The Journal of Muamalat and Islamic Finance Research <h1><img style="display: block; margin-left: auto; margin-right: auto;" src="/public/site/images/iqmal/homepageImage_en_US1.jpg"></h1> <p style="text-align: justify;"><strong><em>The Journal of Muamalat and Islamic Finance Research (JMIFR)</em></strong>&nbsp;is a fully refereed journal published biannually in June and December by the Faculty of Economics and Muamalat (FEM), Universiti Sains Islam Malaysia (USIM). Its main objective is to provide a channel for the publication of articles, research notes, case studies and book reviews in Muamalat, Islamic Economics, Finance, Banking and its related fields. All article will follow a double-blind review by independent consulting editors. Articles are published in&nbsp;English, Malay and&nbsp;Arabic.&nbsp;JMIFR is indexed and abstracted in MyCite, MyJurnal, Index Islamicus, Al-Manhal, Crossref, OCLC WorldCat, Dimensions, ResearchBib, Asian Digital Library, Scientific Indexing Services and Google Scholar.</p> en-US <p>Copyright of the accepted articles will not remain with author(s). Prior to publication of accepted article, author(s) will be asked to assign copyright to the JMIFR. All published articles in the journal are copyrighted to the JMIFR.</p> (Prof. Dato' Dr. Mustafa Mohd Hanefah) (Dr. Supiah Salleh) Fri, 01 Jun 2018 00:00:00 +0000 OJS 60 Investment Account: Issues, Challenges and the Way Forward <p>The current Islamic banking products are merely resembling the conventional products, replacing interest-based to profit based; resulted to different in form but<br>merely similar in substance. In Malaysia, efforts are ongoing for a call to embrace risk sharing as their new source of funds through the Investment Accounts (IA)<br>products offering. This new product offered by Islamic bank with the aims to better position the current Islamic banking practices and promote true equity based financing. Supported by the Bank Negara Malaysia, IA provides a promising avenue with a wider range of risk-return preference for the investor to invest and participate in the real economy activities. However, there is considerable ambiguity in the nature and characteristics of IA in the actual practice of Islamic banks. The paper aims to examine the issues and challenges arising from the use of IA by Islamic banks, and to suggest a solution to the main issues, which will also greatly reduce other challenges faced.</p> Syaima' Adznan ##submission.copyrightStatement## Fri, 01 Jun 2018 00:00:00 +0000 Determinants of Corporate Risk Disclosure Practice: The Case of Islamic Banks in Gulf Cooperation Council Region <p>The paper develops a framework to explore the risk disclosure practices of 29 Islamic banks operating in the Gulf Cooperation Council countries over the period of 2013-2016 and examines the potential factors which might be affecting risk disclosure. To analyze the level of risk disclosure, the paper develops a composite index by using the content analysis technique. We also employ OLS technique to examine factors affecting Islamic banks’ risk disclosure. The results indicate a very high difference in risk disclosure between countries. Only two countries, the United Arab Emirates and Bahrain, have a higher level of risk disclosure. The findings also suggest that reporting on some risk disclosure types especially displaced commercial risk and rate of return risk is very low. The regression results show that Islamic banks with a stronger set of corporate governance mechanisms and an active Shariah board appear to disclose more risk information. Other factors that influence risk disclosure practices of Islamic banks are bank&nbsp;size, leverage, cross-border listings and the level of political and civil regression. The study recommends that Islamic banks have to revise their communication strategies and provide more risk information related to rate of return risk and display commercial risk. In addition, GCC regulators should establish risk disclosure regulations which have to become mandatory for all Islamic banks. To the best of our knowledge, the paper provides the first analysis related to the determinants of corporate risk disclosures of Islamic banks in the Arab Gulf region.</p> Samir Srairi ##submission.copyrightStatement## Fri, 01 Jun 2018 00:00:00 +0000 Financial Inclusiveness in Islamic Banking in Pakistan: A Comparison of Ideas and Practices <p>This study attempts to document the progress in Islamic banking industry of Pakistan towards fostering an egalitarian and equitable financial intermediation. It<br>evaluates the progress of Islamic banking in enhancing socio-economic mobility, financial inclusiveness and fostering equitable distribution of income. This study uses a set of quantitative indicators to objectively assess the performance of Islamic banks towards fostering a participative, inclusive, cost-effective and real sector oriented financial intermediation. The results highlight that currently, the performance of Islamic banks on these fronts leaves much to be desired. This study highlights that high average cost of financing and limited focus on agriculture and small and medium enterprises requires improvement to achieve the goal of circulation of wealth and equitable distribution of income. It also identifies that various categories of poor people who need finance for their health, education and small business working capital needs cannot be served by Islamic banks by using the available product structures. This study gives a geographical presence of Islamic banks which shows that they are mainly based in big urban cities. It argues that most of the Islamic banking debt-based products are close, but relatively expensive substitutes. The study will help the industry to review its performance in contributing towards financial inclusiveness, social mobility, need fulfillment and equitable income distribution.</p> Salman Ahmed Shaikh ##submission.copyrightStatement## Fri, 01 Jun 2018 00:00:00 +0000 Strategic Role of Zakat in Multidimensional Quality of Life in Sijunjung, Indonesia <p>Zakat is one of the five pillars of Islam which has a function of faith, social and economic functions. Muslims who can pay zakat are required to give at least 2.5 per cent of their wealth. The problem of poverty prevalent in disadvantaged regions because of the difficulty of access to information and communication led to a gap that is so high in wealth and resources. The instrument of zakat provides a paradigm in the achievement of equitable wealth distribution and healthy<br>circulation. Zakat potentially offers a better life and improves the quality of human being. There is a human quality improvement not only in economic terms but<br>also in spiritual terms such as improving religiousity. This study aims to examine the role of zakat to alleviate humanitarian issues in disadvantaged regions such as Sijunjung, one of zakat beneficiaries and impoverished areas in Indonesia. The researcher attempted a Cibest method to capture the impact of zakat beneficiaries before and after becoming a member of Zakat Community Development (ZCD) Program in material and spiritual value. The overall analysis shows that zakat has a positive impact on disadvantaged regions development and enhance the quality of life of the community. There is an improvement in the average of mustahik household incomes after becoming a member of ZCD Program. Cibest model demonstrates that material, spiritual, and absolute poverty index decreased by 10, 5, and 6 per cent. Meanwhile, the welfare index is increased by 21 per cent. These findings have significant implications for developing the quality of life in disadvantaged regions in Sijunjung. Therefore, zakat is one of the instruments to change the status of disadvantaged areas to be equivalent to other areas.</p> Herlin Hamimi, Abdul Ghafar Ismail, Muhammad Hasbi Zaenal ##submission.copyrightStatement## Fri, 01 Jun 2018 00:00:00 +0000 Determinant Factors of Student's Perception Toward Educational Loan Repayment <p>The issue of unpayable educational loan that lead to student’s defaults has become a worrying trend all over the world. This research aims to examine the<br>relationship of anxiety, parental influence, media awareness, and religiosity on student’s perception on educational loan repayment. A survey approach has been adopted to investigate student’s perception on educational loan repayment in Universiti Utara Malaysia. The data for this study were collected via structured questionnaires which were completed by 359 undergraduate Muslim’s students who acquire their financial loan from National Higher Education Fund Corporation (NHEFC). The data were then quantitatively analyzed using SPSS program. The findings of Pearson’s correlation showed a positive correlation between student’s perception towards educational loan repayment and religiosity, parental influence, media awareness, and anxiety. Further analysis using a multiple regression indicated that all independent variables explained 32.9 per cent of student’s perception on educational loan repayment. The result again indicated that religiosity and parent’s influence are most influential factors on student’s perception towards educational loan repayment. Whilst, media awareness slightly contributed to student’s perception towards educational loan repayment and anxiety gave no impact. The result implied that the Ministry of<br>Education may design the syllabus in school and university curricular by adding the value of responsibility in loan repayment especially in religious and moral subjects. Besides, the Ministry Education of Malaysia are also urged to use media to disseminate the information regarding the importance for students to make loan repayment to parents as well as students. The collection of student loan then can be used for the next generation in financing their study which could result the prosperity of nation.</p> Siti Zulaika Zolkeplee, Abu Bakar Hamed, Ahamad Faosiy Ogunbado ##submission.copyrightStatement## Fri, 01 Jun 2018 00:00:00 +0000 Analisis Polisi Luput Pelan Takaful Keluarga <p>This study aims to analyze the determinants of policy lapse of family’s takaful in Malaysia by examining the demographic characteristics of policyholders and the<br>family takaful policy itself. The policy could lapse due to several reasons such as failing to make payment within the prescribed period, converting to a better policy, financial pressure and voluntary surrender. The policy lapse has a huge impact on stakeholders such as takaful operators, customers and policy makers. The impact of policy lapse includes losses to firms, adverse selection, liquidity and contribution increament. The results of the logistic regression analysis show that the sum insured, payment methods&nbsp;and gender have a negative impact on policy lapse. Wheares age, marital status and&nbsp;the insured individual have no effect on policy lapse. The findings assist stakeholders such as takaful operators and regulators to develop appropriate strategies to achieve their goals and support the development of the takaful industry in Malaysia.</p> Rubayah Yaakob, Mohd Hafizuddin Syah Baangan Abdullah, Norasykeen Mohd Baharom ##submission.copyrightStatement## Fri, 01 Jun 2018 00:00:00 +0000 Tinjauan Persepsi Majlis Agama Islam Negeri Terhadap Peruntukan Kerajaan Persekutuan Bagi Pembangunan Tanah Wakaf <p>The willingness of the Federal Government to fund waqf development in the Ninth Malaysia Plan (9MP) has greatly influenced the awareness and efforts to transform the waqf institution in Malaysia. However, a drastic reform was introduced during the Tenth Malaysia Plan (10MP) in line with the government’s transformation efforts has resulted in the application process for the development allocation becomes more difficult to be granted. This has led the State Islamic Religious Councils (MAINs) to no longer apply the budget from the Federal Government. Under this circumstance, this study has established the objective of reviewing MAINs’ perceptions on changes in development provisions implemented by the government. The method used for the study is a combination of document analysis and face-to-face interviews. This study uses content analysis as a method of analysis. The findings show that MAINs has the difficulty to meet all the requirements of the application due to several reasons. Consequently, MAINs has no longer to rely on the Federal Government to get the waqf land development fund and has to explore other suitable financing methods for its development projects.&nbsp;</p> Ahmad Shazrin Mohamed Azmi, Noor Rosly Hanif, Siti Mashitoh Mahamood ##submission.copyrightStatement## Fri, 01 Jun 2018 00:00:00 +0000