DETERMINANTS OF FINANCIAL RESOURCES MOBILISATION OF INTEREST-FREE COOPERATIVE SOCIETIES IN ILORIN, KWARA STATE, NIGERIA

Interest-free Cooperative society is introduced as a mirror of conventional cooperatives though on the principle of Islamic finance, to mobilise financial resources with the aim of promoting the socio-economic welfare of their members. There is however some restriction to the quantity of savings that could be mobilized. The study therefore assessed the determinants of savings mobilization in interest-free cooperative in Ilorin Kwara State. Data were collected with the use of questionnaire which was administered on 365 members of institution-based interest-free cooperative societies in Ilorin metropolis. Kaiser-Meyer-Olkin (KMO) and Cronbach’s alpha tests were performed to establish the validity and reliability of the research instrument. Logistic regression analysis was conducted and it was found that mode of saving, credit administration, internal governance and member’s awareness have positive effect on volume of savings mobilized and the effects are significant at 5% and 1% level of significance. The study concluded that the mode of savings, credit administration, internal governance, and members awareness affect resources mobilization of Islamic cooperatives in Ilorin metropolis. Direct deduction of savings from salaries, higher level of transparency and accountability, sensitization campaign are recommended for effective and efficient financial resources mobilization in interest-free cooperative societies.

HOW SOCIAL ARE ISLAMIC BANKS IN PAKISTAN?

Purpose: This research paper attempts to prove that social outcomes are one of the objectives of Islamic banks and tries to investigate whether social failure exists in the Islamic banking sector of Pakistan by assessing the social performance of Islamic banks against performance indicators of social outcomes. Design/ Methodology/ Approach: In this paper content analysis of annual reports of a sample of 4 Islamic conventional banks and 4 Islamic banking units functioning in Pakistan is conducted. The social outcomes that are attempted to be measured of the Islamic banks in this research paper are derived from social objectives present in literature, in addition to this, Kinder, Lydenberg, Domini Research, 17 Sustainable Development goals of the United Nations, five Environment Social Governance scorecards developed by Oikocredit which is a global cooperative and social investor group, and Analytics index of corporate social performance are used for the derivation of social outcomes. Findings: Conventional Islamic banks in Pakistan are doing better than Islamic banking units on measures of social responsiveness. Originality/ Value: This research paper is based on the framework of the research paper “How social is Islamic banking” written on the Islamic banking sector of Indonesia by Luthfi Hamidi and Andrew C. Worthington. JEL Classification Codes: G0, G2, P4, Q3.

THE INFLUENCE OF ISLAMIC LEADERSHIP AND ISLAMIC WORK ETHICS ON EMPLOYEE PERFORMANCE OF ISLAMIC BANKS IN RIAU PROVINCE MEDIATED BY ISLAMIC ORGANIZATIONAL CULTURE

The purpose of this research is to examine the effect of Islamic leadership and Islamic work ethics on employee performance of Islamic banks in Riau province, whereby Islamic organizational culture became the mediator variable. This research employs the Structure Equation Model (SEM) based on Partial Least Square (PLS) with the help of SmartPLS 3.0 M3 software. The data were collected by using a questionnaire from 275 respondents. The respondent in this research was an employee of Islamic banks in Riau Province. The result showed that Islamic leadership, Islamic work ethics, and Islamic organizational culture positively and significantly influence on employee performance of Islamic banks in Riau province. On another side, the Islamic leadership mediated by Islamic organizational culture does not significantly influence on employee performance of Islamic Banks in Riau Provence. The finding of this research suggests that to enhance the role of Islamic leadership to create Islamic organization culture and Islamic work ethics increasingly would be an effect on employee performance of Islamic Bank in Riau province. JEL Classification Codes : M1, G21, M540.

GLOBAL FINANCIAL CRISIS: AN ISLAMIC MANAGEMENT APPROACH

The purpose of this study is to determine the solutions to financial crises based on the perspective of Islamic management. It also discusses the roles of faith and Islamic monotheism in managing the global financial crisis. The qualitative method was used to obtain data from books and articles related to Islamic management based on Qur’an and Hadith. These data were further analyzed and used as a solution to problems related to the global financial crisis by Islamic values. The result showed that the values of faith and monotheism following organizational policy and management tend to minimize financial speculative actions and greed. In addition, these values assist managers in planning, organizing, directing, and supervising their subordinates under Islamic rules and regulations. The application of this value is mainly reflected in the aspects of behavior, organizational aspects, and system aspects through the mechanism of placing the sharia supervisory board and profit-sharing in Islamic financial institutions, simplicity, and avoiding is in organizational management as well as the principle of prudence and avoiding speculative action. This research supports the role of the Islamic management system in winning finances and implementing organizational policies to overcome global financial problems. JELClassification Codes: G01, H12, D46.

Islamic Bank Safety Net Issues: The Regulatory Challenges for Cross Border Islamic Banking Transactions

This paper aims to identify major regulatory challenges in the safety net for providing insurances to the depositors in the cross-border transaction over the world. The study found that Islamic banking is facing major challenges to issue appropriate rules and regulations for providing the right safety against the deposit of customers with a conventional counterpart base on the Islamic shariah principles. Especially in the area of “chartering or licensing function, prudential regulation and supervision, deposits in the central bank, intervention and resolution mechanisms and capital adequacy standard” for safety net issues of Islamic Bank. The study recommended that the policymakers need to pay heed in a deliberate and intentional way to solve the above regulatory issues to face the existing challenges for the smooth operation and bright prospect of the Islamic Banking sector in the future. JEL Classification Codes: G21, G24, L26, P51.

Morocco's Participative Banking Sector: A Cross-Analysis of Current State, Opportunities and Challenges of Its Five Banks and Three Windows

Launched two and a half years ago, the model of Islamic banking adopted by Morocco consists of five banks and three windows. This paper aims to present an exploratory case study of the performance of the eight actors of Morocco participative banking. The study reveals an increase of Murabaha funding and deposits while the total net profit remains negative (MAD -420 million) mainly due to the start-up costs absorbing an enormous amount of resources. Presented in a SWOT Analysis, the study’s results confirm that the sector is facing many difficulties and gaps that negatively affect the business especially the incomplete participative financial ecosystem. Then, the paper presents a benchmark study of Turkey’s participation in banking. Findings show that the financial ecosystem in Turkey is much more developed compared to Morocco. Consequently, this situation favored the rise of the five operational participation banks whose asset growth rate reached 99%, between 2014 and 2018, and recorded positive net profits which exceeded TL 2 billion. Nevertheless, both Morocco and Turkey participation banks are still too young and can make headway only if the regulators and the operators properly address the challenges which hamper their development. JEL Classification: G21, 057.

Workforce Management Based On Charity in Muslim Organizations

Islamic literature highlights eight major functions of Islamic HRM; namely HR planning, recruitment, selection, orientation, performance appraisal, training and development, compensations and benefits, and career development. The objective of this paper is to consider the Divine Science of Charity as it applies to organizations as a form of workforce management. Firstly, in order to properly apply the divine laws of charity in any hierarchy, every employee should be allocated to a position correlating to their skill level. In addition, if everyone in the company is willing to please Allah (SWT) by helping personnel under supervision (muʿāmalāt), it will result in minimum friction between employees, meanwhile boosting the morale and engagement of all personnel. This will result in the maximized efficiency of the workflow at each level of the organization. Moreover, the reward for charity–leaders is happiness, which will allow them to create an enjoyable environment in the workplace. For the 2nd divine law of charity, each member of the company will be able to self-purify their soul and add the workflow as good deeds in the Eternal Path of Charity.

The Extent of the Commitment of Islamic Banks Operating in the City of Hebron to Disclose Social Responsibility in the Published Financial Statements

The research aimed to identify the extent of the commitment of Islamic banks in the city of Hebron to disclose social responsibility in the published financial statements, where a questionnaire was designed to answer the study questions. The questionnaires were distributed to all workers in Islamic banks operating in the city of Hebron, and the study concluded that the extent of The commitment of Islamic banks to disclose social responsibility in the financial data published in the city of Hebron was a high degree within its social responsibility, and the results also showed that there are obstacles when Islamic banks in the city of Hebron disclosed their activities in the areas of social responsibility, and the researchers have recommended the necessity of providing training courses for workers In Islamic banks, to introduce them to the strategy of disclosing social responsibility and its importance, as one of the strategies that contribute to achieving excellence in performance in general, and the need for the Monetary Authority to issue special legislation, related to the adoption of Islamic banks to disclose their commitment to social responsibilities due to its implications for the performance of society.

Managing the Agricultural Sector Through Muzara’ah: Implementing an Islamic Economic Participatory Mode of Financing

The tremendous growth of Islamic banking has transformed a relatively new industry into a robust and widespread reality on the ground. Several Islamic financial institutions (IFIs) operate in different countries of the world and several Islamic modes of financing have been developed; however, most cater to the needs of commercial businesses, and personal finance. Few IFI products have been made available to support the agricultural sector. One rarely used product is Salam (a kind of sale in which farmers sell their product in advance, before the season’s harvest, to get funding for farming inputs as well as for their livelihood expenses), which, however, is of limited use due to a range of limitations. Hence, there remains a need for a product which is shari’a compliant and acceptable to IFIs as well as the end users, that is, the farmers. This paper proposes an Islamic model suitable for entrepreneurs, farmers and IFIs. A mixed-methods research methodology is applied: while the study is mainly qualitative, a quantitative approach was applied to the data obtained through questionnaires. The general finding of this paper is that there is a need to have a shari’a-compliant financing model to be based on a participatory basis, in place of the debt-based modes which are currently in extensive use by IFIs. Therefore, I selected the Muzara’ah (sharecropping) concept as the basis of a model to help the agricultural economy and the Islamic banking industry. The reason for choosing the participatory over the debt-based mode is that the latter cannot bring about any real change, as I shall demonstrate from the particular perspective of Pakistan. Research into the demography of the Pakistani agricultural sector, on the other hand, demonstrates that the Muzara’ah model can be used anywhere in the world. The paper also aims to understand the effects on this sector of the use of financing by both commercial and Islamic banks, the strengths and weaknesses of financial intermediation, and the challenges faced by Islamic banks as concerns financing the agricultural sector. This research paper is divided into four sections. The first introduces and debates the position of agriculture in Pakistan; the ways in which commercial banks extend loans to this sector, and the socio-economic effects of such loans; and the different existing financing models being used for this sector and their respective drawbacks. The section also presents a brief discussion of Islamic banking and its advantages; different Islamic modes of financing; and how Islamic banks are supporting the agricultural sector in Pakistan. Furthermore, it argues that there is a global need for an alternative Islamic model to finance the agricultural sector, and that this need is particularly pressing in Pakistan. The second section discusses the Muzara’ah model, through an extensive review of the extant Islamic literature, encompassing, but not limited to, the definition of Muzara’ah, the Islamic basis for the practice and Islamic juristic views, as well as how Muzara’ah worked in a previous age. Moreover, this section discusses the similarities and differences in opinion among Islamic jurists (experts in Islamic law) about the validity of Muzara’ah. The focus of this section is on finding a consensus as to the most common and viable mode of Muzara’ah which is acceptable to a majority of jurists.The third section surveys agriculture in Pakistan, as well as the opinions and perspectives of farmers, bankers and other stakeholders to inform the proper development of an Islamic Muzara’ah sharecropping model. Practical research was carried out in Kohat, one of the cities of Pakistan, which is famous for its guava, wheat and maize production. A description of the fieldwork is also presented in this section.The fourth section draws on all the above information to develop a model based on the concept of Muzara’ah which can be feasibly implemented in the Islamic banking industry. Moreover, it presents a discussion of the strengths and weaknesses of the model and provides suggestions and recommendations about how it should be rolled out. The needs of end users, such as farmers and growers, are addressed, and a discussion is presented of how the product better meets their needs than the other products which are currently available to them.