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.
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<![CDATA[STUDY ON THE EFFICIENCY OF CASH WAQF MANAGEMENT IN MALAYSIA ]]>
<![CDATA[Siti Razifah Khamis]]>;
<![CDATA[Marhanum Che Mohd Salleh]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 4 No 1 (2018): AUGUST ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v4i1.732
<![CDATA[The role of Waqf is synonym with the purpose of developing the economics as well as social well-being by means of a charity-based system. Revitalization of cash Waqf gives advantage to Muslims countries to further enhance this charity system. However, the efficiency of cash Waqf management is still questionable due to several internal management issues. This research is conducted to explore current practices of Waqf institutions in managing cash Waqf concerning human resource, documentation and reporting aspect; to investigate challenges faced by Waqf institutions in managing cash Waqf in terms of human resource, documentation and reporting aspects; and to suggest a few ways that can enhance the efficiency of cash Waqf management focusing in the three aspects. To achieve these objectives, qualitative methodology has been adopted where the data of this research was collected through semi-structured interview and review of past literatures as well as relevant documents. The finding of the research shows that majority of Waqf institutions have made efforts in promoting cash Waqf based on its regulation, financial sources, collaboration, duration of cash Waqf implementation and its strategic planning. However, the current practices of human resource, documentation and reporting are not suitable with the current pace of evolution to fully realize the benefit of cash Waqf. This research revealed the loopholes in the management of cash Waqf and suggested several ways for improvement as a reference for Waqf institutions in order to improve their cash Waqf implementation. It is a significant endeavor for Waqf institutions in Malaysia to develop knowledge on cash Waqf management as well as provoking speedy development progress of cash Waqf implementation in Malaysia.]]>
<![CDATA[DEBT TAKING AND CHARITY-GIVING AMONG LOW-INCOME HOUSEHOLDS: STRENGTHENING RESILIENCE IN ISLAMIC PERSPECTIVE ]]>
<![CDATA[Laily Dwi Arsyianti]]>;
<![CDATA[Salina Kassim]]>;
<![CDATA[Adewale Abideen Adeyemi]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 4 No 1 (2018): AUGUST ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v4i1.739
<![CDATA[Households’ financial problem was perceived to be solved by taking other source of fund such as debt. In Islam, taking debt should be considered as the last resource when other sources were not available. Islam gives solution for those who have financial problem. Giving just small amount of money would give barakah to the giver. Charity-giving is not privilege for the rich people, but also for those in dire conditions. This paper attempts to explore whether low-income households’ perception on consecutive debt-taking influences their perception on regular charity-giving especially to achieve stipulated outcomes, i.e. households’ financial resilience. Structural Equation Modelling (SEM) is employed to analyse 1780 data from respondents across six areas in Indonesia. Low-income households perceived consecutive debt-taking to have negative relationship with regular charity-giving and positive relationship with outcomes (households’ financial condition and lifestyle satisfaction). Meanwhile, regular charity-giving has negative relationship with the outcomes when consecutive debt-taking intervene the relationship. Financial education and selection of financing institution have been proven to have relationships with variables which influence both regular charity-giving and consecutive debt-taking behaviours. As recommendation, charity education or sharing values should be included in the current financial education program. Formal financial institutions and social finance institution should also encourage supervision and continuously give financial education to social funds receivers.]]>
<![CDATA[REVISITING ANALYSIS OF THE ROOT CAUSES ON FINANCIAL CRISIS IN ISLAMIC PERSPECTIVE ]]>
<![CDATA[Mega T.R. Luik]]>;
<![CDATA[Ahlis Fatoni]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 4 No 1 (2018): AUGUST ]]>
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DOI: 10.21098/jimf.v4i1.745
<![CDATA[Steady financial system stability is important in an economy. The financial crisis showed a constantly recurring problem that has not been resolved completely. Macroprudential policy which became the term savior after the subprime mortgage crisis was essentially a temporary not eliminate the root causes of the problems of the financial crisis. This study attempts to revise the root causes of the financial crisis in the perspective of Islam by using three approaches namely Vector Error Correction Model (VECM), Error Correction Model (ECM), and Distributed-Lag Autoregressive (ARDL). The result of this study that the consistence of ribâ (interest rate) variable as the main factor of crisis; ribâ increases the inflation and decreases the growth. The IRF (impluse response function) result and FEVD (forcast error varian decomposition) show 21.87% interest rate (INT) increases the inflation and decreases the growth by 9.5%, while profit-loss sharing (PLS) variable contributes to decreases the inflation by 0.02% and increases the growth by 0.61%, reciprocally with ECM approach that interest rate (INT) has positive effect to inflation and negative effect to growth (financial crisis) vice versa PLS sicnificantly has negative effect to inflation and positive effect to grwoth, whereas ARDL approach shows that PLS increases the grwoth at long and short run but also increases the inflation at long run. Another conventional variabels consistantly contribut to financial crisis acording to all aproachs; volatile food (VFP) and administred price (ADM).]]>
<![CDATA[THEORETICAL IMPACT OF ENHANCED MUSHARAKAH MUTANAQISAH HOME FINANCING ON REAL ESTATE PRICES ]]>
<![CDATA[Alam I. Asadov]]>;
<![CDATA[Mansor H. Ibrahim]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 4 No 1 (2018): AUGUST ]]>
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DOI: 10.21098/jimf.v4i1.747
<![CDATA[This paper theoretically analyzes two alternative modes of home financing. The first mode is the conventional housing loan and the other is Enhanced Musharakah Mutanaqisah (EMM) home financing. Our results reveal the EMM based setting is superior to the conventional housing loans in at least two aspects. These are the prevention of house price inflation in all phases of economic business cycle and the smoothening of real estate cycles. This means that, under the EMM, the risk of real estate bubble formation is subdued, which should prove to be welfare improving.]]>
<![CDATA[PROPOSING A MODEL FOR ENTREPRENEURSHIP DEVELOPMENT: THE ROLE OF ENTREPRENEURS’ CASH WAQF INTENTION ]]>
<![CDATA[Sherifah Oshioke Musa]]>;
<![CDATA[Marhanum Che Mohd Salleh]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 4 No 1 (2018): AUGUST ]]>
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DOI: 10.21098/jimf.v4i1.764
<![CDATA[This paper aims to propose a model of entrepreneurship development by focusing on the role of cash waqf intention as a mediator on the relationship of cash waqf awareness, religiosity, attitude towards act, subjective norms, perceived behavioral and entrepreneurship development. By enhancing the theory of planned behavior, a structured question was designed to survey 459 Nigerian entrepreneurs. SEM analysis was used to test the theoretical framework and to propose a model of entrepreneurship development in Nigeria by means of Waqf. Result shows that the most important variables to explain entrepreneurs’ cash waqf intention for business growth are cash waqf awareness and attitude towards cash waqf. It is argued in this research that the presence of high level of cash waqf awareness and the attitude towards cash waqf can play an important role in achieving business growth. The paper extends the applicability of the theory of planned behavior, cash waqf awareness and religiosity in investigating the effect of cash waqf intention for business development.]]>
<![CDATA[ZAKAT FOR POVERTY ALLEVIATION AND INCOME INEQUALITY REDUCTION: WEST JAVA, INDONESIA ]]>
<![CDATA[Qurroh Ayuniyyah]]>;
<![CDATA[Ataul Huq Pramanik]]>;
<![CDATA[Norma Md. Saad]]>;
<![CDATA[Muhammad Irwan Ariffin]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 4 No 1 (2018): AUGUST ]]>
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DOI: 10.21098/jimf.v4i1.767
<![CDATA[This research aims to analyze the role of zakat distribution programs for poverty allevation and income inequality reduction among groups in urban and rural areas. It takes the case study of 1,309 zakat beneficiaries managed by the National Zakat Board of Indonesia (BAZNAS) as the coordinating zakat institution in Indonesia, in five different cities and regencies in West Java Province namely, Bogor, Depok and Sukabumi. The analytical tools used in this study are the modification of the Center of Islamic Business and Economic Studies (CIBEST) model, CHAID analysis, Deciles method and Gini coefficient. This study suggests that the present zakat distribution programs can significantly alleviate poverty and reduce income inequality among the observed zakat beneficiaries. It is also found that spiritual supervision and routine assistance form BAZNAS officers, informal education, family size, age and job of the respondents are the variables that are statistically significant in influencing the increase of the households’ monthly income and spirituality.]]>
<![CDATA[ZAKAT: CONCEPT AND IMPLICATIONS TO SOCIAL AND ECONOMIC (ECONOMIC TAFSĪR OF AL-TAWBAH:103) ]]>
<![CDATA[Abdul Wahid Al-Faizin]]>;
<![CDATA[Taqiyah Dinda Insani]]>;
<![CDATA[Sri Herianingrum]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 4 No 1 (2018): AUGUST ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v4i1.780
<![CDATA[One of the most used methods by Ulamā’ to find the laws and wisdoms from Quran is a tafsīr method. This paper try to find and analyze the concept from sūrah al-Tawbah: 103 - ayah with the more general content related to the concept and function of zakat – by using the tafsīr method and how the implication of zakat for the social and economic equality is. The method used in this paper is a qualitative method by using content analysis that combines tafsīr bi al-ra’yi with tafsīr bi al-ma’thūr. By using economic interpretation, the result shows that zakat should be an obligatory system and its management must be done centrally by the government. In this case Baznas can be a representation of the government to perform the task. The study also found that there are two implications of the zakat mentioned in sūrah al-Tawbah: 103. First, التطهير (purification) through which zakat is able to provide social implications of tranquility, security, and harmony. Secondly, التزكية (holy, blooming, blessing and praise) through which zakat has economic implications both in micro aspects (increase in quantity in the economic curve) and macro (increased investment and depletion of poverty and unemployment).]]>
<![CDATA[AN EMPIRICAL INVESTIGATION OF CONSUMPTION BEHAVIOUR IN SELECTED OIC COUNTRIES ]]>
<![CDATA[Salman Ahmed Shaikh]]>;
<![CDATA[Mohd Adib Ismail]]>;
<![CDATA[Abdul Ghafar Ismail]]>;
<![CDATA[Shahida Shahimi]]>;
<![CDATA[Muhammad Hakimi Mohd. Shafiai]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 4 No 1 (2018): AUGUST ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v4i1.785
<![CDATA[This study examines the consumption behaviour in Organization of Islamic Cooperation (OIC) countries. It presents empirical evidence on rational expectations permanent income hypothesis (RE-PIH) and tests whether the phenomena of myopia, liquidity constraints or loss aversion impede forward-looking consumption behaviour. It also attempts to measure the intertemporal elasticity of substitution. The empirical evidence defies the existence of consumption smoothing phenomena as postulated in RE-PIH. The results support loss aversion. The response of consumption to unexpected income changes is statistically significant in only one-third of the countries. In contrast, the response of consumption to expected income changes is statistically as well as economically significant in as many countries. The intertemporal elasticity of substitution is also statistically insignificant in most of the countries and the elasticity is generally not positive. For the Islamic finance industry, the results help in explaining the low penetration of equity-based risk sharing instruments. From the policy perspective, the excess sensitivity of consumption to income suggests that redistribution efforts to enhance incomes of poor could help in enhancing their consumption levels.]]>
<![CDATA[EVOLUTION IN WAQF JURISPRUDENCE AND ISLAMIC FINANCIAL INNOVATION ]]>
<![CDATA[Mohammad Abdullah]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 4 No 1 (2018): AUGUST ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v4i1.920
<![CDATA[This paper aims to analyse the evolutionary process in the jurisprudential structure of modern waqf (Islamic endowment) and underlines the scope of Islamic financial innovation through the mechanism of waqf. The paper proposes the innovative models of parallel waqf, waqf-based social and financial instruments, waqf-based ṣukūk, micro-takāful, and waqf-based commodity bank. The research adopts the qualitative approach and employs socio-legal research methodology for the analysis. The paper relies on desk-based research. Compared to the classical structure of waqf which was confined within the domain of a perpetual charitable institution, this paper finds that modern waqf has ushered in several new dimensions into its fold. Modern waqf is in the process of re-evolution. Waqf, in the current scenario, has evolved into a financial product, a property-conveyance tool, an instrument of contract, an investment tool, a risk mitigation mechanism and an incorporated entity. The scope of this paper is limited to analysing the jurisprudential evolution of waqf and its impact on the Islamic finance industry. It does not seek to discuss the overall role or impact of waqf on the society as a whole. This paper also does not endeavor to compare and contrast the mechanism and modalities of other philanthropic institutions vis-ā-vis waqf. This paper examines the jurisprudential underpinnings of waqf and their implications and applicability to the Islamic finance industry. The paper draws on the process of how the mechanism of waqf has already been employed to develop various innovative Islamic financial products and how this process can be a catalyst for further innovation in the Islamic finance industry. The main contribution of the paper is encapsulated in the analysis of how the jurisprudential structure of the modern waqf has been evolving in the last few decades to accommodate the modern needs of Islamic finance. It further enumerates a few innovative Islamic financial products which can be developed by exploiting the available flexibility in the evolved version of modern waqf.]]>
<![CDATA[PROCYCLICALITY AND BANK LENDING BEHAVIOR IN INDONESIA: THE CASE OF DUAL BANKING SYSTEM ]]>
<![CDATA[Muhamed Zulkhibri]]>;
<![CDATA[Muhammad Rizky Prima Sakti]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 4 No 1 (2018): AUGUST ]]>
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DOI: 10.21098/jimf.v4i1.921
<![CDATA[It is widely suggested in the literature that procyclicality of bank lending behavior may lead to financial instability. This study examines bank-lending channel over the business cycle for Indonesian dual banking system by ascertaining to what extent Islamic banks have a role in the credit smoothing. In this context, we utilize Indonesian dual banking system unbalanced panel data for the period 2001-2015. By employing two-step dynamic GMM estimators, the study shows that the bank lending behaviour are procyclical. However, when we categorize the lending behaviour into conventional and Islamic banks, the cyclicality of bank lending affects only for conventional banks. As for the Islamic banks, the business cycle does not affect their financing decision. Specifically, large Islamic banks are more counter-cyclical in their financing behavior than small and medium size Islamic banks. Robustness tests using different measures of loans and model specifications confirm the results that Islamic bank is more stable and less procyclical in the case of Indonesia banking system.]]>
