Islamic Financing as Mechanism for Socio-Economic Development: A Conceptual Approach

Kamoru Mutiu Olaide; Ibraheem Alani AbdulKareem

doi:10.37231/jmtp.2021.2.1.96

Kamoru Mutiu Olaide School of Education and Modern Languages (SEML). College of Arts and Sciences, Universiti Utara Malaysia.06010. Sintok Kedah. Malaysia
Ibraheem Alani AbdulKareem Faculty of Business and Management, Universiti Sultan Zainal Abidin (UniSZA), 23100, Gong Badak, Terengganu, Malaysia

DOI: https://doi.org/10.37231/jmtp.2021.2.1.96

Keywords: Islamic finance; Poverty; Lack of shelter; Illiteracy and Socio-economic development

Abstract

This study has critically reviewed both empirical and theoretical literature and the importance of Sukuk being an Islamic finance mechanism as a major player to solve socio-economic problems and human development in general. It is observed that Islamic finance products, especially Sukuk have gained prominence across the globe. Considering part of its importance to human life, previous studies have established that it is working successfully in several countries through the adoption of Sukuk to tackle socio-economic vices such as the alleviation of poverty, lack of shelter, illiteracy that in the long-run has positive impacts on the small and medium enterprise; economic; rural and sustainable development. Given this, the study focuses on the effectiveness of the concept of Sukuk as a mechanism to solve socio-economic vices listed above. As earlier mentioned, the Islamic finance market is succeeding with its approach in a comprehensive manner towards empowering people and their wellbeing. In support of this, the proceed generated from Sukuk investments can be used by investors to improve the education of their wards and personal health condition. The outcome of this study revealed that Islamic finance products, bearing Sukuk in mind is capable of solving socio-economics vices facing the world.

Downloads

Download data is not yet available.

References

AAOIFI, (2008). Sukuk pronouncement. www.aaoifi.com.

AbdulKareem, I. A., AbdulGaniyy, A., Mahmud, M. S., & Yazid, A. S. (2020). Alternative Way to Reducing Poverty and Inequality in Nigeria from Islamic Perspective. Journal of Islamic Banking and Finance, 37(2), 73-83.

AbdulKareem, I. A., Mahmud, M. S., & AbdulGaniyy, A. (2020). Thematic Review of Sukuk Ijarah Issued in Nigeria: An Opportunity for Economic Development. Jurnal Iqtisaduna, 1(1), 61-80.

AbdulKareem, I. A., Mahmud, M. S., AbdulGaniyy, A. & Yazid, A. S. (2020). Shariah Issues in the Application of Repurchase Undertaking in Sukuk Mudarabah. International Journal of Business and Technopreneurship, 10(2), 173-182.

AbdulKareem, I. A., & Mahmud, M. S. B. (2019). Infrastructure Project Financing Through Sukuk as an Alternative to Conventional Bond Financing. Journal of management and operation research, 1(19), 1-11.

Ahmad, M. (2015). Role of Waqf in sustainable economic development and poverty alleviation: Bangladesh perspective. Journal of Law, Policy and Globalization, 42(2), 118-130.

Ali, M., Oravampurath, H. B., & Ziyaad, M. (2020). Social impact Sukuk for migrants: an innovative solution. In Handbook of Research on Theory and Practice of Global Islamic Finance (752-769). IGI Global.

Amaliah, I., & Aspiranti, T. (2017). State Sukuk potential in reducing Indonesia budget deficit, 2009-2015. Journal of Economics, Business & Accountancy Ventura, 20(1), 21-30. https://doi.org/10.14414/jebav.v20i1.

Asutay, M., & Hakim, A. (2018). Exploring international economic integration through Sukuk market connectivity: A network perspective. Research in International Business and Finance, 46, 77-94. https://doi.org/10.1016/j.ribaf.2017.10.003

Ayyoub, M., & Gillani, D. Q. (2017). Role of Socioeconomic Factors in Poverty Alleviation: An Assessment of Urban Informal Sector. Kashmir Economic Review, 26(1), 28-40.

Bashir, A. H., (2018). Reducing Poverty and Income Inequalities: Current Approaches and Islamic Perspective. Journal of King Abdulaziz University: Islamic Economics, 31(1), 93-104. https://doi.org/10.4197/Islec 31-1.5

Bhatia, Sugan. (2013). Literacy and Adult Education in Independent India. New Delhi. India: Sonali Publications.

Barley, S. R., Bechky, B. A., & Milliken, F. J. (2017). The changing nature of work: Careers, identities, and work lives in the 21st century.

Brown, Valerie J. (2003). Give Me Shelter: The Global Housing Crisis – Focus: Environmental Health Perspective – Comments. Health publications. Retrieved 13 December 2020 from http://findarticles.com/p/articles/mi_mOCYP/is_2_111/ai_99185877/.

Bin Syed Azman, S. M. M., & Ali, E. R. A. E. (2016). Potential role of social impact bond and socially responsible investment Sukuk as financial tools that can help address issues of poverty and socio-economic insecurity. Intellectual Discourse, special issue. 24, 343-364.

Chamberlain, M. (2013). Socially responsible investing: What you need to know. Retrieved from forbes. com.

Chaurasia, P., Priya, P. & Agrawal, N. (2019). “Illiteracy – A social Issue” A brief study in the Indian population. International Journal of Engineering and Technical Research (IJETR), 9(4), 2454-4698.

Chimenya, A., & Qi, B. (2015). Investigating determinants of brain drain of health care professionals in developing countries: A review. Net Journal of Business Management, 3(2), 27-35.

Ekperiware, M. C., Olatayo, T. O., & Egbetokun, A. A. (2017). Human capital and sustainable development in Nigeria: How can economic growth suffice environmental degradation? (No. 2017-29). Economics Discussion Papers.

Fritz, J. M. (2010). Socioeconomic developmental social work. Peace Studies, Public Policy and Global Security, 7, 362.

Jones, P. W. (2018). International policies for Third World education: UNESCO, literacy and development. Routledge.

Hasan, Z. B. (2016), "From Legalism to Value-oriented Islamic Finance Practices", Humanomics,32,(4).

Hassan, M. K., Kayed, R.N., & Oseni U.A. (2013) Introduction to Islamic banking and finance, principles and practice. London: Pearson Education Limited.

Hasan, Z. (2011). Islamic home finance in the social mirror. ISRA International Journal of Islamic Finance, 3(1), 7-24.

Harman, D. (1970). Illiteracy: an overview. Harvard Educational Review, 40(2), 226-243.

Irfan, M. (2020). A Meta-Analysis of Islamic Microfinance: Case Based Evidence from India. Journal of Islamic Monetary Economics and Finance, 6(1), 21-50.

Islahi, A. A. (2003). Waqf: A Bibliography. Islamic Economic Research Centre King Abdul Aziz University.

Kapur, R. (2018). Socio-Economic Development and Empowerment of Disadvantaged Groups.

Kassim, S., & Abdullah, A. (2017). Pushing the frontiers of Islamic finance through socially responsible investment Sukuk. Al-Shajarah: Journal of the International Institute of Islamic Thought and Civilization (ISTAC), 187-213.

Musari, K. (2016). Waqf-Sukuk, Enhancing the Islamic Finance For Economic Sustainability in Higher Education Institutions. Papers World Islamic Countries University Leaders Summit (WICULS).

Mohsin, M. I. A., Dafterdar, H., Cizakca, M., Alhabshi, S. O., Razak, S. H. A., Sadr, S. K., ... & Obaidullah, M. (2016). Financing the development of old Waqf properties. New York: Palgrave Macmillan

Ogunbado, A. F. (2019). Infrasturactural Development in Organisation of Islamic Cooperation (OIC) Member Countries: Sukuk Mode Financing as an Alternative. Abqari Journal, 36-48.

Omar, M. A, Abduh M. & Sukmana, R. (2015). Fundamentals of Islamic money and capital markets. Singapore: John Wiley & Sons Singapore Ptc Ltd.

Razak, S. S., Saiti, B., & Dinç, Y. (2019). The contracts, structures and pricing mechanisms of Sukuk: A critical assessment. Borsa istanbul review, 19, S21-S33.

Requena, F. (2016). Rural–urban living and level of economic development as factors in subjective well-being. Social Indicators Research, 128(2), 693-708.

Retsikas, K. (2014). Reconceptualising zakat in Indonesia: Worship, philanthropy and rights. Indonesia and the Malay World, 42(124), 337-357.

Richmond, M., Robinson, C., Sachs-Israel, M., & Sector, E. (2008). The global literacy challenge. Paris: UNESCO. Retrieved on 16th December 2020 from file:///C:/Users/Kamoru/Downloads/163170eng.pdf

Sachs, J. D., & McArthur, J. W. (2005). The millennium project: a plan for meeting the millennium development goals. The Lancet, 365(9456), 347-353.

Securities Commission Malaysia. (2004). Guidelines on the offering of Islamic Securities. Kuala Lumpur: Securities Commission. 5(3) 49-62.

Shinkafi, A. A., Yahaya, S., & Sani, T. A. (2019). Realising financial inclusion in Islamic finance. Journal of Islamic Marketing, 11 (1), 143-160. https://doi.org/10.1108/JIMA-02-2017-0020.

Sulaiman, M., Adnan, M. A., Nor, P. N. S. M. M., & Suad, P. N. (2009). Trust me! A case study of the International Islamic University Malaysia’s waqf fund. Review of Islamic Economics, 13(1), 69-88.

World Bank (2011). Migration and Remittances Factbook, 2nd Edition, Washington, D.C, The World Bank.