highlights that sustainable practices are transparent with financial objectives using the religious framework of Islamic finance. This research is based on Worldwide Vision 2030, which covers sustainable development and promotes environmental, social, and governance (ESG) principles, as well as corporate governance factors, such as board composition and Shariah Supervisory Boards (SSBs). We use a hybrid approach for our findings, with a dataset spanning 2011–2023 for the quantitative analysis and 20 semi-structured analyses conducted for a qualitative approach that aligns with objectives. We found that environmental disclosure boosts profits and stakeholder trust. Corporate governance structures, such as environmental boards and sustainability committees, improve the environmental disclosure of financial performance in Islamic banks. In this positive interaction, specialized governance drives Sharia-compliant sustainability initiatives. SSBs help Islamic banks integrate sustainability and meet religious and ESG environmental standards. Board diversity and dedication in the sustainability committee both play important roles in enhancing environmental disclosure practices; in return, these improved financial performances. The interaction of environmental disclosure and board environmental expertise has a positive impact on the overall performance, which indicates that governance structure supports sustainability-related decision-making, aligning with transparency. This study suggests that Islamic banks standardize ESG frameworks, improve board environmental expertise, and invest in real-time sustainability reporting digital solutions. Saudi Islamic banks can lead regional and global sustainable banking by adopting these strategies to align with global sustainability trends, improve financial performance, and meet ethical finance expectations. Full article

This study delves into the complexities surrounding the determination, interpretation, and application of maqāsid al-sharī‘a within modern Islamic economics and finance. By conducting an extensive review of classical and contemporary literature, this research explores the diverse methods and criteria employed for ascertaining maqāsid. It critically examines the inherent subjectivity involved in categorizing maqāsid, shedding light on the ambiguity in delineating their boundaries. Additionally, the study scrutinizes the unintended consequences of broader utilization of maqāsid, particularly in transactions such as bay‘ al-‘īnah, and evaluates the risks associated with prioritizing maslaha (utility) over textual evidence. The findings underscore the challenges posed by the subjective nature of maqāsid interpretation, illustrating how diverse perspectives can lead to differing conclusions. They emphasize the potential misuse of maqāsid for legitimizing practices contrary to the core principles of sharia. This research underscores the preservation of legislative intent and advocates a cautious approach to integrating maqāsid al-sharī‘a into Islamic economics and finance. The objective is to strike a balance that upholds Islamic principles. It highlights the essential need for collectively establishing standards for both macro and micro maqāsid and their usage in ijtihād, promoting responsible applications within contemporary Islamic finance for informed and ethical solutions. Full article

With the rapid increase of waste throughout the country, the government of Indonesia has enacted regulations targeting waste reduction using religious sentiment. This is employed in Malang City’s “Waste Bank of Malang” (WBM). This study aims to analyze the impact of waste banks on socio-economic progress, and to assess their efficacy in accomplishing this objective from the Maqasid al-Shariʻah perspective. The research employs a descriptive qualitative approach and uses both primary and secondary data sources. This study found that the operation of WBM contributes considerably to the community’s economic and social well-being. Likewise, the WBM has successfully managed waste by reducing, reusing, and recycling it as it is collected from customers. The customers receive financial incentives from the waste bank in return for providing recycled waste to a specialized firm under a profit-sharing (PLS) contract. As per the findings of the study, the rationale of the waste bank aligns with the Maqasid al-Shariʻah and the Islamic finance contract of PLS arrangements. Full article

The objective of this paper is to empirically examine the moderating effect of ownership structure on the relationship between systemic risk and corporate governance. It complements prior research by studying the relationship between the proportion of capital held by state institutions and systemic risk. It also examines the internal governance mechanisms that mitigate systemic risk. For this purpose, this research used a dataset consisting of 22 banks from Gulf Cooperation Council (GCC) countries (10 Islamic banks and 12 conventional banks) over the period 2004–2018. We used a three-stage least squares (3SLS) regression to test our research hypotheses. The findings revealed that the structure of the board of directors (BOD) reduced systemic risk in the banking sector. In particular, we provide evidence that board composition and board meetings negatively affect systematic risk. In addition, we provide empirical evidence that the state plays a key role in moderating the relationship between governance mechanisms and systemic risk. As such, our paper provides significant contributions to the governance and corporate finance literature. Full article

Background: The anthropology of sustainability documents and interprets diverse visions of sustainable and liveable futures. Islamic scholars and financiers are now debating the distinctive contribution of Islamic finance to global sustainability. While mainstream global finance has only recently begun to pay explicit attention to social and environmental sustainability, Islamic economics has always emphasised the need to benefit society, the community, and the environment. Objectives: We ask what has been the influence of the emergence of green and social finance upon Islamic finance in Malaysia, the global centre of Islamic finance. Methods: The study is based on collaborative, co-productive ethnography and autoethnography, and textual analysis of working documents of the Securities Commission Malaysia, focusing on how environmental requirements are expressed in new financial products, known as green sukuks, or green Islamic bonds. Results and conclusions: We have found that much of the moral debate in Islamic finance has revolved around the distribution of financial risk: when investors share the risk of failure, they can participate in society rather than merely exploiting social relations, yet the emergence of ‘green’ Islamic finance appears to shift the centre of moral gravity away from risk structuring towards technical criteria of sustainability, replicating the growth-oriented anthropocentric managerialism of mainstream finance. Full article

The aim of the present study was first to consider the impact of COVID-19 on Kuwait’s economy. Second, it attempted to examine the role of Islamic banking and finance in achieving socioeconomic justice and attaining best practices by securing social goods. Hence, the research assessed how Islamic banking and finance can help in reconstructing the economy based on Maqasid Al-Shari’ah (higher ethical objectives) to redevelop social, economic, and environmental welfare, especially in the COVID-19 era. A theoretical approach was adopted, namely, the grounded theory method (GTM), to explore COVID-19 related solutions for achieving sustainable economic development. The findings show that Islamic banking and finance can be employed to mitigate the impact of coronavirus and can be used as an alternative financial system to support both affected people and entrepreneurs. The paper expands on previous literature discussing the role of Islamic finance in management strategies through Islamic ethical objectives, with a particular focus on Kuwait’s post-COVID-19 era. This research can help policymakers to develop mechanisms and supporting approaches for Kuwait’s economy. Full article

Islamic Finance, among its other features, figures as a financial and economic model based on principles and ethical values in which sustainable development and social responsibility play an essential role. The aim of this study is to illustrate the concept of Corporate Social Responsibility (CSR) with specific reference to Islamic financial institutions, their principles, values and objectives, in order to understand the underpinning dynamics and identify the convergences between the principles underlying conventional CSR and those of Islamic Finance. Specifically, the ultimate purpose of the comparison is to highlight how CSR may constitute a significant factor of convergence between Islamic and conventional finance systems, going beyond the logic of sustainability in short-term marketing policy and implementing medium- and long-term sustainability. This approach aims at increasing the potential for value creation and the pursuit of economic, social and environmental results for all stakeholders. This convergence should, finally, create conditions favourable to the harmonisation of the regulations and directives relative to CSR in the different countries, and therefore a better integration between Islamic finance institutions and conventional ones in the economic contexts. Full article