Journal of Islamic Monetary Economics and Finance
JIMF is an international peer-reviewed and scientific journal which is published quarterly by Bank Indonesia Institute. JIMF is a type of scientific journal (e-journal) in Islamic economics, monetary, and finance. By involving a large research communiy in an innovative public peer-review process, JIMF aims to provide fast access to high quality papers and continual platform for sharing studies of academicians, researchers, and practitioners; disseminate knowledge and research in various fields of Islamic economics, Monetary and Finance; encourage and foster research in the area of Islamic Economics, Monetary, and Finance; and bridge the gap between theory and practice in the area Islamic Economics, Monetary and Finance.
Articles
248 Documents
<![CDATA[THE DISCIPLINE IN THE MAKING: APPRAISING THE PROGRESS OF ISLAMIC ECONOMICS ]]>
<![CDATA[Hafas Furqani]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 1 No 1 (2015): AUGUST ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v1i1.481
<![CDATA[Islamic economics is currently moving from a mere discourse on economics in Islamic perspective towards becoming a distinct science of Islamic economics. There is a systematic effort from Islamic economic scientific community to develop a discipline of Islamic economics marked by a complete body of knowledge, clear subject matter, methodology/methodologies to appraise theories and continuous growth and accumulation of knowledge. This could be done if the scientific community put strong effort in explicating all the necessary foundations of science and achieve consensus on certain important aspect of discipline. In this paper we attempt to historically survey the development of Islamic economics towards becoming a distinct discipline, evaluate the current practices a adopted by the Islamic economics’ scientific community in settling up problems, and outlining forward agenda in order to achieve this discipline status.]]>
<![CDATA[REVISITING THE CONCEPTS OF MONEY, PROFIT AND INTEREST FROM THE PERSPECTIVE OF VALUE AND DIMINISHING MARGINAL UTILITY ]]>
<![CDATA[Ahamed Kameel Mydin Meera]]>;
<![CDATA[Hamida Mubasheera]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 1 No 1 (2015): AUGUST ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v1i1.482
<![CDATA[This article is a theoretical article that attempts to clarify the inherent meanings of the concepts of profit and interest, i.e. two important concepts in finance, particularly Islamic Finance. These are age-old concepts in economics that still draw confusion among people. Profit comes from trade and interest comes from lending and borrowing activities. While the former is much encouraged in Islam, the latter is strongly forbidden. Nonetheless, in today’s monetary and financial circumstances, the market interest rate is being used as a benchmark for the Islamic profit rate, drawing criticisms from many quarters that both are indeed one and the same. Using the fundamental economic concept of marginal utility, this paper attempts to clarify the fundamental difference in these two concepts and their implications for modern finance, particularly Islamic finance. Indirectly in the process, the paper also clarifies the concepts of money and riba.]]>
<![CDATA[DEVELOPING ISLAMIC BANKING PERFORMANCE MEASURES BASED ON MAQASID AL-SHARI’AH FRAMEWORK: CASES OF 24 SELECTED BANKS ]]>
<![CDATA[Mustafa Omar Mohammed]]>;
<![CDATA[Fauziah Md Taib]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 1 No 1 (2015): AUGUST ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v1i1.483
<![CDATA[Islamic banking has achieved remarkable growth that has surpassed the growth of the conventional banking system. Yet, studies show that the performances of Islamic banks (IBs) seem to be trailing behind the conventional banks (CBs). Is the poor performance of IBs the result of mismatch between their objectives and their performance measurement criteria or it is a reflection of their true performances? The objectives of Islamic banking had not been formally addressed. Mustafa and Taib (2009) derived the objectives of Islamic banking from Abu Zahara’s theory of the objectives of Shari’ah (Maqasid al-Shari’ah) and, based on these Shari’ah objectives, developed a model of Islamic banking performance measures. They named it as Performance Measures based on Maqasid al-Shari’ah framework or the PMMS model. This paper has tested the PMMS model on a sample 24 banks (12 IBs and 12 CBs). The twenty four banks were also evaluated using the traditional conventional financial measures. Mann-Whitney U-Test results show IBs faring well in their performances when measured using the PMMS model than when they are measured using the conventional banking performance yardstick. Policy prescriptions and recommendations for further studies are provided at the concluding section of the paper.]]>
<![CDATA[WHY DO PEOPLE SEE A FINANCIAL SYSTEM AS A WHOLE VERY IMPORTANT? ]]>
<![CDATA[Dian Masyita]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 1 No 1 (2015): AUGUST ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v1i1.484
<![CDATA[The action of one person will affect the others and then the action of one country will affect other countries. Financial crisis is like a contagious disease, which spreads everywhere. The failure in capturing systemic risk is the interconnected market events (’network externalities’) can produce self-reinforcing cycles then create the harmful situation. What happened in the banking regulation particularly Basel II? In reality, Basel II did not work completely in 2008. Since the implementation of risk management based on Basel II has been a prerequisite for a bank, it is supposed to make a positive impact. Misplaced reliance on mathematical model and statistics in managing risk could one of the problems in the decision making process. Using system thinking, system dynamics paradigm and theory of feedback system, this paper tries to see the risk management from different perspective and to enrich the understanding of how financial systems work: what drives them and causes the behavior. Many lessons can be learnt from this financial contagion since Islamic banking and finance system has inevitably been a part of the international financial systems.]]>
<![CDATA[ASSESSMENT ON THE ISLAMIC BANKING MARKET SHARE PROJECTION BY BANK INDONESIA AND PROPOSED METHODS ]]>
<![CDATA[Raditya Sukmana]]>;
<![CDATA[Heri Kuswanto]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 1 No 1 (2015): AUGUST ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v1i1.485
<![CDATA[Indonesian Islamic banking market share projected by Bank Indonesia is an integral part in developing the industry in the country. By setting a projection which will then be used as a benchmark / target, Islamic banks can make a necessary program to attract new customers which eventually increase its asset. If the increase of the asset is significant,the Islamic bank market share may increase. The problem is that the current projection by Bank Indonesia seems to be off target. It means that the projection is pretty much above the actual value. This paper attempts to utilize two projection methods namely Spline and Auto-ARIMA which we think can provide a better result. This study uses the monthly data covering period since January 2006 until December 2012. The result shows that our projections, especially using Spline method, are closer to the actual value of the Islamic banking industry market share. It means that the gap between the projection and the actual value of market share is lesser than the gap on the Bank Indonesia calculation. Moreover, this study argue that, the projection of the Islamic banking market share made by BI will not be achieved unless with government support. So far, government has not made any policy which deposit some of the national budget in the Islamic bank. This study calculates that if government regularly depositing 1% of total National Government Budget in Islamic banks, the projection of Islamic banking market share made by BI will be acheived. As a conclusion, the role of government is very significant in developing the Islamic banking industry in Indonesia.]]>
<![CDATA[MEASURING ZAKAT IMPACT ON POVERTY AND WELFARE USING CIBEST MODEL ]]>
<![CDATA[Irfan Syauqi Beik]]>;
<![CDATA[Laily Dwi Arsyianti]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 1 No 2 (2016): FEBRUARY ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v1i2.524
<![CDATA[This research attempts to analyze the role of productive-based zakat program in reducing poverty level of mustahik (zakat recipient) households from the perspective of material and spiritual dimensions. The study utilizes primary data which is obtained from interview through questionnaire in DKI Jakarta and Bogor Regency. 221 respondents are selected and interviewed as research samples. They are zakat beneficiaries managed by BAZIS DKI Jakarta and Dompet Dhuafa. The primary data collection was conducted on February until May 2015. CIBEST model comprising four indices is used as tool of analysis. These indices are welfare index, material poverty index, spiritual poverty index and absolute poverty index. It is found that the presence of zakat utilization program is able to increase welfare index of the mustahik by 96.8 percent. The material poverty index and absolute poverty index can also be reduced by 30.15 percent and 91.30 percent, respectively. Unpredictable result occurs on spiritual poverty index in which there is an increase of two households living under spiritual poverty. It means that these two zakat recipient households suffer weakening spiritual values despite materially better-off in the presence of zakat program.]]>
<![CDATA[A CASH WAQF INVESTMENT MODEL: AN ALTERNATIVE MODEL FOR FINANCING MICRO-ENTERPRISES IN MALAYSIA ]]>
<![CDATA[Jarita Duasa]]>;
<![CDATA[Mohamed Asmy Bin Mohd Thas Thaker]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 1 No 2 (2016): FEBRUARY ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v1i2.533
<![CDATA[This study was designed to empirically determine: (i) to look the factors causes micro enterprises opt for using internal funding instead of external funding; and (ii) to observe the probability of micro enterprises opt for Cash Waqf fund as alternative source of funding their business. The primary data is collected from the administered survey questions in Klang Valley (Selangor and Kuala Lumpur) and the analysis is conducted using statistical analysis and Structural Equation Modeling (SEM). The model is validated its acceptance in the field by adopting the Theory of Reasoned Action (TRA). From the findings, among the factors that lead micro enterprises to use internal funding are strict collateral requirement by commercial financial institutions, high cost of financing, strict documentation requirement and good financial and business track record. Unfortunately, most of them cannot fulfill these conditions and continue to face the problem of accessing finance. The present study has developed the Cash Waqf Investment model to support micro enterprises to improve their access to finance and enhance the skills. Based on the responses received from the field, it has been shown that the intention and readiness of micro enterprises in accepting the model as a source of financial and human capital development services is impressive.]]>
<![CDATA[THE EFFECTIVENESS OF ZAKAT FUNDING THROUGH DOMPET DHUAFA BEASTUDI ETOS SCHOLARSHIP PROGRAM ]]>
<![CDATA[Yulya Srinovita]]>;
<![CDATA[Purwa Udiutomo]]>;
<![CDATA[Pedri Haryadi]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 1 No 2 (2016): FEBRUARY ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v1i2.534
<![CDATA[The Problems of education and poverty are interrelated. The poor people cannot access higher education and they will remain poor with insufficient education. Therefore, the effort to break the cycles of poverty is to provide opportunities for the poor to obtain higher education Dompet Dhuafa through Beastudi Etos empowers education by providing coaching, mentoring and education financing funding. The population of this research is all of the beneficiaries alumni Beastudi Etos scholarship with a total sample of 190 respondents. The result of the research has shown that Beastudi Etos scholarship program is one of the programs that are quite effective in breaking the cycles of poverty through education and economic improvement. The result also indicates that the program is effective in creating excellent and independent generation. It is shown that 81.58% of respondents have successfully completed their studies (Bachelor, Master and Doctoral degrees), the others are in the process of finishing bachelor degree. 88.95% of the respondents have worked and earn income more than 7,000,000 Rupiah/month, 21.5% have dependents from 1 up to 13 persons. In general, the respondents state that coaching and mentoring which has been given is affected on the character (97.4%), skills (94.2%), socials skill (97.9%), and social generosity (97.9%).]]>
<![CDATA[EFFECTIVENESS OF ZAKAT-BASED PROGRAMS ON POVERTY ALLEVIATION AND ECONOMIC EMPOWERMENT OF POOR WOMEN: A CASE STUDY OF BANGLADESH ]]>
<![CDATA[Fahami Muhammad Anis]]>;
<![CDATA[Salina H. Kassim]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 1 No 2 (2016): FEBRUARY ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v1i2.539
<![CDATA[Among the many problems facing Bangladesh, poverty remains a key problem affecting millions of lives. During the past few decades, many initiatives have been implemented such as microcredit and cash transfer programs, yet the results seemed to be ambiguous. New frontiers are now sought to find new sources of finance which could offer a more effective and sustainable solution to the root cause of the poverty problem. Considering the idea of entrepreneurship and group-based development approach of microcredit, a zakat-based development approach was initiated in Bangladesh at a private level by an organization called Center for Zakat Management (CZM) for poverty alleviation and sustainable economic empowerment targeting poor women in rural areas. This paper aims to assess the effectiveness of the CZM efforts in utilizing zakat funds for promoting entrepreneurship among poor rural women. Focusing on the case of Bangladesh, this study assesses the effectiveness of zakat on aspects such as income, house hold expense and fixed asset accumulation of the poor client based on the “before and after” approach. Groups comprising of poor individuals and families are given equity capital/seed money and are encouraged to embark on small businesses according to their own liking. The groups are supervised for a period of a minimum of three years to ensure all individuals within the group are able to continue with their activities and ultimately, free themselves from the shackles of poverty and graduate into sustainable livelihood. Results indicate a significant nominal and real increase in average monthly income, increase in fixed assets and an increase in monthly average household expenditure before and after receiving zakat money. Results also demonstrate factors such as age of the entrepreneur, family size, type of business involved and the amount of zakat received to have a strong influence in determining the success of women entrepreneurs. Education level of the entrepreneur, on the other hand, does not seem to have significant impact on the success or failure of the entrepreneur. The findings from this paper shed light on the effectiveness of zakat-based approach in alleviating poverty and ensuring sustainable economic empowerment of the poor rural women.]]>
<![CDATA[THE ROLE OF CORPORATE ZAKAT ON OPTIMAL CAPITAL STRUCTURE POLICY: EVIDENCE FROM MALAYSIAN FIRMS ]]>
<![CDATA[Abrapuspa Ghani Talattov]]>;
<![CDATA[Nur Azura Sanusi]]>;
<![CDATA[Suhal Kusairi]]>;
<![CDATA[Abu Hassan Shaari]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 1 No 2 (2016): FEBRUARY ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v1i2.544
<![CDATA[In the finance literature, the relationship between capital structure and firm value has been extensively investigated, both theoretically and empirically. The main issue on corporate finance is how firms dealing with the important decision of capital structure. In this study, a model of capital structure is formulated in which corporate tax and zakat payment exist by firms into the consideration of combination of debt and equity. The theoretical model as shown by comparative statics prove the implication which is negatively relationship between leverage of the firm and the corporate zakat payment. Meanwhile, the empirical evidence reveals several implication as follows, (1) tax deduction reduces the current liability item relative to the firms that prefer equity financing, (2) the significant of zakat is consistent with the theoretical model that zakat would encourage firm to issue more equity than debt, (3) the strong significant relationship between return on assets with the leverage are the leading indicator of capital structure in all models.]]>
