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[SOLUTION TO OVERCOME THE BANKRUPTCY POTENTIAL OF ISLAMIC RURAL BANK IN INDONESIA ]]>
<![CDATA[Abrista Devi]]>;
<![CDATA[Irman Firmansyah]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 3 (2018): SPECIAL ISSUE ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v3i0.750
<![CDATA[This paper investigates the direct and indirect effect of macro and microeconomics variables toward financial distress by using efficiency variable as mediator. This research used time series and monthly-published report data of Islamic Banking Statistics and Macroeconomics data. The Springate Model is used to measure financial distress through s-score, while the Data Envelopment Analysis (DEA) approach is used to measure Islamic rural bank’s efficiency. The finding implies that the efficiency of Islamic rural bank in Indonesia is mainly caused by microeconomics variables where CAR and NPF directly have significant and negative effect on efficiency, while ROA and FDR directly have significant and positive effect on efficiency. The financial distress of Islamic rural bank in Indonesia is mainly caused by micro and macroeconomics variables where CAR and SIZE directly have significant and positive effect on financial distress score, while NPF and Exchange rate directly have significant and negative effect on efficiency. Efficiency is strongly having a role in mediating the effect of microeconomics variables toward financial distress score of Islamic rural bank]]>
<![CDATA[CONSTRUCTING ISLAMIC BANKING RESILIENCE INDEX IN INDONESIA ]]>
<![CDATA[Dimas Bagus Wiranatakusuma]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 3 (2018): SPECIAL ISSUE ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v3i0.760
<![CDATA[Islamic banking plays critical roles in providing many essential economic functions and services to the entire financial system and the overall economy. Thus, a strong and the resilience of Islamic banking is the foundation and pre-condition for achieving sustainable economic growth, given that banks are at the centre of the credit intermediation process between savers and investors. One of the main causes of past financial crisis was that the banking sector had built up excessive both on-and-off balance sheet levereage. To address such financial crisis, the resilience of Islamic banking needs to be developed. Therefore, this paper searches the level of resilience of Islamic banking by building the Islamic Banking Resilience Index (IBRI). The level of resilience is analyzed through the construction of the composite index. The composite is compiled on the basis of several single variables index. Its construction follows an ideal sequence of five steps: theoretical framework, data selection, normalization, weighting and aggregation, and visualization of the result. Twelve variables are used to construct the composite index by using monthly data since January 2010 until December 2016. The composite index is able to figure out the resilience level of Islamic banking in Indonesia over periods of observation. At the resilience level, Islamic banking is able to deal with shocks and stresses, while keep providing financial services. The level of resilience is capable of preserving the elements of banking sector not failing from both crash and stagnation phase. Therefore, construction of IBRI is important as surveillance tools and underlying reason for further policy response and implementation. The composite index, represented by IBRI, is able to show the level of resilience of Islamic banking in Indonesia. The paper finally suggests that the resilience of Islamic banking requires a solid capital and liquidity management in order to provide a stronger ability in absorbing shocks and promoting financial services.]]>
<![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 ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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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 ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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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[WAQF FUNDRAISING MANAGEMENT: A PROPOSAL FOR A SUSTAINABLE FINANCE OF THE WAQF INSTITUTIONS ]]>
<![CDATA[Muhammad Shulthoni]]>;
<![CDATA[Norma Md Saad]]>;
<![CDATA[Saim Kayadibi]]>;
<![CDATA[Muhammad Irwan Ariffin]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 3 (2018): SPECIAL ISSUE ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v3i0.776
<![CDATA[This paper studies the theoretical structure of financing for Islamic philanthropy in the form of waqf or endowment by looking at the past and present forms of waqf. Waqf is expected to play a more important role to tackle current social and educational issues, where financial sustainability has become one of the greatest challenges faced by waqf institutions. Using the content and thematic analysis approaches, this paper reviews the practice of successful waqf institutions and summarizes the features that are significant to a successful waqf fundraising and management. The paper analyses three models that are suitable for innovation and management of waqf fundraising: Venture Philanthropy of Waqf Model (VPWM), Value-Based Capital Model of Waqf (VBCM), and Social Enterprise Waqf Fund Model (SEWF). The paper then investigates the possibility of applying the Management by Objectives (MBO) framework to improve the overall management of waqf institutions. The discussions are hoped to be able to contribute towards developing a better fundraising and management of waqf institutions.]]>
<![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[CAN YALE ENDOWMENT MODEL BE APPLIED FOR ISLAMIC PENSION FUND? ]]>
<![CDATA[Yunice Karina Tumewang]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 3 (2018): SPECIAL ISSUE ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v3i0.787
<![CDATA[This paper examines Yale Endowment model and proposes a modified investment model to achieve an investment objective of mainstream investors and to comply with Sharia principle. The proposed model utilizes Islamic CAPM to formulate the optimal asset allocation for Islamic pension fund’s portfolio. It will offer a strong investment strong which could be adopted by government to manage the Islamic pension fund and raise the awareness of society to see the great potential of Islamic pension fund in the future. Promoting an efficient and productive investment of pension-fund assets not only helps reaching Sustainable Development Goals (SDGs) by providing important sources of long-term finance for development, supporting financial inclusion and ensuring that poverty among the elderly is alleviated by a strong growth and resilience of income in retirement through pension systems that have broad coverage.]]>
<![CDATA[THE ROLE OF INTEGRATED ISLAMIC COMMERCIAL AND SOCIAL FINANCE FOR CURBING CREDIT CYCLES AND ACHIEVING MACROPRUDENTIAL OBJECTIVE ]]>
<![CDATA[Arif Widodo]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 3 No 2 (2018): FEBRUARY ]]>
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DOI: 10.21098/jimf.v3i2.887
<![CDATA[It is widely believed that Islamic finance is inherently stable since the principle of risk-sharing and linking the financial to real counterpart in particular through its social finance are applied, hence the financial stability may successfully be attained. If mimicking the conventional finance, Islamic model will probably be facing instability, following the financial cycle. There has been a growing literature discussing credit cycle in mainstream perspective since 2008 global financial crash. However, it is quite rare to find study, in macro context, on credit cycles and the effectiveness of integrated Islamic commercial and social finance in achieving macroprudential objective: curtailing excessive credit. This study is designed to empirically examine the characteristics of cycles stemming from conventional and Islamic credit whether both have similar trend and also to investigate how the integrated Islamic commercial and social finance may be effective to hamper such cycles. By employing Hodrick-Presscot Filter, Markov Switching and Vector Error Correction Model, this study demonstrates that, in terms of cycle, Islamic model cycle has certain similarities with conventional counterpart since it functions under similar financial environment despite the fact that Islamic has less amplitude compared with conventional credit. Both credit and financing cycles tend to grow rapidly (excessive) several months before global financial crisis happened in 2008. This means that, in a dual banking system, credit and financing boom may precede financial crisis. Moreover, it is apparent also that the integrated Islamic finance is proven to be effective in curbing credit growth due to the effectiveness of both macroprudential instrument applied in banking sector and social finance in safeguarding financial stability.]]>
<![CDATA[DO RISK, BUSINESS CYCLE, AND COMPETITION AFFECT CAPITAL BUFFER? AN EMPIRICAL STUDY ON ISLAMIC BANKING IN ASEAN AND MENA ]]>
<![CDATA[Novita Kusuma Maharani]]>;
<![CDATA[Bowo Setiyono]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 3 No 2 (2018): FEBRUARY ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v3i2.888
<![CDATA[Basel III guidelines were released in 2010 by the Basel Committee on Banking Supervision (BCBS) as a revision of the previous Basel guidelines with the aim of strengthening the bank's capital and liquidity of banks. BCBS formulate a new policy that is the capital buffer. Capital Buffer is the difference between the minimum capital required by regulators with its overall capital and is considered a "cushion" against the shocks of the financial crisis. This study examine the impact of risk, business cycle, and competition on banks’ capital buffer. This paper used the sample of Islamic banks and conventional banks in ASEAN and MENA in the period 2011-2015 with unbalanced panel data. Using System GMM method to test the characteristics of Islamic banks in managing its capital. The finding indicates that the degree of capital buffer in islamic banks tend to adjust its risk. The result also shows that capital buffer decrease during economic expansion where banks act aggressively by extending their lending activities. The relationship between capital buffer and competition is positive in that the high level of competition to motivate banks to have higher capital.]]>
