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Journal articles on the topic 'Islamic project financing'
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Zawawi, Noor Amila Wan Abdullah, Mahadi Ahmad, Abdullahi A. Umar, Mohd Faris Khamidi, and Arazi Idrus. "Financing PF2 Projects: Opportunities for Islamic Project Finance." Procedia Engineering 77 (2014): 179–87. http://dx.doi.org/10.1016/j.proeng.2014.07.015.
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Farikhi, Amrin, Christiono Utomo, and Rifki Ismal. "Islamic Infrastructure Project Finance: A Literature Review." 14th GCBSS Proceeding 2022 14, no. 2 (December 28, 2022): 1. http://dx.doi.org/10.35609/gcbssproceeding.2022.2(36).
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Infrastructure plays an important role in supporting economic growth and competitiveness of a country, and well-developed infrastructure is often considered as the foundation for economic growth (Abdurraheem & Naim, 2018); (Amel et al, 2020). Infrastructure investment and economic growth are interrelated, because infrastructure improvements will have an impact on increasing economic growth, which in turn will encourage infrastructure investment (Selim et al, 2019). Infrastructure projects have a very large scope, long time span, and involve many stakeholders, and the need for investment in infrastructure also becomes less liquid (Mohamad, 2015). Infrastructure projects have two important characteristics that must be considered in terms of financing. The first is the long-term investment period and the second is the high cost involved in infrastructure projects (Manzoor et al, 2017). Most large-scale infrastructure projects are financed non-recourse to the sponsoring companies, this type of financing is commonly known as project finance (Camacho, 2005). Project finance has been implemented globally in infrastructure financing both in developed and developing countries. The current condition faced by developing countries, besides the high investment value required and short-term for financing in infrastructure development are the high interest rates (United Nations, 2021). Project finance with a sharia scheme (Islamic project finance) is expected to be one of the best alternatives in overcoming infrastructure financing problems. Sharia financing is the most appropriate instrument for infrastructure financing because the basic asset is the project itself that it can be used as a method for financing infrastructure investment (Abdulkareem & Mahmud, 2019) and other activities that are prohibited by Islamic finance principles (Rarasati et al, 2013). Keywords: Infrastructure; Long-term Investment; Project Finance; Sharia Scheme; Sukuk.
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Md Lasa, Yati, Norizan Ahmad, and Roshana Takim. "Financing Preference Behaviour for Private Finance Initiative (PFI) Projects." Environment-Behaviour Proceedings Journal 1, no. 1 (June 26, 2016): 11. http://dx.doi.org/10.21834/e-bpj.v1i1.188.
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Project Financing Initiative (PFI) projects require the private sector to invest an enormous amount of capital for the development of public projects. The private sector has to seek cost-effective financing sources for their survival in the long-term concession. Conventional financing uses widely; however, Islamic financing promises better financing through profit and loss sharing. This paper reviews financing preferences for PFI projects and the factors influencing the choice of funding. The results show that religious perspective, quality of services, financing facilities and reputation are the factors that are expected will influence the financing preference behaviour, either Islamic or conventional finance.© 2016. The Authors. Published for AMER ABRA by e-International Publishing House, Ltd., UK. Peer–review under responsibility of AMER (Association of Malaysian Environment-Behaviour Researchers), ABRA (Association of Behavioural Researchers on Asians) and cE-Bs (Centre for Environment-Behaviour Studies, Faculty of Architecture, Planning & Surveying, Universiti Teknologi MARA, Malaysia.Keywords: Conventional project finance; Islamic project finance; preference; Private Finance Initiative
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Felix, Rega, and Lastuti Abubakar. "Application of Al-Ijarah Al-Maushufah Fi Al-Dzimmah for Infrastructure Project Financing in Indonesia." Yuridika 35, no. 1 (October 21, 2019): 129. http://dx.doi.org/10.20473/ydk.v35i1.9021.
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Islamic bank has a huge potential to involve in large project financing such as infrastructure. The demand for infrastructure provision in Indonesia is growing rapidly, so the Islamic bank should become one of the financial institutions for a financing infrastructure project. One of the products of Islamic bank is lease based contract or ijarah. In 2016, the Indonesian Islamic Scholars Council (MUI) enacted Fatwa that allowed ijarah contract for a forward obligation or called al-ijarah al-maushufah fi al-dzimmah (IMFD). IMFD has some characteristics that equitable for infrastructure project needs, such as for long term financing. The main issues in this research are to drawn a model for infrastructure project financing by applying IMFD and observe the readiness of Indonesian regulation to support the implementation of IMFD on infrastructure project financing. The type of research is the normative study, and the approach of this research having four methods approach among others are statute approach, conceptual approach, cases approach, and comparative approach. The results of this research are model for infrastructure project financing by applying IMFD is by combining musharakah-istishna’-ijarah (IMFD) and regulation in Indonesia is not ready enough to support the implementation of IMFD on infrastructure project financing because combination of three contracts like musharakah-istishna’-IMFD, implementation of liquidated damages in istishna’ contract, and allowance IMFD in infrastructure project are not regulated in Indonesia.
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Rarasati, Ayomi, Bambang Trigunarsyah, Eric Too, Fiona Lamari, and Faiq Bahwal. "Islamic financing for infrastructure projects and its implementation barriers." MATEC Web of Conferences 270 (2019): 06005. http://dx.doi.org/10.1051/matecconf/201927006005.
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Research on Islamic project financing in infrastructure conducted predominantly in Islamic countries and developed countries showed its many benefits. This particular research focuses on Indonesia. As a developing country with a majority of Muslim population, it is reasonable to expect that Islamic project financing may also be a suitable option for financing alternatives in Indonesian infrastructure development. This paper aims to identify the barriers to implementing Islamic financing for infrastructure project development. A Delphi study was conducted to gather the views and opinions of an expert panel. The study found that the main barriers to implementing Islamic project financing are a lack of understanding of the Islamic project financing concept, a resistance to using Islamic finance, and investors’ behavior and characteristics, such as a profit-oriented mind-set and risk avoidance, which might affect the infrastructure stakeholders’ preference for using a sharia-compliant scheme.
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Chu, JinZi, and Aishath Muneeza. "Belt and Road Initiative and Islamic Financing: The Case in Public Private Partnership Infrastructure Financing." International Journal of Management and Applied Research 6, no. 1 (April 3, 2019): 24–40. http://dx.doi.org/10.18646/2056.61.19-002.
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China’s One Belt and One Road (OBOR) is a global trade network across Asia, Africa, Europe and Oceania. Also known as Belt and Road Initiative (BRI), OBOR is an attempt to redraw ancient Silk Road to foster global trade and economic development. Nearly 30 Muslims-majority countries are part of China’s vision of BRI. The purpose of this paper is twofold: first, to investigate how public private partnership (PPP) has been applied in BRI projects; and second, to explore how Islamic finance can fit within a PPP context. This paper proposes a framework for using Islamic finance in infrastructure PPP projects. This paper also analyses two PPP projects where Islamic finance was deployed as project financing. It is hoped that the discussed risks and outcome of the study will assist in integration of Islamic finance in infrastructure projects that will create efficiency in processes in cross-border cooperation.
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Rahman, Abdur, Asma Hakimah Abdul Halim, and Ruzian Markom. "Evaluation of Shariah Based Financing Instruments for Infrastructure Growth in Bangladesh." Scholars International Journal of Law, Crime and Justice 5, no. 6 (June 25, 2022): 231–40. http://dx.doi.org/10.36348/sijlcj.2022.v05i06.008.
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This paper is intended to review and discuss the evolution of financing instruments which are implemented on the infrastructure development projects in Bangladesh. To describe the available financing tools for infrastructure development in Bangladesh. All the instruments have divided into three sections, such as; Foreign Direct Investment (FDI), Public Private Partnership (PPP) and Islamic Finance (IF). We also discuss the acts and legislation activities related to the infrastructure as well as these three modes of financing to find out the factors needed to be assessed for suggesting the government of Bangladesh. This is qualitative research utilizing case study. The outcome of this study reveals why Shariah based financing is in fact the best and most suited way of financing the development of infrastructure in Bangladesh. Due to the regulatory constraints, many Islamic financial institutions are unable to invest their funds on infrastructure projects in Bangladesh. It is anticipated that through the outcome of this research, Shariah based financing instrument can be enhanced the infrastructure growth in Bangladesh and it will provide guidance to the potential Islamic financial institutions to contribute the funds required to develop a specific infrastructural project in Bangladesh.
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Shaker, Anas, and Thabit Thabit. "دور المصارف الإسلامية في تمويل المشروعات متناهية الصغيرلتحقيق التنمية المستدامة دراسة حاله في العراق." Al-Kitab Journal for Human Sciences 1, no. 1 (October 3, 2020): 11–21. http://dx.doi.org/10.32441/kjhs.01.01.p2.
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Micro-projects add value to the economy of the country by creating jobs, enhancing purchasing power and reducing costs. It is a tool for planning the participation of individuals in the economic environment. Islamic banks play a major role in promoting these projects through financing. The research aims to identify the determinants of the relationship between Islamic banks and micro-projects, and the role of these banks in the sustainable development of micro-projects. This research provides readings of the theoretical background of the concept of financing micro-projects and means of application in the Iraqi market in coordination with Islamic banks to achieve sustainable development. The researchers rely on the descriptive approach in comparing the benefits of the relationship between Islamic banks and micro-project and their role in achieving sustainable development, and developing new financing methods.The researchers conclude several results, the most important one is that the relationship between Islamic banks and micro-projects can make a positive difference for the beneficiaries by increasing the per capita income, in addition to increase the individual's sense of belonging to the surrounding environment. On the other hand, the profits of Islamic banks can be increased by reducing the risk of financing by fragmentation and thus reducing the expected losses and increasing the opportunities for financial investment and entering financial returns to the Iraqi economy, which suffers from a deficit due to lower oil prices internationally, and encouraging citizens in Iraq to invest their funds inside Iraq. Micro-projects provide a bright image of social responsibility that can be provided by Islamic banks in Iraq.
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LOKSHIN, NIKITA V. "Models of financing mechanism for public-private partnership projects and the specifics of their functioning." Public Administration 22, no. 4 (2020): 17–26. http://dx.doi.org/10.22394/2070-8378-2020-22-4-17-26.
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This article considers the public-private partnership (PPP) projects financing mechanism through the analysis of its models. The importance and necessity of using variability in structuring of different elements of financing mechanism are proved, which allows to detect the ways of their effective interaction in order to increase the efficiency of using financial resources during PPP projects implementation. The existence of basic models for PPP projects financing mechanism is justified including direct financing, project financing and financing with professional participants in the securities market. The schemes and algorithms of their functioning are presented. The article argues that in the modern conditions it is expedient to supplement the basic models for PPP projects financing mechanism by the new elements: postponed tax payments, bonds with special purpose, elements of Islamic financing mechanism models. Combining new and classic elements contributes to improvement of financing mechanism models and focuses on expanding the circle of potential investors for PPP projects.
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Manzoor, Davood, Majid Karimirizi, and Ali Mostafavisani. "Financing infrastructure projects based on risk sharing model: Istisna sukuk." Journal of Emerging Economies and Islamic Research 5, no. 3 (September 30, 2017): 72. http://dx.doi.org/10.24191/jeeir.v5i3.8832.
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One of the basic needs of developing countries is the economic infrastructure that is the basis of growth and development in other sectors of the economy. The lack of proper response to financing needs in this sector will result in economic development that faces major challenges anddifficulties. Designing an optimal solution to financing these types of projects is thus, a fundamental need. These projects have two main characteristics that should be considered in the financing method. The first is long-term period to constructing and the second is the high cost of implementation. The use of Islamic financial innovations based on Islamic contracts can meet many of these needs.States in developing countries have so far preferred to raise fund based on debt, ignoring the fact that this kind of financing and choice of method will cause many problems for the economy. Financial crises and economic stability, creating a leverage in the economy, budget deficit, inflation and the distribution of risk among economic agents are the issues that affect the structures and models of financing. IstisnaSukukhas the potential to be used for infrastructure project financing and can be combined with other contracts, including Ijarah and Musharakah, for these types of projects. In this paper, various models are presented and examined to show that by adapting the financial flows of state-owned projects with real economy, especially in the field of infrastructure, the macroeconomic imbalances can be avoided. This is most relevant in the "Istisna-Musharakah-Stock" model.
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Sultan, Abdul Wahab, and Momin Fayyaz Shaikh. "http://jibas.org/index.php/jibas/article/view/2." JIBAS 1, no. 1 (March 10, 2021): 1–8. http://dx.doi.org/10.47720/jb.2021.0101u01.
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This article briefly throws lights on the growing new trend of mobilizing Islamic finance in Infrastructure projects globally and nationally, in Pakistan. An estimate of global infrastructure needs has been studied in the light of some steamed reports. The potential of Islamic finance, especially Sukook model on preferal basis, has been described as an alternative building block of Islamic project financing.
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Bidabad, Bijan, and Mahmoud Allahyarifard. "It-Based Usury Free Financial Innovations." American Finance & Banking Review 4, no. 1 (June 4, 2019): 39–49. http://dx.doi.org/10.46281/amfbr.v4i1.289.
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Despite development and extension of different ways of financing in financial markets, encompassing Islamic and conventional financing, the mechanism of Electronic Funds Transfer (EFT) of project financing both as borrowed and non-borrowed methods has not been considered at most. Moreover overall IT infrastructures development namely Real Gross Settlement System (RTGS), Automatic Clearing House (ACH), Scriptless Security Settlement System (SSSS) and International Bank Account Number (IBAN) for authentication process and the international meta bank network of Single Euro Payment Area (SEPA) and also international integrated banking networks including the Society For Worldwide Interbank Financial Telecommunication (SWIFT) and Interbank Information Transfer Network (Shetab), and other accomplished endeavors are not efficient in absorbing international contributions for project financing through foreign exchange funds in the different countries, satisfactory E-Payment mechanism in informative portal systems for investment projects are weak. In this way, the role of applying E-Payment systems for attracting foreign investment through retail resources mobilization and design of financial instruments with the capability of transacting in the secondary markets should be reconsidered. In this paper by having a glance at different types of investment project financing, we introduce a new project financing mechanism based on E-Payment with non-usury financial instruments to complete investment project financing chain in the form of Rastin Profit and Loss Sharing (PLS) banking.Sharia compliance of financing instruments in one side and accessibility in absorbing international retail foreign exchange sources on other side are two fundamental discussible items in this paper. In this way by designing a new system of "Non-Usury Scriptless Security Settlement System" (NSSSS) with non-usury mechanisms -avoiding legislative (Sharia) circumvention- can provide the two cited goals in designing non-usury financing instruments through IT-based non-usury financial innovations which includes of Rastin Certificates in Rastin PLS banking, and Non-Usury Bonds namely Rastin Swap Bonds.
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Ali, Mohammad Mahbubi. "Toward Islamic Banking Without Tawarruq." ICR Journal 8, no. 2 (April 15, 2017): 256–59. http://dx.doi.org/10.52282/icr.v8i2.199.
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Islamic financial products have evolved and developed remarkably from simple and straightforward structures to highly sophisticated and multifaceted instruments. During the 1980s and 1990s, Islamic financial products were dominated by deposits and savings, syndicated project financing, Shari’ah-compliant stocks and mutual funds. The last two decades have witnessed the unveiling of more complicated structures, including various sukuk models, derivatives, Islamic structured products, Islamic hedge funds, and others. Most, though not all, of these replicate conventional products, splicing together nominate contracts from the Islamic fiqh legacy with a few modern modifications to meet legal requirements and to become Shari’ah-compliant’.
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Mohd Yusoff, Syarah Syahira, and Umar A. Oseni. "Standardisation of legal documentation in Islamic home financing in Malaysia." Journal of Islamic Accounting and Business Research 10, no. 3 (May 7, 2019): 448–65. http://dx.doi.org/10.1108/jiabr-02-2017-0016.
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Purpose This paper aims to provide an analytical literature survey of selective studies on legal documentation in Islamic home financing with particular reference to Malaysia. Design/methodology/approach This study adopts the legal positivist methodology, with particular reference to inclusive legal positivism which takes into consideration the possibility of moral values challenging positive law. Within the context of this study, though positive law provides for rules that govern contractual matters in Islamic home financing, standardisation is a functionality of maslahah (or public interest) which transcends the mandatory provisions of positive law but helps to protect the interest of all stakeholders. This is analysed through a systematic literature review which aims to provide practical insights into industry practices relating to Islamic home financing in Malaysia. Findings This paper provides information on the standard documentation used by conventional banks and existing practices of diverse models of legal documentation in the home financing sector within the Islamic financial services industry in Malaysia. It also recognises the need for standard documentation that is not only Sharīʿah-compliant but also consumer-friendly, as the terms of any standard financing agreement ought to ensure consumer protection. There is also the need for a Shari’ah-compliant Sales and Purchase Agreement, as it forms part of the complete set of legal documentation for Islamic home financing. Research limitations/implications It is not an exhaustive study, as it did not consider practices in other jurisdictions offering Islamic financial services and products but only focusses on Malaysia. Though one may not generalise the findings of this study, Malaysia remains a leading model and a global hub for Islamic financial services and products. Practical implications A very useful source of information on the current state of legal documentation in Islamic home financing in Malaysia and the prevailing practices in the industry, which may serve as a guide for policymakers such as the Association of Islamic Banks in Malaysia (AIBIM) to embark on a full scale project of standardisation of all the legal documentation used in Islamic home financing. Originality/value This study fulfils an identified need of standardisation of legal documentation used in Islamic home financing in Malaysia and offers practical help to policymakers and future researchers starting out on systemic reforms.
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Hariyanto, Eri. "PENINGKATAN PERAN SUKUK NEGARA DALAM PEMBIAYAAN INFRASTRUKTUR." Jurnal Anggaran dan Keuangan Negara Indonesia (AKURASI) 3, no. 2 (November 29, 2021): 56–72. http://dx.doi.org/10.33827/akurasi2021.vol3.iss2.art125.
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Sukuk Negara is one of the sharia-based financing instruments issued by the government to meet the budget deficit. This study aims to identify priority issues in the development of Sukuk Negara to enhance the role of Sukuk Negara in supporting government infrastructure financing. From the results of data management using the Analytic Network Process (ANP) method, it is known that several priority problems include the issuance of Sukuk Negara financing limited to central government projects, the lack of quality and quantity of Islamic finance human resources compared to conventional finance, and the low interest in public investment in Islamic financial instruments. The priority of the solution is the need to make regulations that allow Sukuk Negara to finance PPP project financing schemes, increase innovation and quality of sukuk products so that they are able to achieve the set targets, and foster public investment interest. Thus, the strategy in supporting the government's infrastructure development is to increase the proportion of SBSN issuance, increase socialization and communication to the public, and diversify underlying assets.
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Kantoroeva, Aijamal K., and Nurzat K. Toktomamatova. "Ijara as an Innovative Product in Agricultural Financing." International Journal of Agricultural Extension 9, no. 4 (August 18, 2021): 141–47. http://dx.doi.org/10.33687/ijae.009.00.3729.
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The relevance of the study is due to the necessity to solve the problems of agricultural lending in the Kyrgyz Republic. The problems of financing and lending to agriculture are still urgent in the Kyrgyz Republic, therefore, specific financial instruments of Islamic banking, which are highly appreciated in the practise of other countries, are well suited for project financing, work in conditions of high uncertainty characteristic of agriculture in the Kyrgyz Republic. The purpose of the study was to identify alternative loan products for agricultural economic entities based on Islamic principles of financing in the Kyrgyz Republic. Research objectives: to provide brief information on the current state in the field of agricultural lending; give brief information on the development of Islamic principles of lending in the Kyrgyz Republic; define the concept and classification of Islamic banking instruments in agriculture; define the financial instrument “Ijara” and identify its advantages. Research methods: methods of the empirical level (studying of literature and other sources of information, observation, comparison), methods of the theoretical level (study and generalisation, analysis and synthesis). In the process of writing this article, Islamic banking instruments have been reviewed and classified. The concept of Ijara contract was considered, new modern technologies in the field of Islamic banking were investigated. The main distinctive principles of Islamic banking from the Western model of financial leasing were analysed. The credit history of agriculture and forestry of the Kyrgyz Republic was analysed.
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Mustofa, Latif. "THE SUBSTANCE OF THE FORMAL PROHIBITION OF THE RIBA: ISLAMIC FINANCE AND THE TIE WITH THE REAL ECONOMY." IJISH (International Journal of Islamic Studies and Humanities) 1, no. 1 (May 7, 2018): 56. http://dx.doi.org/10.26555/ijish.v1i1.134.
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Islamic Financial Institutions come up with sharia-compliant products mimicking one of their conventional counterpart. This particular development is one of the unintended consequences under the interpretation of the prohibition of interest. Islamic Finance Institutions need to find substitute for profit-generating mechanism. There is no consequential difference between ‘interestfree’ and interest-bearing products on the practical level. This paper attempts to deal with the question of the interpretation of riba on a theoretical level. This paper argues that equity-financing should be preferred to debt-financing. In doing so, this paper embraces a juristic approach to arrive at the intended conclusion. However, debt-financing could be utilised where deemed appropriate and no equity-financing method is applicable to a particular project.
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Rarasati, Ayomi Dita, Bambang Trigunarsyah, Fiona Lamari, and Eric Too. "Islamic financing for Indonesia infrastructure project: mini hydropower plant case studies." Infrastructure Asset Management 6, no. 3 (September 1, 2019): 195–205. http://dx.doi.org/10.1680/jinam.18.00004.
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Baryal, Baryalai, Mahmood Mehraaein, and Ghazi Patang. "The Role of Cash Waqf Model in Education Development- Evidence from Afghanistan." Integrated Journal for Research in Arts and Humanities 2, no. 6 (November 27, 2022): 158–63. http://dx.doi.org/10.55544/ijrah.2.6.21.
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Cash waqf is a trust fund established with money to support services to mankind in the name of Allah. It is recognized that there is no ample study in the area of cash waqf. Again literature is very scanty relating to the cash waqf area, especially for the establishment of Islamic financial institutions for financing in education. This article aims to attempt to make an Innovative Financing education through Islamic Finance. In Afghanistan, most people do not get substantial education and there is a lack of financial support for the students in Afghanistan. We want to use cash waqf Islamic financial instruments to give efficient and sufficient education to Afghan people. we introduce this cash waqf model (CWM) or framework to help education in Afghanistan. This study has developed the (CWM) model as a source of financing for education in Afghanistan. This model is expected to provide financial services by using cash waqf funds for poor families to support their students to study. This model incorporates Musharakah, Murabaha, and mudarabah Islamic products to gain profit and support education. The methodology of this paper is qualitative research through document analysis of relevant references about cash waqf models. The general finding of this project shows that there is a possible structure for cash waqf instruments that can be implemented in the future for financing education in Afghanistan.
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Mohamad, Saadiah, Omar Salah, Mafrukhin Mokhtar, and Sharifah Faigah Syed Alwi. "Enhancing Cross Border Connectivity: Venturing into Islamic Finance as a New Source of Infrastructure Financing." Journal of Emerging Economies and Islamic Research 3, no. 3 (September 30, 2015): 30. http://dx.doi.org/10.24191/jeeir.v3i3.9066.
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Connectivity within Association of Southeast Asian nation (ASEAN) member countries becomes a central issue in view of the ASEAN Economic Community 2015. However, progress towards ASEAN connectivity especially for infrastructure developments has been limited. One of the problems is the resource mobilization for project financing. In recent years, rising demand for Islamic securities among global investors in jurisdictions where legal framework and financial infrastructure are well established has made sukuk a cost effective and preferred method of raising finance. It has also attracted liquidity to and has made Malaysia a leading global sukuk issuer and a leading Islamic financial hub. This paper is a case study on how Malaysia has used the Public-private partnership (PPP) for infrastructure development and how this has extended into Islamic financing and further examines how this model can be expanded into other ASEAN member countries in particular the Cambodia, Vietnam, Laos and Myanmar (CVLM) countries where issues of infrastructure financing is critical and need to be quickly resolved in view of an enhanced ASEAN connectivity and the future of an ASEAN community development.
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Mustofa, Mustofa, and M. Manshur Idris. "ANALISIS TINGKAT RISIKO PEMBIAYAAN MUSYARAKAH TERHADAP RETURN ON ASSETS." Ar-Risalah: Media Keislaman, Pendidikan dan Hukum Islam 17, no. 2 (November 20, 2019): 227. http://dx.doi.org/10.29062/arrisalah.v17i2.275.
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Sharia banks are present because of people's needs for alternative transactions that are without interest or usury. One form of transactions in Islamic banks is financing including mudharabah, musyarakah and murabahah which are the most frequently used contracts. Musharaka financing is the biggest contributor to assets in Islamic banks. So the high financing will affect the level of profitability of Islamic banks. The researcher wanted to examine the risks of musharaka financing to the profitability of BPR Syari'ah Situbondo which will be projected with ROA. With the formulation of problem 1) What was the procedure for financing Musyarakah in the Syari'ah Situbondo Rural Credit Bank? 2) What did risks occur in musyarakah financing to return on assets? The approach used in this research was qualitative research. While the type of research used by researchers in this research was descriptive research means describing the variables, one by one. The results showed that the Musharaka financing procedure at the Syari'ah Situbondo People's Financing Bank by fulfilling the requirements to become a BPR Syari'ah Situbondo customer by signing and filling out an account bookkeeping application form containing a complete identity and must follow the procedures determined by the BPR Syari'ah Situbondo. Risks that occur were usually when the customer did not only have one project. The funds that had been disbursed by the SRB will be used for other projects. So that the risk of musyarakah financing affects the profitability of banks.
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EBRAHIM, MUHAMMED-SHAHID, and TARIQULLAH KHAN. "ON THE PRICING OF AN ISLAMIC CONVERTIBLE MORTGAGE FOR INFRASTRUCTURE PROJECT FINANCING." International Journal of Theoretical and Applied Finance 05, no. 07 (November 2002): 701–28. http://dx.doi.org/10.1142/s0219024902001675.
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This paper models a default-free convertible facility to finance infrastructure projects in emerging Muslim countries. The mortgage is designed as a combination of an Islamic credit facility (allowing the collateralization of debt by the assets of the firm as espoused in Scott[32], Stulz and Johnson[36]) and inclusion of real warrants (as espoused in Green[12], Haugen and Senbet[15]) to mitigate the agency cost of debt discussed in Myers[27]. Numerical simulation is employed to endogenously solve for the rate of return, tenure and fractional ownership to be conveyed to financier upon conversion of the facility without resorting to any interest based (ribawi) index. Finally, sensitivity analysis is conducted to study the impact of exogenous variables and to reconcile with the existing mainstream finance literature such as Barclay and Smith[3], Stohs and Mauer [35] and Guedes and Opler [13].
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Latifah, SIti. "Peran Sukuk Surat Berharga Syariah Negara (SBSN) dalam Pertumbuhan Pembangunan Ekonomi Indonesia." Jurnal Ilmiah Ekonomi Islam 6, no. 3 (October 23, 2020): 421. http://dx.doi.org/10.29040/jiei.v6i3.1369.
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Indonesia has enormous potential in developing Islamic finance because Indonesia has the largest number of Muslims in the world and high economic growth. The issuance of State Sharia Securities (sukuk) has become the main financing instrument. The presence of sukuk further strengthens the government's ability to finance the budget deficit. The government has many choices in determining the combination of its financing instruments. The government can keep debt costs to a minimum. This study aims to determine 1) the development of sukuk in Indonesia and 2) the role of sukuk in Indonesia's economic growth. This research uses qualitative methods and library research approach. Researchers use secondary data, namely data sourced from existing literature or references. The results of this study are 1) The Indonesian government has issued Retail Sukuk (SR), namely SR 001 - SR 013. The issuance of State Sukuk from year to year continues to increase, in accordance with developments and strategies applied in the APBN. 2) The role of State Sukuk has a very positive impact, such as financing project development, encouraging development of the Islamic financial market, creating branch marks in the Islamic financial market, developing alternative investment instruments, and utilizing public funds.
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DAURENOVA, Aliya, Aigerim OSPANOVA, Panu KILYBAEVA, and Yerbolat SERGAZIN. "THE ISLAMIC DEVELOPMENT BANK AND ITS ROLE IN SOCIO-ECONOMIC REFORMS IN THE CENTRAL ASIAN COUNTRIES." CENTRAL ASIA AND THE CAUCASUS 22, no. 2 (June 30, 2021): 078–89. http://dx.doi.org/10.37178/ca-c.21.2.07.
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The purpose of this article is to analyze the activities of the Islamic Development Bank (IDB) in Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, as well as the dynamics of cooperation with each country and the region as a whole. The Bank provides a number of financing operations to promote socio-economic development in its member countries, enhance regional integration, and foster cooperation among all IDB states. The main focus of its operations is project financing. Since its inception, the Bank has approved many significant projects (already completed or still in progress) in the most important social and economic areas. In this study, use was made of the historical comparative method, the historical chronological method, and a systems approach to analyzing socio-economic activity in the region, namely, the method of analysis and synthesis. The historical comparative method was used to analyze data from annual IDB reports, particularly in identifying priority sectors of project implementation in the Central Asian countries for the entire period of cooperation, and the dynamics of project financing in the region over a period of five years. The historical chronological method was used to compile a timeline of the IDB’s relations with countries in the region. The method of analysis and synthesis was used to study the Bank’s socio-economic activities in each individual country and in the region as a whole. According to an analysis of project funding approvals, the main sectors in the Central Asia Region are transport, energy, and agriculture. Overall, despite the positive dynamics of IDB operations in the region, the amount of funding varies significantly from country to country. Kazakhstan, as a country with the most stable economic and political situation, is of particular interest to the Bank, just as Uzbekistan, which became an IDB member much later than other CA countries, but has already risen to top positions. In Turkmenistan, most of the funding goes to the transport and energy sectors, which are of interest to the country itself, whereas in other sectors the Bank’s presence is minimal, because the country is a closed one. Tajikistan and Kyrgyzstan get much less funding than the top recipients listed above. This is primarily due to their weak economy and unstable political situation, because under the IDB Articles of Agreement the main criterion for approving any financing operations is the social importance of the project for the development of the recipient country, but it is also necessary to take into account the country’s financial position and stability in order to avoid credit risks. On the whole, the IDB makes a significant contribution to the development of the region and promotes the adoption of Islamic finance in the CA countries.
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Obaidullah, Mohammed. "Enhancing food security with Islamic microfinance: insights from some recent experiments." Agricultural Finance Review 75, no. 2 (July 6, 2015): 142–68. http://dx.doi.org/10.1108/afr-11-2014-0033.
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Purpose – Islamic microfinance institutions (IsMFIs) have used diverse models and tools, as they seek to provide financial and non-financial support to the farming communities. A majortity of IsMFIs focus on provision of micro-credit to farmers alone as a means to enhance food security, following an approach similar to that of the conventional microfinance institutions. Others adopt a “finance-plus” approach and provide support in a multitude of areas other than finance, such as, technology, production, marketing, business development, capacity building, and thus, ultimately steering the project to success. The purpose of this paper is to examine the models and tools of Islamic agricultural finance for the rural poor that display major variations and draw lessons from a policy perspective. Design/methodology/approach – The study undertakes a comprehensive review of the principles, modes and models of Islamic agricultural finance targeted at small-holder farmers. It uses a case study method to review several winning initiatives by IsMFIs across the globe. It highlights the various risks and challenges confronting the projects and how the same are sought to be mitigated. Findings – Islamic agricultural finance for the rural poor involves a range of modes, mechanisms and institutional structures. Credit-based and sharing-based modes work well under specific conditions and there is no one-size-fits-all solution for financing the rural poor. Case studies of successful initiatives reveal that composite models involving the integration of philanthropy-based, not-for-profit as well as for-profit components may provide ideal solutions. Additional factors critical for success include provision of safety nets, involvement of community, non-financial support in a multitude of areas other than finance, such as, technology, procurement, production, marketing, business development and institutional capacity building. Originality/value – The paper addresses a fundamental issue in financing the poor farmers in Muslim societies – whether to opt for a credit-based approach that would ensure greater outreach or to go for a holistic intervention involving financing of the entire value chain. The findings are based on personal interaction of the author with professionals directly involved in the projects.
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Endri, Endri, Bella Tahya Hania, and Amir Ma’ruf. "Corporate green Sukuk issuance for sustainable financing in Indonesia." Environmental Economics 13, no. 1 (October 7, 2022): 38–49. http://dx.doi.org/10.21511/ee.13(1).2022.04.
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Green Sukuk is a source of financing that supports the SDGs. Climate change, the growth of the Islamic finance industry, and the rise of socially responsible investing could make green Sukuk a vital tool for financing clean energy and sustainable infrastructure projects. Many studies have identified its potential and advantages. However, no companies have issued green corporate Sukuk in Indonesia yet. The purpose of this study is to determine the potential and main problems of issuing corporate green Sukuk in Indonesia, along with possible solutions and strategies. The research method used is the analytic network process (ANP). In this study, respondents are experts in the field of green Sukuk (involved experts were from academia, project actors, and regulators). The results of the study indicate that the first destination that has the potential to be financed with green corporate Sukuk is renewable energy. At the same time, the main problem is the lack of understanding from market participants. In terms of solutions, the incentive provided by the government is the best to encourage the issuance of green corporate Sukuk. Moreover, the first strategy is to issue green corporate Sukuk with ijarah contracts. From the research results, it is hoped that the Indonesian government can be more aggressive in providing incentives to green project actors.
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Assany, Muhfiatun. "Analysis of Sharia Financing Potentials on Fisheries Sector." Journal of Finance and Islamic Banking 1, no. 2 (February 18, 2019): 150. http://dx.doi.org/10.22515/jfib.v1i2.1475.
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The purpose of this research is to find out the potency of sharia financing in the fisheries sector in Jetis Village, Nusawungu, Cilacap District. The study was conducted in Jetis Village, Nusawungu, Cilacap District, with the consideration that Jetis Village is the village with the most businesses in the field of fisheries. The sample in this research is fisherman and businessman processed Lea Fish Chips (Krispi Ikan Lea). The data in this research is collected with interview technique. The data analysis used in this research is qualitative and quantitative analysis. The qualitative analysis is used to get an overview of descriptive explanation regarding the fisheries industries. Meanwhile, the quantitative analysis is used for analyzing the cost of every activity, such as investment cost, operational cost, production and marketing cost. Financial analysis is also used to measure cash flow, Break Event Point, Payback Period, Net Present Value and sensitivity analysis. The finding of this research shows that the fisheries business in Jetis Village has the potency to get financing from Islamic Banking. Based on the analysis of the financial feasibility of the lea crispy sich (Krispi Ikan Lea) business is feasible to be cultivated. With a five year project period and 20,6% of margin rates, this business could pay their payment to the Islamic Bank dan produce a good amount of profit for their business. The fishermen also passed the financial feasibility test and are also cultivated with a five-year period of the project and with a total profit of Rp 121,245,775.
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Haneef, Mohamed Aslam, Ataul Huq Pramanik, Mustafa Omar Mohammed, Md Fouad Bin Amin, and Aliyu Dahiru Muhammad. "Integration of waqf-Islamic microfinance model for poverty reduction." International Journal of Islamic and Middle Eastern Finance and Management 8, no. 2 (June 15, 2015): 246–70. http://dx.doi.org/10.1108/imefm-03-2014-0029.
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Purpose – This paper aims to develop an integrated waqf-based Islamic microfinance (IsMF) for poverty reduction in Bangladesh. Microfinance institutions (MFIs) have been constrained by the high cost of funds, high interest rate charges and poor human resource quality of the recipients. Islamic MFIs have recently evolved with the hope of overcoming these financial, ethical and human capital deficiencies faced by the conventional financial institutions. Moreover, a good number of integrated models have been proposed to enhance the role played by Islamic MFIs. Most of these models, however, lack empirical justifications. Design/methodology/approach – The research uses survey techniques. A total of 381 respondents were included in the survey. The integrated waqf-based Islamic microfinance model (IWIMM) was earlier on developed using literature and intellectual discussions. There are six constructs presenting the IWIMM, namely, waqf resources, IsMF, takaful, project financing, human resource development and poverty alleviation. In the survey instrument, 45 items represent the six constructs, but only 26 items have been retained after factor analysis. Structural equation modelling has been adopted to examine the relationship among the constructs. Findings – The results show that there are significant relationships between IsMF and takaful, waqf resources and human resource development, takaful and human resource development, IsMF and human resource development and, waqf resources and project financing. The results also indicate that poverty alleviation is possible through the integration of these constructs. Research limitations/implications – Though the paper has studied conventional and Islamic MFIs in Bangladesh, one of the populated Organisation of Islamic Cooperation (OIC) member countries and also where poverty incidence is high, further studies need to be conducted in other OIC member countries to adopt the model in line with practical and regulatory environment of those countries. Similarly, the study is based on the perception of the respondents, which limits the generalization of the result. Practical implications – The paper proposed a model that has the potential of being applied for poverty alleviation programmes in most of the OIC member states. Originality/value – The present paper has developed an IWIMM for poverty reduction.
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Sarpini, Sarpini. "Application of musyarakah in Islamic banking." Journal of Islamic Economics, Management, and Business (JIEMB) 1, no. 1 (January 5, 2020): 173–90. http://dx.doi.org/10.21580/jiemb.2019.1.1.3710.
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Purpose - The purpose of this study is to explain syirkah, one of the popular profit-sharing scheme.Method - This research is a descriptive analysis that describes all data and then analyzes the data to obtain a conclusion.Result - This study concludes that the legal basis of syirkah is Al-Qur'an, Sunnah, ijma 'and its application in Islamic banking, namely project financing and venture capital.Implication – Understanding one of the implementation of the profit-sharing system mostly keeps the principle of justice running in the economy.Originality - This study is essential to continue to be studied and explored considering there are still many issues of Islamic law (muamalah) that need to be resolved in sharia law.
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Yuliani, Agita Eka, Tettet Fitrijanti, and Prima Yusi Sari. "SUKUK NEGARA SEBAGAI ALTERNATIF PEMBIAYAAN PROYEK INFRASTRUKTUR DI INDONESIA: SYSTEMATIC LITERATURE REVIEW." Jurnal Ekonomi Syariah Teori dan Terapan 7, no. 12 (December 26, 2020): 2361. http://dx.doi.org/10.20473/vol7iss202012pp2361-2374.
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ABSTRAKDalam mendorong pembangunan dan pertumbuhan ekonomi, dibutuhkan infrastruktur dasar baik infrastruktur ekonomi maupun infrastruktur sosial. Dalam pemenuhan kebutuhan infrastruktur dibutuhkan berbagai alternatif skema pembiayaan yang termasuk salah satunya adalah Sukuk. Penelitian ini bertujuan untuk mengetahui perkembangan trend penelitian dan potensi isu penelitian masa depan terkait Sukuk sebagai alternatif pembiayaan infrastruktur di Indonesia selama kurun waktu 2005-2020. Penelitian ini, menggunakan metode Studi kepustakaan atau Systematic Literature Review. Terdapat 27 artikel yang dirasa relevan dengan kata kunci pembahasan yang dimasukkan ke dalam tiga sitasi pencarian yaitu SINTA, Portal Garuda dan Google Scholar. Analisis menunjukkan bahwa investigasi terkait konsep pembiayaan proyek islami dan skema pembiayaan yang digunakan di Indonesia menjadi topik yang dominan untuk dibahas. Sementara topik tentang aset yang menjadi dasar penerbitan Sukuk dan bagaimana jika sukuk diaplikasikan untuk pembiayaan bersama masih langka untuk dibahas. Penelitian ini diharapkan dapat memperkaya literature review tentang Sukuk sebagai alternatif pembiayaan infrastruktur serta dapat memberikan gambaran singkat tentang isu-isu yang sedang berkembang sehingga dapat digunakan sebagai rekomendasi untuk mengembangkan penelitian ke depan.Kata Kunci: Infrastruktur, Pembiayaan, Pembiayaan Proyek Islami, Sukuk. ABSTRACTBasic infrastructure, both economic and social infrastructure is needed to encourage development and economic growth. In fulfilling infrastructure needs, various alternative financing schemes are needed, one of those schemes is Sukuk. This study aims to determine the development of research trends and potential future research issues related to Sukuk as an alternative to infrastructure financing over the period 2005-2020. The method used in this research is a qualitative study with a research approach to study literature or a Systematic Literature Review. There were 27 articles that were considered relevant to the discussion keywords that were included in the three search citations, namely SINTA, Portal Garuda and Google Scholar. The analysis shows that investigations related to the concept of Islamic Project financing and the financing schemes used in Indonesia are the dominant topics to be discussed. Meanwhile, the topic of assets which used to underlying assets and how if sukuk is applied for co-financing is still rare to discuss. This research is expected to enrich the literature review about Sukuk as an alternative to infrastructure financing and can provide a brief overview of emerging issues so that it can be used as a recommendation to develop future research.Keywords: Infrastructure, Financing, Islamic Project Financing, Sukuk
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Zainuddin, Muhammad Anwar. "AKAD MUSYARAKAH MUTANAQISAH DALAM SISTEM PERBANKAN SYARIAH." Bilancia: Jurnal Studi Ilmu Syariah dan Hukum 12, no. 2 (December 31, 2018): 321–38. http://dx.doi.org/10.24239/blc.v12i2.373.
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The need for house is one of the primary needs for every human being and basic rights for humans. The financing of musyarakah mutanaqisah in the Islamic banking system is one of the bank's involvement in the provision of housing loans. Financing musyarakah syirkatul milk is the combination of capital from two or more people to finance a project / business, profits will be divided based on the proportion of capital; whereas if there is a loss it will be borne together according to the agreement contained in the contract / contract agreement. Islamic banking has obtained formal juridical legitimacy that strengthens sharia principles as a principle that underlies the operational system of profit-sharing banking activities. This is a concrete manifestation of the objective conditions of the Islamic community's need for Islamic institutions, which is believed to be an alternative solution for efforts to optimize the economic potential of the community.
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Rahat, Rahla. "Resistance and Potential for Development: Examining the Role of Religion in the Development of Women in the Infrastructure Projects in Pakistan." Journal of Islamic Thought and Civilization 10, no. 101 (June 2020): 197–211. http://dx.doi.org/10.32350/jitc.101.11.
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Pakistan is going through large scale infrastructure development with most of the state-led mega projects being funded by international financing agencies. Many of these agencies have mandatory social safeguards to mitigate the negative impacts of the projects for project-affected-communities especially women. This provides the government an opportunity to advance the conditions of women in project areas. However, the gender mainstreaming efforts usually face resistance from communities on various grounds including religion. This study explores the nature of resistance on religious basis and the strategies used by the development practitioners to manage such resistance. A qualitative research approach was employed and through a purposive sampling technique participants were recruited for this study. In-depth interviews were used to collect data which was analyzed by thematic analysis. The data was collected from development practitioners working for government and international financing agencies on infrastructure projects. Resistance towards development of women initiatives are on interventions, presence of female staff in communities, and on giving access to project teams, including women, to females in communities. Major reasons for this resistance were suspicion of projects, especially if the financing agencies were Western, and the fear that development of women may result in women losing their religious and cultural values which may lead to the breakdown of the institution of family and Islamic society. The strategies to deal with these resistances include involving religious leaders as stakeholders, peer education through religious scholars, exposure visits for local religious leaders, developing gender and cultural sensitivities of the staff, meaningful consultation with community, and effective grievance redress mechanism.
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Tariq, Wijdan. "Why is Islamic infrastructure financing important for Qatar? A survey of Islamic project finance in the Gulf Cooperation Council countries." Qatar Foundation Annual Research Forum Proceedings, no. 2012 (October 2012): AHO6. http://dx.doi.org/10.5339/qfarf.2012.aho6.
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Majid, Rifaldi. "Mudharabah Linked Waqf: Inovasi Model Pembiayaan Berkelanjutan untuk UMKM." Al-Kharaj : Jurnal Ekonomi, Keuangan & Bisnis Syariah 3, no. 1 (February 12, 2021): 102–18. http://dx.doi.org/10.47467/alkharaj.v3i1.267.
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This study aims to formulate an innovative financing model and sustainable business assistance through the mudharabah linked waqf scheme. The method used is descriptive qualitative in the form of reviewing scientific journals, books, official news, reports and related regulations which are analyzed by content analysis. Mudharabah linked waqf is an innovation and integration of financing to Micro, Small, and Medium Enterprises (MSMEs) where the composition of the source of funds comes from commercial funds and cash waqf funds managed by Koperasi Syirkah Berkah Bersama (KSBB) through a collaboration with Indonesian Muslim Entrepreneurs Community (KPMI) chapter Surabaya. Funds will be channeled to low-risk MSME projects recommended by KPMI Surabaya with a duration of fewer than six months. The surplus of cash waqf will be distributed to social, education, economy, and da’wah activities in the form of sustainable business development and fiqh muamalah assistance by KPMI Surabaya, and the rest distributed as an incentive to reduce Murabaha margins for startups. Risk mitigation is carried out through collateral requirements, guarantor, incentive-compatible contract applications to determine cash flows and related parties in the project, as well as post-project financial audits. This model has implications for strengthening the roles of KSBB and KPMI Surabaya in encouraging literacy, inclusion, and innovation in deepening sustainable Islamic financial products, in order to strengthen the economy of ummah in the real sector
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Sidak, Vladimir, Tatiana Yegorova-Gudkova, Maksim Bojko, Andrej Krygin, and Oleg Zvirkov. "ISLAMIC CONCEPT OF FINANCING AS PROJECT AND SAFE FOR THE DEVELOPMENT OF SOCIAL SUPER-SYSTEM." ECONOMICS, FINANCE AND MANAGEMENT REVIEW, no. 1 (March 25, 2020): 44–55. http://dx.doi.org/10.36690/2674-5208-2020-1-44-55.
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Pribadi, Yanuar. "Pemanfaatan Sukuk untuk Pembiayaan Proyek Infrastruktur pada Kementerian Pekerjaan Umum dan Perumahan Rakyat." JIAP (Jurnal Ilmu Administrasi Publik) 8, no. 2 (September 10, 2020): 275. http://dx.doi.org/10.31764/jiap.v8i2.2458.
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AbstrakPenelitian ini membahas mengenai pemanfaatan utang pemerintah dalam bentuk Surat Berharga Syariah Negara atau Sukuk untuk membiayai proyek pada Kementerian Pekerjaan Umum dan Perumahan Rakyat (PU-PR). Kementerian PU-PR merupakan instansi yang mendapatkan alokasi anggaran proyek berbasis Sukuk paling besar dalam kurun waktu 2015-2019. Data penelitian berasal dari data sekunder berupa pagu anggaran dan realisasi pelaksanaan proyek dan dianalisis secara deskriptif dengan hasil wawancara dengan pelaksana proyek dan pengelola proyek Sukuk di Kementerian Keuangan. Hasil penelitian menggambarkan bahwa Sukuk merupakan salah satu sumber pembiayaan pembangunan infrastruktur pemerintah yang prospektif karena pasar keuangan syariah yang masih terus tumbuh dan berkembang. Namun demikian, kendala pada pelaksanaan proyek yang berimbas pada tambahan biaya utang perlu diminimalkan. Peningkatan kualitas perencanaan dan pengusulan proyek, penilaian kelayakan yang lebih ketat, serta mekanisme reward and punishment untuk menjamin proyek berjalan tepat waktu harus diterapkan oleh pihak-pihak yang berkepentingan sehingga pembiayaan proyek yang didanai dari utang terutama Sukuk dapat dilakukan dengan lebih efektif dan efisien.AbstractThis study aims to discusses Government Islamic Debt Securities or Sukuk used to financing the projects at the Ministry of Public Works and Public Housing. The Ministry had the largest Project Based Sukuk allocation in 2015-2019. The research uses data from budget allocation and the realization of project implementation using descriptive analysis and combined with interviews from project implementers and debt managers. The result shows that Sukuk are prospective sources for government infrastructure development as the Islamic financial markets are still growing. However, problems on project implementation need to be minimized. Quality of project planning preparation should be improved, rigorous feasibility studies, and suitable mechanism of reward and punishment has to be implemented to ensure the effectiveness of the project.
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Waleed Mansour. "Increasing Musharakah through Repetitive Mutual Promises and Participatory Hedging." مجلة إسرا الدولية للمالية الإسلامية 13, no. 1 (June 27, 2022): 5–34. http://dx.doi.org/10.55188/ijifarabic.v13i1.240.
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This paper proposes an Islamic financing product based on increased participation through the incorporation of recurring mutual promises. The product is based on three-tier increasing musharakah (partnership). In the primary stage, it brings together the entrepreneur and the Islamic bank. In the next stage, a third party, which we call the 'participative hedger', enters into the partnership relationship. The contractual relationship is characterized at the initial stage by studying the characteristics of the project and defining the contractual terms related mainly to the participative hedger's role of injecting funds to cover loss ‒ whenever it exists ‒ according to recurring mutual promises. In return for this undertaking, the participatory hedger gains a share in the profit and loss in a dynamic manner as a third participant in the capital immediately after the first injection, and he repeatedly commits to covering the risk of financial flows. This financial structuring constitutes a different way of applying the principle of profit-and-loss sharing, which Islamic banks have been relatively unsuccessful in developing products based upon.
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Majid, Rifaldi. "Mudharabah Linked Waqf:." As-Syirkah: Islamic Economic & Financial Journal 1, no. 1 (July 27, 2022): 22–38. http://dx.doi.org/10.56672/syirkah.v1i1.7.
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This study aims to formulate an innovative financing model and sustainable business assistance through the mudharabah linked waqf scheme. The method used is descriptive qualitative in the form of reviewing scientific journals, books, official news, reports and related regulations which are analyzed by content analysis. Mudharabah linked waqf is an innovation and integration of financing to Micro, Small, and Medium Enterprises (MSMEs) where the composition of the source of funds comes from commercial funds and cash waqf funds managed by Koperasi Syirkah Berkah Bersama (KSBB) through a collaboration with Indonesian Muslim Entrepreneurs Community (KPMI) chapter Surabaya. Funds will be channeled to low-risk MSME projects recommended by KPMI Surabaya with duration of fewer than six months. The surplus of cash waqf will be distributed to social, education, economy and da’wah activites in the form of sustainable business development and fiqh muamalah assistance by KPMI Surabaya and the rest distributed as an incentive to reduce murabahah margins for startups. Risk mitigation is carried out through collateral requirements, guarantor, incentive-compatible contract applications to determine cash flows and related parties in the project, as well as post-project financial audits. This model has implications for strengthening the roles of KSBB and KPMI Surabaya in encouraging literacy, inclusion, and innovation in deepening sustainable Islamic financial products, in order to strengthen the economy of ummah in the real sector.
Keywords: msmes, ksbb, kpmi surabaya, mudharabah linked waqf, sustainability
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Selasi, Dini. "Dominance Of Market Share Of Sukuk In Indonesia." Syntax Literate ; Jurnal Ilmiah Indonesia 5, no. 8 (August 20, 2020): 522. http://dx.doi.org/10.36418/syntax-literate.v5i8.1550.
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Indonesia is one of the issuers of sukuk in the world with various series that have been issued, this sukuk aims to help finance the state budget for various sectors for sustainable development programs. This study uses a qualitative research method using a phenomenological approach. The results show that the government is still dominated by sukuk because most of the financing of sukuk in Indonesia are government projects in various sectors, in their issuance in collaboration with conventional and sharia banking, securities companies that become AB Bursa. Sukuk series issued by the government such as Islamic Fixed Rate (IFR), greensukuk, Indonesian hajj fund sukuk (SDHI), savings sukuk, retail sukuk, sharia state treasury bills (SPNS), project based sukuk (PBS).
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Diniyya, Aulia Arifatu. "Development Of Waqf Based Microfinance And Its Impact In Alleviating The Poverty." Ihtifaz: Journal of Islamic Economics, Finance, and Banking 2, no. 2 (August 6, 2019): 107. http://dx.doi.org/10.12928/ijiefb.v2i2.879.
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The purpose of this paper is to discuss the potential role of the institution of Waqf in poverty alleviation. Poverty is a complex, multi-dimensional phenomenon that has captured the attention of numerous scholars and agencies globally. The social role of the Islamic financial sector can be best exemplified by providing finance to the poor to increase their income and wealth. This paper will explore on how microfinance can be provided on Shariah compliant basis through Waqf model. This research also reviewing the development of the integrated Waqf based Islamic microfinance which aimed to provide solutions to reduce poverty. An integration of Waqf-based Islamic microfinance (IWIM) model is proposed to address all the practical challenges of microfinance faced in Muslim communities. In this model, microfinance is practised in compliance with Shari’ah to address the multi-dimensional aspects of poverty and empowering the poor in order to enhance the socio-economic development and hence the well- being of the Ummah. With this aspiration, the IWIM model aims to tackle the challenges related to the scarcity of capital, inadequate human resources, absence of proper Takaful programs and project financing in an integrated approach. However, Waqf based microfinance still may be facing some problems should be addressed which related to credit risk, moral hazard, and economic viability.
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A. Hassaan, Abdel Karim, and Tagelsir H. Abdelatti. "الموجهات الإرشادية لإعداد الدراسات التفصيلية وتحديد خطوات تنفيذ المشاريع من أجــــل قيام مشاريع ناجحة من الفكرة الى التشغييل." FES Journal of Engineering Sciences 9, no. 3 (February 22, 2021): 66–71. http://dx.doi.org/10.52981/fjes.v9i3.698.
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This paper was prepared to introduce the importance of knowledge and awareness by adhering to international standards when establishing large economic projects (> 1.0 m $) through preparing a detailed feasibility study. This includes all stages of the project (from idea to operation) and identifies project outputs and indicators of success, in order to establish best projects and for the optimal use of public money, based on a comparison and clarification with some successful projects to benefit from their experience. In fact, most projects in the Sudan are not studied and implemented according to a disciplined professional hierarchy and international standards, which often leads to their failure. Therefore, defining this problem and describing the solution should be a professional duty, the greater of which is located in the economic, engineering, the administrative, and the executive sectors, but the opinion of the civil engineer still remains as a key factor from the idea to the operational (Rule of Thumb). To solve this problem, we proposed simple guidelines for establishing projects from the idea to the operating, benefiting from our experience with the Ministry of Finance and Economic Planning and the Islamic Development Bank, and guidelines from consultant homes and financing institutions in this regard. Finally, we think that our suggested guidelines can be used as basic platform for all those involved and those in charge of these projects, so that the Ministry of Finance and Economic Planning (the largest financier) can end up as binding directors (along the lines of purchase and contracting laws and regulations) to obtain the funding required to implement projects public financed with loans or grants by global or local funding agencies.
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Ajmi, Hechem, Hassaneddeen Abd Aziz, Salina Kassim, and Walid Mansour. "Adverse selection analysis for profit and loss sharing contracts." International Journal of Islamic and Middle Eastern Finance and Management 12, no. 4 (September 9, 2019): 532–52. http://dx.doi.org/10.1108/imefm-03-2018-0079.
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Purpose The purpose of this paper is to determine the optimal profit-and-loss sharing (PLS)-based contract when market frictions occur. Design/methodology/approach This paper opts for an adverse selection analysis and Monte Carlo simulation to assess the less risky contract for the principal and the agent when musharakah, mudarabah and venture capital financings are used in imperfect markets. Furthermore, this framework enables us to capture the level of market frictions that the principal can bear and the level of audit that he/she may undertake to mitigate bankruptcy. Findings The simulation results reveal that Musharakah is the less risky contract for the principal compared to Mudarabah and venture capital when the shock is low and high. Furthermore, our findings indicate that the increase of market frictions engender higher audit cost and profit-sharing ratios. The increase of the safety index in the case of high shock is most likely attributed to the increase of the audit parameter for all contracts to mitigate the selfish behavior of the agent. Accordingly, the principal tends to require a higher profit-sharing ratio to compensate for the severer information asymmetry. Research limitations/implications This paper has two main limits. First, the results were not compared to real data because the latter are not available. Second, this paper is a general framework to determine the less risky contract for the principal and does not consider the firm and sectoral characteristics. However, it can be extended in various ways where stress can be put on conflicts of interest between the principal and the agent with the aim to determine the contract that aligns their interests. In addition, the examination of firm dynamics in the case of equity and debt financing can provide further arguments for economic agents regarding the value of the firm, the growth rate and the lifetime of the project when information is asymmetrically distributed. Practical implications The findings shed some light on the necessity of the Islamic finance experts to re-think of the promotion of Musharakah because it dominates the two other contracts when market frictions occur. Social implications Although Maghrabi and Mirakhor (2015), Alanzi and Lone (2015) and Lone and Ahmad (2017) among others showed that profit and loss sharing can ensure economic growth, findings may motivate economic players to consider Musharakah financing with the aim to reach financial inclusion and social, which is in line with Shari’ah requirements and Islamic values. Originality/value Although several papers highlighted the financial contracting theory from Shari’ah perspective, they ignored the financial issues that are associated to adverse selection. This paper provides theoretical evidence regarding the selection of the less risky financing mode in case of equity financing using Monte Carlo simulation.
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Kurniawan, Taufiq, and Asmak Ab Rahman. "ANALISIS APLIKASI AKAD BAY' PADA PROJECT BASED SUKUK (PBS) DI INDONESIA." Jurnal Syariah 28, no. 3 (December 31, 2020): 417–60. http://dx.doi.org/10.22452/js.vol28no3.4.
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Islamic economic development is a task incumbent upon a good Muslim community. Indonesia has, in recent years, accelerated its economic development -especially in the area of infrastructure development- thereby requiring additional funding sources to aid this development. Thus, the government has issued Project Based Sukuk (PBS), which aims to finance the development of the country’s infrastructure. PBS is a Shariah-based financing instrument that is an alternative for Muslim communities which are interested in building a country’s economy without elements of ribā. This instrument has a main contract in the form of ijārah and supporting contracts, one of which is al-bay‘. However, the application of these contracts can only be said to be valid from a Sharā‘ perspective if all rules and conditions are throughly fulfilled. This study focuses on analyzing the application of the al-bay‘ contract on PBS. It uses a data collection method by interview and review of literature, which was then analyzed inductively to draw conclusions from the specific to the general. The study found that the majority application of the al-bay‘ contract to PBS is in line with the principles of Shariah, although there are still some issues still to be rectified.
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Choudhury, Masudul Alam. "Micro-money, finance and real economy interrelationship in the framework of Islamic ontology of unity of knowledge and the world-system of social economy." International Journal of Social Economics 45, no. 2 (February 12, 2018): 445–62. http://dx.doi.org/10.1108/ijse-11-2016-0340.
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Purpose The purpose of this paper is to explain the structure of Islamic monetary transformation into 100 percent reserve requirement monetary system in terms of the foundational epistemology of the unity of divine knowledge (tawhid). This approach is a scholarly originality in the field of epistemological formalism concerning Islamic theory and perspectives in economic reasoning in comparative perspectives. Design/methodology/approach The role of micro-money pursuing projects and real economic exchange relations is shown to arise by a natural causality in the ethical social economy (SE). This results in a microeconomic perspective of the quantity theory of money with ethical and social implications. A comparative study of endogenous money in the quantity theory of money points out significant differences between the theory of endogenous money in Islam and mainstream methodologies. A formal model of micro-money and its organismic endogenous relationship with the real economy is formulated with the goal of realizing social well-being, economic stabilization, and sustainability of development regimes. Findings This is a conceptual paper, though with the potential for continued work in applying the theory of micro-money in the Islamic methodological perspective of unity of knowledge. This is an original contribution of this paper. Islamic economists have not been able to produce a rigorous theory of micro-money. They have also not been able to situate the study of Islamic economics with its specific contribution to the field of the nature of money in project-specific financing of Islamic projects by the money-finance-real economy inter-causal relations. Thus, the findings of this paper, though of the conceptual nature, open doors to a vast field of methodological development and its application to the problem of micro-money modeling. Such a conceptual finding arising from the methodological theory of unity of knowledge and applied to the topic of micro-money along with some examples of potentiality of these approaches constitutes a vastly original field of findings as contribution. Thereby, an analytical model is established in the Islamic social economy (ISE) perspective. The model is used to explain monetary transmission and functioning of monetary policy with instruments that avoid interest rate and comply with Islamic financing requirements. The resulting model of money, finance, and real economy (MFE) systemic interrelationship in reference to the epistemology of unity of knowledge leads into the construction of a 100 percent reserve requirement monetary system with the gold-backed micro-money as currency complementing real economic transactions. Research limitations/implications The present paper is of a conceptual type based on the essential ontological and epistemological foundation of Islamic social and economic thought and bearing a deeply scientific implication. The conceptual part of this paper becomes a study in the foundations. The second part follows into the study of application in the real world of micro-money in terms of financing projects. Micro-money pursues projects in the Islamic economy due to its very nature of ethical and social choices. The paper shows that such a micro-money transmission is realized by the money-finance-real economy integrated model. Thereby, some real-world examples of such transformations are given. All these together substantiate the conceptual-analytical-empirical nature of the study conducted. Practical implications The development of the micro-money transmission system of generalized circular causation interrelations between MFE activities as a return to 100 percent reserve requirement monetary system with the gold standard is the profound theory that has been propounded. Its applied perspectives are implied through the MFE-model wherein micro-money pursues social projects. Furthermore, the possibility and practicality of such a conceptual model of micro-money and its transmission mechanism in the real economy are established by real-world examples of kinds of micro-money that are found to circulate or are recommended by some studies in the literature. Social implications The conceptual part of the paper presents a model of generalized epistemological model of unity of knowledge characterizing the MFE circular causal interrelations as the organismic meaning of social ethics and evolutionary learning. The social implications are the epistemic foundations of the derived model in the midst of choices of life-fulfillment projects that micro-money finances and the economy sustain. Originality/value This is an original paper premised on the general and the specific Islamic epistemological criterion of unity of knowledge as a generalized system theory. It is now particularized to the case of money and real economy by using the Islamic perspective of creating conditions to regenerate resources continuously in SE with ethical implications. The paper is equally informative to all who like to understand the social and ethical nature of endogenous relations between money and the real economy as two great institutions of the national economy. These together bestow well-being to the society at large in the construction of SE. Specific attention in this regard is given to ISE.
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Allah Pitchay, Anwar, Mohamed Asmy Mohd Thas Thaker, Al Amin Mydin, Zubir Azhar, and Abdul Rais Abdul Latiff. "Cooperative-waqf model: a proposal to develop idle waqf lands in Malaysia." ISRA International Journal of Islamic Finance 10, no. 2 (December 10, 2018): 225–36. http://dx.doi.org/10.1108/ijif-07-2017-0012.
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Purpose Waqf (Islamic endowment) in the form of cash is important to address the problem of developing idle waqf lands. Although there are various existing models of cash waqf, there is still a need for innovative cash waqf models. This paper aims to offer an alternative mode of financing for developing idle waqf lands using the concepts of cooperatives and waqf. Design/methodology/approach The present study first evaluates relevant literature on financing issues faced by waqf institutions in developing idle waqf lands as well as existing models of cash waqf. Based on the prevailing gap in cash waqf models, the study proposes a hybrid model of cooperative-waqf to finance idle waqf lands in Malaysia. Findings The proposed model is unique owing to the new dimension of membership being embedded into the waqf project. It considers donors as members of the waqf project, which is funded through the cash waqf collected, and thus, donors are given the privilege to receive benefits from the commercialised projects that are developed on the waqf lands. The existing models of cash waqf use traditional methods in which donors merely contribute cash waqf without any awareness of how the contributions are utilised. Usually, this problem occurs due to the lack of reciprocal communication between cash waqf donors and waqf institutions. Research limitations/implications The present study examines the case of waqf land development in the context of Malaysia only. Secondly, the paper does not contain any empirical analysis, and the development of the paper is based on existing literature that discusses various models of cash waqf practised in Muslim-majority and -minority countries. Future research can conduct surveys of donors and other stakeholders on the practicality of the model. Practical implications It is expected that the proposed cooperative-waqf model will be able to create a synchronised relationship between cash waqf donors and waqf institutions and hence boost participation in developing waqf lands. Originality/value The present study adds to the existing literature in the area of waqf and cash waqf models, especially the application of this instrument in the context of Malaysia. It also offers a new hybrid model to the State Islamic Religious Councils (SIRCs) – Malaysia’s sole trustee of waqf assets management – such that the implementation of the proposed model could boost the collection of cash waqf in developing commercial projects on idle waqf lands.
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Hapsari, Meri Indri, Mohamed Asmy Bin Mohd Thas Thaker, Mustafa Omar Mohammed, and Jarita Duasa. "A qualitative investigation into crowdfunding framework as a source of financing for waqf land development." Journal of Islamic Accounting and Business Research 13, no. 3 (December 14, 2021): 425–43. http://dx.doi.org/10.1108/jiabr-10-2020-0311.
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Purpose This paper aims to inquire about the opinions and recommendations of various experts on the crowdfunding waqf model (CWM), particularly in terms of its suitability, applicability and prospect in the market. Design/methodology/approach This paper used primary data which are collected from semi-structured interviews conducted with several experts from various backgrounds. For examining the data, this paper has used thematic analysis. Findings The experts support the suitability of CWM in providing financing resource to develop waqf lands. They highlight the importance of establishing, managing and operating CWM under the aegis of the State Islamic Religious Council in Malaysia and supervising by the Wakaf, Zakat or Hajj Department (JAWHAR). They further point out that the donors or crowdfunders, interesting project, promotion and regulation are key factors that influence the sustainability of CWM. Originality/value This paper adds to the literature on waqf land and crowdfunding, especially from the Malaysian context. This paper validates the CWM in terms of its suitability, applicability and prospect in the market by interviewing experts from various backgrounds.
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Ahroum, Rida, Othmane Touri, and Boujemâa Achchab. "Murabaha and Musharakah Moutanaquissah pricing: an interest-free approach." Journal of Islamic Accounting and Business Research 11, no. 1 (January 6, 2020): 201–15. http://dx.doi.org/10.1108/jiabr-12-2016-0147.
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Purpose This study aims to provide an interest-free valuation methodology for Murabaha and Musharakah Moutanaquissah contracts. Indeed, In Islamic finance, Murabaha contracts are widely negotiated. Their yield depends mainly on the contracted profit margin. In the current practices, this latter is based on a reference interest rate, which is highly criticized in Islamic literature, just like Musharakah Moutanaquissah contracts. In this perspective, authors suggest a new valuation methodology with parameters related to the real economy. Design/methodology/approach The authors apply an indirect method to determine a lower bound of the profit margin of a Murabaha contract. Considering Musharakah Moutanaquissah as an equivalent contract, the new valuation methodology is based on participation and focuses on parameters from the real economy: the market rent and the rate of return used for an equivalent project. Findings The results show that the pricing of Musharakah Moutanaquissah contracts could be based on several parameters linked to the real economy. Consequently, an implied value of the profit margin could be computed. Also, the interest rate is no longer implicated in the pricing of neither Murabaha nor Musharakah Moutanaquissah contracts. Research limitations/implications The valuation methodology is applicable only if the underlying asset’s financing can be made with Murabaha and Musharakah Moutanaquissah contracts. Practical implications This work will restore the link between Islamic contracts and the real economy. For Islamic banks in particular, the suggested model would reduce the exposure to reputational risk and enhance the compliance to the Sharia (Islamic Law). Originality/value Several studies have analyzed the dependence between Islamic contracts and interest rates. In general, these studies confirm this dependence and few of them have suggested alternatives. Thus, the authors contribute to the literature by providing a practical and applicable model to detach the valuation of Murabaha and Musharakah Moutanaquissah from the interest rate.
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Zainiya Anisa. "Branding Sekolah Islam Modern: Sekolah Islam Terpadu, Madrasah/Sekolah Alam, dan Tahfiz Al-Qur’an." eL-HIKMAH: Jurnal Kajian dan Penelitian Pendidikan Islam 16, no. 1 (June 30, 2022): 49–64. http://dx.doi.org/10.20414/elhikmah.v16i1.6191.
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Indicators of state progress can be measured based on the level of progress in the field of education. At present there is an inequality of quality in the world of Indonesian education, one of which is in Madrasah Tsanawiyah (MTs). From the data the researchers obtained, the number of private MTs dominated compared to public MTs, but their existence was not. However, in West Lombok there are several private MTs that have a good image and therefore have a good existence, including the Integrated Islamic School (SIT), natural madrasah, and tahfizul Qur'an. This study aims to determine branding carried out in Modern Islamic Schools, and what are the issues related to the implementation of branding in modern Islamic schools. The research method used is library research. The results of this study are, 1) Institutions make school characteristics. Then it was found that SDIT collaborated between science and tahfiz al-Qur'an and used public relations management. Madrasah Alam develops project-based learning with an independent learning pattern. And Tahfizul Qur'an, which makes a superior program by memorizing the Al-Qur'an, 2). Issues related to the branding of modern Islamic schools, namely students are positioned in a market orientation so that education is no longer based on knowledge and the talent needs of students, and there is a financing gap in the world of Islamic Education. Keywords: Branding, Modern Islamic School, Integrated Islamic School, Madrasah Alam, Tahfizul Qur'an Abstrak: Indikator kemajuan negara dapat diukur berdasarkan tingkat kemajuannya dalam bidang pendidikan. Saat ini terjadi ketidakmerataan kualitas dalam dunia Pendidikan Indonesia, salah satunya ada pada madrasah tsanawiyah (MTs). Dari data yang peneliti dapatkan, jumlah MTs swasta mendominasi dibandingkan dengan MTs Negeri, namun tidak dengan eksistensinya. Akan tetapi, di Lombok Barat ada beberapa MTs swasta yang memiliki image yang bagus sehingga memiliki eksistensi yang baik, diantaranya yaitu Sekolah Islam Terpadu (SIT), madrasah alam, dan tahfizul Qur’an. Penelitian ini bertujuan untuk mengetahui branding yang dilakukan di Sekolah Islam Modern, dan Apa isu terkait dengan pelaksanaan branding di sekolah Islam modern. Metode penelitian yang digunakan adalah studi Pustaka. Hasil dari penelitian ini adalah, 1) Lembaga membuat ciri khas sekolah. Kemudian ditemukan bahwa SDIT mengolaborasikan antara sains dengan tahfiz al-qur’an dan menggunakan manajemen public relationship. Madrasah Alam mengembangkan pembelajaran berbasiskan proyek dengan pola merdeka belajar. Dan Tahfizul Qur’an, yang membuat program unggulan dengan menghafalkan Al-Qur’an, 2). Isu-isu terkait branding sekolah Islam modern yaitu peserta didik diposisikan pada orientasi pasar sehingga pendidikan bukan lagi berbasis keilmuan dan kebutuhan bakat peserta didik, dan adanya kesenjangan pembiayaan dalam dunia Pendidikan Islam.
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Choudhury, Masudul Alam. "Res extensa et res cogitans de maqasid as-shari’ah." International Journal of Law and Management 57, no. 6 (November 9, 2015): 662–93. http://dx.doi.org/10.1108/ijlma-07-2014-0046.
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Purpose – This paper aims to undertake a critical evaluation of the purpose and objective of Islamic Law, namely, maqasid as-shari’ah, as it has evolved in Islamic scholastic experience. But, the greater philosophy and potential of maqasid as-shari’ah within the great design of the monotheistic law, sunnat-Allah, is explained. Such explanation is carried out in the light of the core of Islamic epistemology that directly induces Islamic Law. Design/methodology/approach – This critical evaluation is pursued in the light of the epistemological worldview and its methodical formalism of unity of knowledge contra a differentiated and conflicting view of human experience in rationalism. The episteme of unity of knowledge is Tawhid as the law of everything in the precept of unity as understood by the monotheistic law, sunnat-Allah. In the light of the extendibility of maqasid as-shari’ah across the relationally unifying domain of sunnat-Allah, the potentiality of shari’ah in terms of res extensa (epistemic extension) and res cogitans (cognitive capacity) is discussed. Findings – Various occidental thoughts in this quest for extendibility of the epistemic totality are critically examined by the Tawhidi monotheistic law. The universality of the Tawhidi law of monotheism in respect of its characteristics of res extensa and res cogitans is studied to bring out the potentiality of maqasid as-shari’ah. Thereby, the new vision of inter-systemic extensions across diverse domains of intellection interactively unified together is formalized. This formalism goes beyond the existing limits of maqasid as-shari’ah confined as it is to worldly socioeconomic affairs (muamalat). Research limitations/implications – A much broader investigation is opened up by this paper that can be extended by academic work. Practical implications – The practical support of the criticism against both the idea of shari’ah-compliance and the incomplete implication of maqasid as-shari’ah as presently understood among Islamic scholars is carried out by a detailed empirical work. The extension to the choice of a new financial instrument of Foreign Trade Financing Certificate is introduced. Social implications – The critical discussion launched in reference to the wider meaning, objective and purpose of maqasid as-shari’ah under the epistemology of the Tawhidi methodological worldview results in the substantive understanding of maslaha, well-being. Maslaha as well-being forms the ultimate index of socio-scientific valuation under maqasid as-shari’ah in the light of the Tawhidi epistemological worldview. Thereby, the perspective of socioeconomic development, and more extensively socio-scientific intellection, is brought out as extensively participatory evolutionary process under the principle of unity of knowledge (Tawhidi episteme). Brief examples are invoked to establish this fact. An example of measured multidimensional well-being (maslaha) as the final index of participatory organic relations that maqasid as-shari’ah ought to project in reference to Tawhidi methodological worldview is represented. Originality/value – This is a distinctively original paper in an area that has not been investigated thus far. Besides, much scope for further intellectual investigation is opened up.
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Osman, Ahmad Zamri, and Gloria Agyemang. "Privileging downward accountability in Waqf management." Journal of Islamic Accounting and Business Research 11, no. 3 (January 2, 2020): 533–54. http://dx.doi.org/10.1108/jiabr-05-2017-0064.
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Purpose This paper aims to argue for the need of beneficiaries’ involvement in matters impacting them. The current effort to improve waqf management and the trend of waqf studies seems to focus on waqf financing/investment using sophisticated financial tools and inviting participation from business entities. There was no conscious effort to engage the beneficiaries/public as the means to inform and improve the way waqf properties are managed despite it being, arguably, the primary stakeholder. Design/methodology/approach This is a qualitative study informed by the concept of downward accountability. Interviews with staff involved in managing waqf properties are conducted. Data is interpreted, resulting in emerging themes. Findings This paper argues that the way waqf entity is structured and the staff’s value is important in determining whether benefit accrues to beneficiaries. Grounded on Islamic ethos, the values of individual staff is imperative in ensuring downward accountability is discharged. The closeness and empathy between staff and beneficiaries contribute towards a meaningful operationalisation of downward accountability. Research limitations/implications Because of the nature of methodology focusing on specific waqf practices in two specific waqf settings, the result must be interpreted within its context. Practical implications Waqf entity needs to have a structure where beneficiaries are meaningfully involved. Social implications This paper argues that the benefit of waqf establishment may not accrue to beneficiaries if it is undertaken without their engagement. Originality/value This paper raises the importance of engaging beneficiaries as one of the approaches in serving them. Any future project involving the targeted beneficiaries should involve them in some capacities.