DOCSLIB.ORG

Based Crowdfunding Structure

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Based Crowdfunding Structure A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Buerhan Saiti; Muhibullah Afghan; Nazrul Hazizi Noordin Article Financing agricultural activities in Afghanistan: a proposed salam-based crowdfunding structure ISRA International Journal of Islamic Finance Provided in Cooperation with: International Shari'ah Research Academy for Islamic Finance (ISRA), Kuala Lumpur Suggested Citation: Buerhan Saiti; Muhibullah Afghan; Nazrul Hazizi Noordin (2018) : Financing agricultural activities in Afghanistan: a proposed salam-based crowdfunding structure, ISRA International Journal of Islamic Finance, ISSN 2289-4365, Emerald, Bingley, Vol. 10, Iss. 1, pp. 52-61, http://dx.doi.org/10.1108/IJIF-09-2017-0029 This Version is available at: http://hdl.handle.net/10419/236918 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ www.econstor.eu The current issue and full text archive of this journal is available on Emerald Insight at: www.emeraldinsight.com/0128-1976.htm IJIF 10,1 Financing agricultural activities in Afghanistan: a proposed salam- based crowdfunding structure 52 Buerhan Saiti Department of Islamic Economics and Finance, Received 7 September 2017 Istanbul Sabahattin Zaim Universitesi, Istanbul, Turkey, and Revised 19 October 2017 17 December 2017 9 March 2018 Muhibullah Afghan and Nazrul Hazizi Noordin 13 March 2018 Institute of Islamic Banking and Finance (IIiBF), Accepted 14 March 2018 International Islamic University Malaysia, Kuala Lumpur, Malaysia Abstract Purpose – This study aims to explore the potentials of adopting salam-based crowdfunding for financing the agricultural sector in Afghanistan. Design/methodology/approach – It adopts a triangulation approach, consisting of a number of methods used in gathering relevant information about Afghanistan’s agricultural sector, the concept of crowdfunding and salam (forward sale) contract. These methods include library research, reviewing documents provided by Afghanistan’s banks and semi-structured interviews with Islamic finance experts. Findings – This study finds that salam-based crowdfunding is a viable Sharīʿah-compliant investment platform, which may offer some advantages for both potential investors and farmers or entrepreneurs. Originality/value – The novelty of this paper lies in the proposed structure of salam-based crowdfunding. Keywords Afghanistan, Crowd-funding, Islamic social finance/Islamic finance, Salam Paper type Research paper Introduction Afghanistan is an underdeveloped agricultural country that has faced major constraints in achieving financial sustainability and sustaining economic development in recent years. Afghanistan’s economy is predominantly dependent on the agricultural sector. For instance, irrigated wheat, which is the country’s major crop, contributes on average 6.3 per cent of the nation’s annual gross domestic product (GDP). The livestock and horticulture subsector covers almost 14 per cent of land and employs more than 2 million people (World Bank, © Buerhan Saiti, Muhibullah Afghan and Nazrul Hazizi Noordin. Published in the ISRA International Journal of Islamic Finance. Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be ISRA International Journal of seen at http://creativecommons.org/licences/by/4.0/legalcode Islamic Finance The authors are deeply grateful to the editors and the anonymous reviewers for their helpful Vol. 10 No. 1, 2018 pp. 52-61 comments, which improved the quality of the paper greatly. The authors acknowledge and assume Emerald Publishing Limited responsibility for any other mistakes or errors within the manuscript. The remaining mistakes 0128-1976 DOI 10.1108/IJIF-09-2017-0029 belong to authors. 2014). However, 40 years of war and a series of severe droughts have seriously affected Financing Afghanistan’s agricultural sector (Miller, 2006). Apart from that, the country’s agricultural agricultural sector is said to be underutilised for a number of reasons. Firstly, there are large areas of fertile land in many provinces that are left idle owing to a lack of financing (Kawasaki et al., activities 2012). Secondly, the majority of farmers are unbankable and financially excluded. Farmers who do have banking access mostly cannot afford to obtain loans from banks owing to high interest rates and a lack of collateral (McCusker, 2005). Withaviewtoreducingrelianceonimportedgoods, the government is set to further develop 53 the country’s agricultural sector by exploring possible financing means offered by Islamic finance. It is anticipated that this movement to rejuvenate agricultural production is critical to the reconstruction of Afghanistan (Kawasaki et al.,2012). The level of public awareness and acceptance of Islamic finance in Afghanistan has radically improved over time. Currently, 7 out of the 17 licensed financial institutions offer Sharīʿah-compliant services in the country. The country’s nascent Islamic finance industry has promising prospects. This paper, however, explores the possibility of adopting salam-based crowdfunding, a viable Islamic financial product innovation that is relevant to meeting the financing needs of the agricultural sector. The introduction of salam-based crowdfunding is imperative to the development of Afghanistan’s agricultural sector, primarily for production of seasonal foods and crops. Given the volatile and risky nature of agricultural markets, the features of the salam (forward sale) contract are anticipated to soothe commodity price fluctuations and push the country’s productivity level upward (Kaleem and Abdul Wajid, 2009). The International Fund for Agricultural Development (IFAD, 2009) avers that not only local farmers, but also foreign-owned plantations, processing factories, storage facilities and fertiliser companies may need third-party financing to carry out their businesses. However, a number of factors frustrate the development of adequate financial services in rural areas in most developing countries. One of the important factors is transaction costs, which are higher in rural areas than urban areas owing to a more dispersed population and weak infrastructure. This study adopts a qualitative approach to explore the potential of salam-based crowdfunding as a mode of financing the agricultural sector in Afghanistan. Relevant literature on salam and crowdfunding has been reviewed; The Bank of Khartoum’spracticeofsalam transactions has been examined, and Islamic finance experts have been interviewed on the subject. This study is exploratory in nature as salam-based crowdfunding is still at a conceptual or incipient stage and is yet to be implemented in the market. The novelty of this paper lies in the proposed structure of salam-based crowdfunding. The rest of this paper is structured as follows. The next section provides the background of Afghanistan’s agricultural sector and Islamic financial services development. The paper then reviews the concept of salam-based transactions and crowdfunding available in the existing literature. The following section describes the proposed structure of salam-based crowdfunding, and the last section summarises and concludes the paper. Afghanistan’s agricultural sector and Islamic finance Background of Afghanistan’s socio-economy Afghanistan is listed in the United Nation’s (UN) List of Least Developed Countries (LDCs). The country’s economy has been adversely affected by a series of foreign invasions and civil wars, which have led to the current lack of investment. The International Monetary Fund (IMF) has labelled Afghanistan as an underdeveloped low-income country that has experienced high inflation and moderate socio–economic growth and stability over the last 15 years (IMF, 2016). Recent data from the Asian Development Bank show that 39.1 per cent of the population in Afghanistan lives below the national poverty line. According to the IJIF World Bank (2014), despite the economic recovery under the post-Taliban regime in 2001, 10,1 the country is still experiencing Third World problems. These include providing clean drinking water, adequate medical facilities and affordable housing and ending the high dependence on foreign
Load more

Recommended publications
  • New Model of Salam Sale for Agricultural Development Finance
    Research Article New Model of Salam sale for Agricultural Archives of Development Finance Al Siddig Talha M Rahma* Agriculture Imam Mohammed Ibn Saud Islamic University, College of Economics &Business administration, Kingdom of Saudi Arabia Research and Abstract Technology (AART) The new financial economic model derived from the traditional Salam situation. This scenario is based on the idea behind the treatment of risks facing traditional Salam applications, which includes high rates of inflation and the exit of financing from its approved aspects, which cannot enable the farmer or producer to disburse this monetary benefit in the Volume 1 Issue 3, 2020 fields of agriculture. Then Banks and financial institutions lose huge amounts of money that are wasted. In addition, lack of understanding of the process of obtaining loans between farmers and producers, this new model can solve many problems Article Information and risks in the classic sales of Salam, which rely mainly on granting cash loans. Received date: May 28, 2020 Published date: July 07, 2020 The paper works to monitor and limit the risks posed by the traditional Salam and pushes that agricultural financing loses. It is most important input to financing and then corrects the paper and it relies on this innovative model, which aims to provide the necessary inputs to farmers and producers. This paper attempts to solve this problem by providing inputs directly *Corresponding author by updating production through regular and timely operation of modern scientific inputs. Al Siddig Talha M Rahma, Imam Mohammed Ibn Saud Islamic University, The study identified the structural equation model to analyze the results of the analysis of descriptive statistical data, College of Economics & Business which resulted in the preferred cash financing for farmers as a desirable situation.
    [Show full text]
  • Perkembangan Perekonomian Ekonomi
    i PERKEMBANGAN PEMIKIRAN EKONOMI ISLAM i Sanksi Pelanggaran Hak Cipta Undang-Undang Republik Makassar No. 19 Tahun 2002 tentang Hak Cipta Lingkup Hak Cipta Pasal 2: 1. Hak Cipta merupakan hak eksklusif bagi pencipta dan pemegang Hak Cipta untuk mengumumkan atau memperbanyak ciptaannya, yang timbul secara otomatis setelah suatu ciptaan dilahirkan tanpa mengutrangi pembatasan menurut peraturan perundang-undangan yang berlaku. Ketentuan Pidana Pasal 72: 1. Barang siapa dengan sengaja atau tanpa hak melakukan perbuatan sebagaimana dimaksud dalam pasal 2 ayat (1) atau pasal 49 ayat (1) dan (2) dipidana dengan pidana penjara masing-masing paling singkat 1 (satu) bulan dan/atau denda paling banyak Rp 5.000.000.000,00 (lima milyar rupiah). 2. Barang siapa dengan sengaja menyiarkan, memamerkan mengedarkan, atau menjual kepada umum suatu ciptaan atau barang hasil pelanggaran Hak Cipta atau Hak Terkait sebagaimana dimaksud dalam ayat (1) dipidana dengan pidana penjara paling lama 5 (lima) tahun dan/atau denda paling banyak Rp 500.000.000,00 (lima ratus juta rupiah). ii DR. ABDUL RAHIM S.Ag,M.Si,MA PERKEMBANGAN PEMIKIRAN EKONOMI ISLAM PENERBIT YAYASAN BARCODE 2020 iii PERKEMBANGAN PEMIKIRAN EKONOMI ISLAM Penulis: Dr. Abdul Rahim,S.Ag.,M.SI,MA Tata Letak/Desain Cover: Sulaiman Sahabuddin, S.Pd.i Editor : Juhasdi SE,MM Copyright © 2020 Perpustakaan Nasional: Katalog Dalam Terbitan (KDT) ISBN: 978-623-285-080-4 23x15 cm Diterbitkan pertama kali oleh: YAYASAN BARCODE Divisi Publikasi dan Penelitian Jl. Kesatuan 3 No. 11 Kelurahan Maccini Parang Kecamatan Makassar, Kota Makassar Email: [email protected] HP. 0813-4191-0771 iv KATA PENGANTAR Puji syukur kita panjatkan kepada Allah SWT.
    [Show full text]
  • Islamic Credit Cards: How Do They Work, and Is There a Better Alternative?
    Journal of Islamic Banking and Finance December 2017, Vol. 5, No. 2, pp. 1-8 ISSN 2374-2666 (Print) 2374-2658 (Online) Copyright © The Author(s). All Rights Reserved. Published by American Research Institute for Policy Development DOI: 10.15640/jibf.v5n2a1 URL: https://doi.org/10.15640/jibf.v5n2a1 Islamic Credit Cards: How Do They Work, And Is There A Better Alternative? Bukhari M. S. Sillah1 Abstract Credit card, which is one of the noncash payment methods, has been growing exponentially. Credit card generally uses credit balances advanced by the banks to make payments. The banks charge cardholders for using the credit payment system or based on the outstanding balances owed. Charging fees based on the outstanding balances can tantamount to Riba Nasi’ah. To avoid thisRiba, the Islamic banks have packaged their cards based on certain Islamic ‘transaction principles’. These packages include Charge cards, Qard Al-hasan cards, Bay Al-Inah cards, Tawarruq cards, and Murabahah cards.Some of these packages have become subjects of increasing juristic criticism. I review these packages and conclude that they suffer either from reduced Shari’ah compliance or high price.I propose an alternative package that could minimize the juristic criticisms and improve competitiveness. It extends the Tawarruq package by introducing a buy-and-hold element in the ownership of the underlying asset. It eliminates the need for revolving money credit that can attract interest charges and replaces it with cash reserve and asset holding that the cardholder replenishes as he/she makes repayments into his/her card. 1. Introduction Credit card, which is one of the noncash payment methods, has been growing exponentially.
    [Show full text]
  • Ba Islamic History
    Maharaja’s College, Ernakulam (A Government Autonomous College) Affiliated to Mahatma Gandhi University, Kottayam Under Graduate Programme in Islamic History 2020 Admission Onwards Board of Studies in Islamic History Sl. Name of Member Designation No. 1 Sri. I K Jayadev, Associate Professor Chairman, BoS Islamic History 2 Dr. A B Aliyar External Member 3 Sri. Anil Kumar External Member 4 Dr. Muhammad Riyaz V B External Member [Industry] 5 Sri. K U Bava External Member [Alumni] 6 Sri. Muhammad Ali Jinnah Sahib I Internal Member 7 Dr.Shajila Beevi S Internal Member 8 Dr. Salooja M S Internal Member 9 Sri. Ajmal P A Internal Member 10 Smt. Subida M D Internal Member 11 Smt. Sheeja O Internal Member MAHARAJA'S COLLEGE, ERNAKULAM (A GOVERNMENT AUTONOMOUS COLLEGE) REGULATIONS FOR UNDER GRADUATE PROGRAMMES UNDER CHOICE BASED CREDIT SYSTEM 2020 1. TITLE 1.1. These regulations shall be called “MAHARAJA'S COLLEGE (AUTONOMOUS) REGULATIONS FOR UNDER GRADUATE PROGRAMMESUNDER CHOICE BASED CREDIT SYSTEM 2020” 2. SCOPE 2.1 Applicable to all regular Under Graduate Programmes conducted by the Maharaja's College with effect from 2020 admissions 2.2 Medium of instruction is English except in the case of language courses other than English unless otherwise stated therein. 2.3 The provisions herein supersede all the existing regulations for the undergraduate programmes to the extent herein prescribed. 3. DEFINITIONS 3.1. ‘Academic Week’ is a unit of five working days in which the distribution of work is organized from day one to day five, with five contact hours of one hour duration on each day.
    [Show full text]
  • Resolutions of the Shariah Advisory Council of the SC
    RESOLUTIONS OF THE SHARIAH ADVISORY COUNCIL OF THE SECURITIES COMMISSION MALAYSIA 31 December 2020 Resolutions of the Shariah Advisory Council of the Securities Commission Malaysia Resolutions of the Shariah Advisory Council ii of the Securities Commission Malaysia CONTENTS PART A 2 INTRODUCTION AND OBJECTIVES PART B 3 RESOLUTIONS OF THE SHARIAH ADVISORY COUNCIL OF THE SECURITIES COMMISSION MALAYSIA PRINCIPLES AND CONCEPTS OF MUAMALAT IN THE ISLAMIC CAPITAL MARKET 1. Ta`widh 4 2. Bai` `Inah (i) Implementation of Bai` `Inah 8 (ii) Implementation of Resolution on Bai` `Inah in Sukuk Structuring 12 3. Ibra’ 14 4. Wa`d and Muwa`adah 16 5. Tawarruq 20 6. `Aqd al-Tawrid 21 ISLAMIC CAPITAL MARKET PRODUCTS 7. Nature of Shares 25 8. Crude Palm Kernel Oil Futures Contract (FPKO) 26 9. Single Stock Futures (SSFs) Contract 27 10. Islamic Business Trusts 29 11. Islamic Exchange-Traded Fund Based on Gold and Silver 31 12. Stapled Securities 34 Resolutions of the Shariah Advisory Council iii of the Securities Commission Malaysia 13. Issuance of Redeemable Convertible Unsecured Islamic Debt 35 Securities (RCUIDS) with Free detachable Warrants Based on Shariah Principle of Murabahah (via Tawarruq Arrangement) 14. Islamic Securities Selling and Buying-Negotiated Transaction (iSSB- 39 NT) Model 15. Islamic Real Estate Investment Trusts (Islamic REIT) 40 SHARIAH ISSUES IN RELATION TO THE ISLAMIC CAPITAL MARKET TYPES OF IJARAH 16. Ijarah Mudhafah Ila Mustaqbal 54 17. Ijarah Mawsufah Fi Zimmah 56 18. Ijarah Muntahiyah Bi Tamlik 58 19. Sublease 60 20. Implied Sublease 61 IJARAH ASSET 21. Asset and Usufruct as Mahal al-`Aqd in Ijarah Contract 63 22.
    [Show full text]
  • Qard Hasan, Credit Cards and Islamic Financial Product Structuring: Some Qur'anic and Practical Considerations
    Journal of Islamic Financial Studies ISSN (2469-259X) J. Islam. Fin. Stud. 1, No.1 (Dec-2015) Qard Hasan, Credit Cards and Islamic Financial Product Structuring: Some Qur’anic and Practical Considerations Mohammad Omar Farooq1 and Nedal El Ghattis2 1University of Bahrain, Department of Economics and Finance, Kingdom of Bahrain 2Bahrain Polytechnic, Faculty of Business, Kingdom of Bahrain Received 04 Oct. 2015, Accepted 19 Nov. 2015, Published 1 Dec. 2015 Abstract: For all practical purpose, qard and qard hasan are generally regarded synonymous from orthodox Islamic viewpoint, because, due to the categorical prohibition of riba in the Qur’an, qard (loan) is considered ribawi (subject to the rules pertaining to riba prohibition), and therefore only gratuitous monetary loans – without any benefit to the lender - are considered permissible. The concept of qard hasan has gained new relevance and importance as it is being used to structure Islamic financial products, such as demand deposit products in banks and credit cards. Using qard hasan as the basis for such products leads to some serious anomalies. But more importantly, is the traditional understanding of qard hasan consistent with the Qur’an as well as hadith? What scriptural evidences are there to support the traditional understanding? Also, in light of the impact of credit cards on personal financial health, is the concept ofqard hasan at all compatible with credit cards, and thus, structuring Islamic credit cards? In this paper, we focus on how the Qur’an illuminates this concept of qard hasan and also how it is treated in hadith. While evidence from hadith is looked at, the primary purpose of this paper is to examine the Qur’anic approach to this concept and practical implications for Islamic product structuring.
    [Show full text]
  • Investment Considerations for Takaful Insurance
    Article from Risks & Rewards August 2017 Issue 70 insurance because most of the policyholders of motor will have Investment high frequency, low severity underwriting experience instead of satellite’s low frequency high severity experience. Similarly, it is Considerations for not equitable to have same funds for short-term business and long-term business, and between short-tailed and long-tailed Takaful Islamic Insurance business. Obviously this does not mean that we continue build- ing layers, like an onion, of sub pools over and over; practical By Syed Danish Ali considerations are also important and have to be managed along with fairness and long-term viability of the company. Whole life and endowment coverages are usually frowned upon by Takaful, but that does not mean that they are universal- ly deemed forbidden by all Takaful insurers. Similarly, explicit guarantees of long duration as well as underwriting that starts akaful is Islamic insurance based upon mutual cooper- entering the realm of speculation are avoided. Many safeguards ation between members of a group, who all contribute are also built around consequential losses to ensure that the in- to a pool to indemnify the members against perils and sured does not gain from such uncertainty over future losses Tmisfortunes. This article just begins to scratch the surface to instead of being compensated for losses that have already oc- introduce the main features of Takaful and to engage on com- curred. mon concerns within the actuarial profession. As there are different ways in interpreting the same concepts, There are two main funds in Takaful; the policy holder fund there are different Takaful models and accounting treatments (PTF) and the shareholders’ fund (STF).
    [Show full text]
  • Challenges Facing the Development of Islamic Banking. Lessons from the Kenyan Experience
    View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by International Institute for Science, Technology and Education (IISTE): E-Journals European Journal of Business and Management www.iiste.org ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol.5, No.22, 2013 Challenges Facing the Development of Islamic Banking. Lessons from the Kenyan Experience Shamim Njeri Kinyanjui Jomo Kenyatta University of Agriculture and Technology Abstract The purpose of the study was to investigate the challenges facing the development of Islamic banking in Kenya. The research designed for study was a case study approach focusing on four Islamic compliant banks in Kenya. These are: - First Community Bank; Gulf African Bank; Dubai Bank; Kenya commercial Bank Ltd and Barclays Bank Ltd. The population of the study consisted of 33 customers, who were the holders of accounts in the respective banks and 11 managers. Sample data collected by use of questionnaires administered by the researcher and a research assistant. Data analysis method used is based on the quantitative approach using descriptive statistics: mean, mode, and median. Frequency tabulations and cross tabulations were used to bring out the finding of the study. The study revealed Islamic banking compliant was driven by religious compliance and customers need being met. It also revealed that continuous review and improvement of shariah compliant products together with diversifying market niche will lead to drastic development and marketing of Islamic banking products. From the study the following conclusions were drawn: firstly, the factors that influence development of Islamic banking products in Kenya are purely religious compliance and customers need being met.
    [Show full text]
  • Law and Practice of Modern Islamic Finance in Australia
    LAW AND PRACTICE OF MODERN ISLAMIC FINANCE IN AUSTRALIA by Abu Umar Faruq Ahmad LL M (Honours) - Sydney, Lissans – Medina, MM - Dhaka Thesis submitted in fulfilment of the requirement for the degree of Doctor of Philosophy University of Western Sydney School of Law December, 2007 DEDICATION This dissertation is dedicated to my most beloved parents “Zainab Begum” and “Abu Tahir Muhammad Nazir” (have Allah’s Mercy on their souls and grant them eternal happiness and peace in Paradise), without whose sole contribution I could not achieve anything in my life. ii ACKNOWLEDGEMENTS At the outset, all praise be only to Allah, the Omnipotent to accept this effort and to consider it for His sake only without Whose Grace this work would have not been accomplished. I would like to express my profound thanks to my Principal Supervisor Professor Razeen Sappideen, Foundation Professor of Law and Postgraduate Law Program Head, for patiently supervising the whole of this work and frequently providing constructive suggestions throughout my period of study at the University of Western Sydney from 2004 to 2007. I am deeply grateful to my co-supervisor Dr. A. K. M. Masudul Haque for his invaluable assistance and encouragement. Needless to say, for any error and omission in this study I hold myself fully responsible. I whole heartedly appreciate the staff of the Inter-Library Loan Service of the University library as well as the secretaries of the School of Law who offered much needed support during this lengthy and sometimes difficult project. My heartfelt appreciation is extended to every one else who encouraged and helped me to complete this thesis, especially my oldest brother Professor Dr.
    [Show full text]
  • Reconstructing Entrepreneur's Development Based on Al-Qur'an and Al-Hadith
    International Journal of Business and Social Science Vol. 2 No. 19 [Special Issue - October 2011] Reconstructing Entrepreneur’s Development Based on al-Qur’an And al-Hadith Solahuddin Abdul Hamid Division of Humanities, Collage Arts and Science Universiti Utara Malaysia, Malaysia Associate Professor Dr. Che Zarrina Sa’ari Department of Aqidah and Islamic Thought Academy of Islamic Studies University of Malaya, Malaysia Abstract Islamic economic system is a comprehensive and everlasting field. It includes the whole production, distribution and consumption process according to the rules and principles of Islam that need to be uphold for justice and balance, freedom and benefit, religious duty and life requirements in the world. As such, entrepreneurship which is the pulse to that system is not only an effort to gain profit through expanding capital or means to successful exchange of necessities. In fact, it is a form of social service in building the civilization and future of the society. Thus, through its philosophy and holistic concept, Muslim entrepreneur‟s personality should be based on al-Din that serves as the fundamental interpretation of human‟s behavior as to ensure that changes will not stray them from the teachings of Islam. The personality of Muslim entrepreneur should be different from the western perspective because they not only should possess universal characteristics that across racial, cultural or geographical limitation, but also need to integrate these characteristics with the spiritual elements. Keywords: Islamic economics; Muslim entrepreneur; spiritual elements Introduction The introduction to a person‟s livelihood is usually based on the type of occupation that they do for a living.
    [Show full text]
  • The Potential of Bai Salam in Islamic Social Finance to Achieve United
    International Journal of Management and Applied Research, 2019, Vol. 6, No. 3 The Potential of Bai Salam in Islamic Social Finance to Achieve United Nations’ Sustainable Development Goals Anggi Kusuma Putri Esha tir Razia Aishath Muneeza International Centre for Education in Islamic Finance (INCEIF), Malaysia Abstract Ending poverty is the first of the 17 goals of the 2030 Agenda for Sustainable Development set by the United Nations. The target is to have no more than 3 percent of the world’s population living on just $1.90 a day by 2030. A review on existing literature suggests that the United Nations need a more diverse approach to boost farming and alleviate poverty in order to meet its target. The paper is an effort to explore the possible application of an Islamic banking instrument in meeting the 2030 Agenda for Sustainable Development. This paper aims to explore the feasibility of Salam as an alternative mode of agricultural financing. The concept of the paper can be extended to non-farming industry especially the manufacturing industry. This paper describes the modus operandi of the proposed models, and identifies potential risks involved. Some recommendations are also given as risk mitigation methods. Keywords : Islamic Finance; Poverty Alleviation; Salam; Sustainable Development Goals; United Nations Received: 2 August 2019 ISSN 2056-757X Revised: 8 September 2019 Accepted: 1 October 2019 https://doi.org/10.18646/2056.63.19-010 The Potential of Bai Salam in Islamic Social Finance to Achieve United Nations’ Sustainable Development Goals 1. Introduction According to the United Nation (UN), nearly 10% of the world population live below the international poverty line (USD1.90 per day) and one of out of five children live in extreme poverty (United Nations, n.d.).
    [Show full text]
  • Proposed Secured Bay-Salam Model for Financing Agriculture by Islamic
    International Journal of Management and Applied Research, 2019, Vol. 6, No. 4 Proposed Secured Bay-Salam Model for Financing Agriculture by Islamic Banks Ummi Ibrahim Atah, Mustafa Omar Mohammed, Engku Rabiah Adawiyya, Adewale Abideen Adeyemi International Islamic University Malaysia Abstract Bay Salam is a type of forward contract between two parties to sell or buy a commodity set at agreed terms and conditions on a future date. The Bay Salam contract is beneficial for both buyer and seller because the seller receives full payment in advance while the buyer pays at a favourable price. Despite its benefits to farmers and vendors, this mode of financing is widely available. Therefore, this article aims to explore the concept of the Bay Salam contract and its potential application in financing the agricultural sector in contemporary banking system. This research adopts a qualitative approach by critically reviewing the literature and conducting semi-structured interviews with seven financial and agricultural experts in Nigeria using purposive sampling method. Findings show that Bay Salam is largely unpopular in modern days due to high level of risk and management responsibilities required for the financier. The novelty of this paper lies in the proposed model which combines the concept of Bay Salam and Takaful. Keywords : Bay Salam, Agricultural Insurance, Agriculture Financing, Takaful, Islamic Banks, Islamic Financial Institutions Received: 13 March 2019 ISSN 2056-757X Revised: 10 July2019 Accepted: 30 Sept 2019 https://doi.org/10.18646/2056.64.19-013 Proposed Secured Bay-Salam Model for Financing Agriculture by Islamic Banks 1. Introduction Agriculture is facing various challenges in meeting global demand for food due to growing world population and climate change.
    [Show full text]