nep-isf New Economics Papers
on Islamic Finance
Issue of 2020‒01‒20
sixteen papers chosen by



  1. An Estimation of Market Size for Microfinance: Study on the Urban Microentrepreneurs in Selangor, Malaysia By Hassan, Salwana; Alam, Md. Mahmudul; Rahman3, Rashidah Abdul
  2. Performance of Islamic microcredit in perspective of Maqasid Al-Shariah: case study on Amanah Ikhtiar Malaysia By Said, Jamaliah; Hassan, Salwana; Alam, Md. Mahmudul
  3. Jurisprudential Schizophrenia: On Form and Function in Islamic Finance By Shephard, Karen; Hamoudi, Haider Ala
  4. Muhammad's Social Justice or Muslim Cant?: Langdellianism and the Failures of Islamic Finance By Shephard, Karen; Hamoudi, Haider Ala
  5. The Impossible, Highly Desired Islamic Bank By Shephard, Karen; Hamoudi, Haider Ala
  6. Pergulatan Asuransi Syariah di Indonesia By Nizar, Muhammad Afdi
  7. You Say You Want a Revolution: Interpretive Communities and the Origins of Islamic Finance By Shephard, Karen; Hamoudi, Haider Ala
  8. Social Collateral Model for Islamic Microfinance By Kamaluddin, Amrizah; Hadi, Nabawiyah Abdul; Alam, Md. Mahmudul; Adil, Mohamed Azam Mohamed
  9. Present at the Resurrection: Islamic Finance and Islamic Law By Shephard, Karen; Hamoudi, Haider Ala
  10. HOW FAITH BASED ORGANIZATIONS CONTRIBUTE OR HINDER DEVELOPMENT IN PAKISTAN ? THE CASE OF AL-KHIDMAT FOUNDATION By Shafaat Saleem
  11. Rationality of the Capital Market: Capitalistic System vs. Islamic System By Alam, Md. Mahmudul; Akbar, Chowdhury Shahed
  12. Baghdad Booksellers, Basra Carpet Merchants, and the Law of God and Man: Legal Pluralism and the Contemporary Muslim Experience By Shephard, Karen; Hamoudi, Haider Ala
  13. A Reflection on Economics of Microcredit Borrowing in Rural Bangladesh By Molla, Rafiqul Islam; Alam, Md. Mahmudul
  14. FIQH AS A SOURCE OF CONTEMPORARY LAW IN ARAB COUNTRIES By Leonid R. Sykiainen
  15. Examining Donor Preference for Charity Religious Affiliation By Jonathan Oxley
  16. Islamic and Social Entrepreneurships for Social Justice: A Policy and Structural Framework for Social Enterprise Economics By Molla, Rafiqul Islam; Alam, Md. Mahmudul; Bashar, M. A.; Alam, A. S .A. Ferdous

  1. By: Hassan, Salwana; Alam, Md. Mahmudul (Universiti Utara Malaysia); Rahman3, Rashidah Abdul
    Abstract: Malaysia is a fast growing developing country where majority of the people are Muslim. Due to the religious bindings, Muslim prefers Shariahcompliant Islamic credits instead of conventional interest based credits. At the same time, non-Muslims can also consider Shariahcompliant Islamic credit because it is considered as the ethical credit. However, still many microentrepreneurs are not receiving the Shariahcompliant Islamic microfinance products because they have negative perceptions about the credit andinterest (riba). Therefore, this study aims to assess the demand for microfinance among the microentrepreneurs in the State of Selangor, Malaysia and thus, determine the potential market size. Data of the study were collected based on a questionnaire survey from 550 microentrepreneurs from the urban areas of Selangor. It was found that only 12.2 per cent of them received microfinance from various microfinance institutions and banks. However, the study found that still there is potential for microfinance borrowing with around 55,000-128,000 microenterprises in Selangor, Malaysia. Therefore, Islamic microfinance institutions should try to expand their market size by promoting these potential microfinance borrowers among the existing microentrepreneurs.
    Date: 2019–02–28
    URL: http://d.repec.org/n?u=RePEc:osf:socarx:bkmc6&r=all
  2. By: Said, Jamaliah; Hassan, Salwana; Alam, Md. Mahmudul (Universiti Utara Malaysia)
    Abstract: Many studies have evaluated the role of microcredit programs using the conventional assessment approach. However, the conventional system of socioeconomic role assessment cannot evaluate the performance of Islamic microcredit in terms of achieving the objectives of Shariah for the Islamic microcredit model. Therefore, this study examines the role of Islamic microcredit based on the achievement of Maqasid Al-Shariah. It uses primary data that were collected through a questionnaire survey distributed among 393 microcredit borrowers from Amanah Ikhtiar Malaysia (AIM). The survey was conducted from July 2013 to December 2013 in the State of Sabah and in Peninsular Malaysia. This research also analyzes the socioeconomic roles and the achievement of microcredit and microenterprise from the perspective of the five principles of Al-daruriyyat from Maqasid Al-Shariah. Results indicate that the microcredit program of AIM has a positive and enhancing effect on the livelihood of clients. This effect is reflected in the assessment of their well-being, especially in the context of Maqasid Al-Shariah.
    Date: 2019–02–28
    URL: http://d.repec.org/n?u=RePEc:osf:socarx:ay6bf&r=all
  3. By: Shephard, Karen; Hamoudi, Haider Ala
    Abstract: 7 Chicago Journal of International Law 605 (2007)Despite its explosive growth over the past several decades, Islamic finance continues to have trouble attracting large numbers of otherwise pious Muslims as potential investors. The underlying reason for this is that the means that the practice employs to circumvent some of the central Muslim bans relating to finance (most notably, the ban on interest) are entirely formal in their structure and are equivalent to conventional structures both legally and economically. However, the practice purports to serve functional ends; namely, through offering Muslims alternative means of finance that are intended to further Islamic ideals of fairness and social justice. This has resulted in schizophrenia within Islamic finance, with proponents and practitioners creating formalisms to comply with Shari'a while continuing to insist that Islamic finance has a functional purpose that cannot sensibly be ascribed to it given its current structure. Either Islamic finance needs to describe itself as nothing more or less than the mere conformity with doctrine in a manner that does not serve any functional purpose at all, or, given the interest of the Muslim community in social justice in economic affairs, the practice needs to reinvent itself, focusing less on mimicking conventional alternatives and more on achieving at least to some degree the ends of social justice and fairness it endlessly promotes.
    Date: 2018–09–18
    URL: http://d.repec.org/n?u=RePEc:osf:lawarx:aqrsy&r=all
  4. By: Shephard, Karen; Hamoudi, Haider Ala
    Abstract: "40 Cornell International Law Journal 89 (2007)Though it is advertised and promoted as the bulwark of an alternative economic system based on populist Muslim notions of social justice and fairness, Islamic finance as a practice has failed to meet these objectives. The causes of that failure and the question of whether alternative approaches are possible are the subject of this Article. The failure of Islamic finance to provide that which it promotes is the direct consequence of the application of an Islamic logic driven interpretive system through which rules are derived, which its adherents claim was formalized and systematized by the early jurist Muhammad Ibn Idris Al-Shafi'i. The system bears remarkable resemblance to the jurisprudential theories of Christopher Columbus Langdell in that particular cases (the reports of Muhammad, or hadith) are selected and then expanded into fundamental principles, or at least fundamental rules, through a doctrine known as qiyas, or analogical reasoning. The result is a financial system characterized by an incoherent web of rules, convenient and specific blindness respecting those rules in particular contexts, and deceptive and obfuscatory measures intended to lend the entire affair a patina of legitimacy as Islamic. Social justice and fairness are not significant components of the system. A principled alternative interpretive system, however, does seem possible so long as it remains within particular parameters, among them faithful adherence to Qur'anic verse, substantial respect for the hadith and sufficient systematization and methodological rigor to avoid what some Islamic jurists call subjectivity, or lack of interpretive control. Specifically, the Article engages and expands upon the ideas of Abdul Razzaq Sanhuri and Muhammad Baqir al-Sadr as potential avenues for reform that lie within these parameters. For the full text of the Article, please see 40 Cornell International Law Review 89 (2007)."
    Date: 2018–09–18
    URL: http://d.repec.org/n?u=RePEc:osf:lawarx:9yeb7&r=all
  5. By: Shephard, Karen; Hamoudi, Haider Ala
    Abstract: "5 William & Mary Business Law Review 105 (2014)The purpose of this Article is to explore, and explain the stubborn persistence of, a central paradox that is endemic to the retail Islamic bank as it operates in the United States. The paradox is that retail Islamic banking in the United States is impossible, and yet it remains highly desired. It is impossible because the principles that are supposed to underlie the practice of Islamic finance deal with the trading of assets and the equitable sharing of risks, profits and losses among bank, depositor and portfolio investment. It is true that much of this can be, and is, circumvented through artifice. However, federal rules that prohibit outright any possibility of loss, such as requirements that deposits be insured against loss, plainly constitute core violations of the shari'a. At the same time, these same federal rules for deposit insurance and similar prohibitions against banks holding extensive amounts of particularly risky assets such as real property are central features of modern banking regulation, which is designed to minimize risk sharing, not support it. It is unimaginable that regulators will create exceptions to, or somehow significantly amend, the modern financial regulatory system in the radical fashion necessary so as to accommodate Islamic finance. Yet notwithstanding such impossibility, Islamic banking is also highly desired in that there is a preoccupation with finding a way to enhance the very limited Islamic commercial banking opportunities that exist in the United States. Law review articles, government issued policy reports, trade publications and Islamic finance outlets themselves have discussed and in some cases advanced such initiatives at one time or another. If this is so, then why such interest in Islamic retail banking? Why the endless repetition of a charade, where one side pretends to care about accommodation, and the other to accommodate, when it is perfectly clear that on the clear plains of doctrine, the two sides cannot possibly, sensibly meet? The reason is that the bank, and the accommodation of it within the U.S. regulatory sphere, is a powerful symbol for the accommodation of the broader, pious Muslim public. The pious Muslim eager to see an Islamic bank open in her neighborhood is at best only partly interested in adherence to religious doctrine. The Islamic bank is more importantly a reflection of a broader recognition of her space in the broader American fabric. Her religion is not only recognized, but her financial practices respected and indeed legitimized by the relevant, American legal and regulatory regime. She is, in this sense, comfortable being both thoroughly American and thoroughly Muslim. As for American regulators and most policymakers, being part of the nation's elite, instinctually preferring messages of inclusion to those that appear xenophobic or intolerant, they are predisposed to help find a way to accommodate this broad Muslim desire. Hence they engage in dialogue to demonstrate that the government is determined to help to find space for the pious Muslim in the United States, respectful of the pious Muslim's religious commitments and aware of the Muslim's ability to function both as Muslim and as American simultaneously. There are broader lessons to be gleaned from this story that pertain to global Islamic finance that are touched upon in the Article's conclusion. In particular, it is no secret that Islamic finance has failed to live up to its ideals of realizing a financial system that is more attuned to fairness and social justice than its conventional counterpart. Instead, it functions as a form of mimicry of conventional vehicles using a series of artifices. Yet despite this, and despite prognostications of doom if the practice does not change its ways, it continues to enjoy explosive growth. As with the case in the United States, Islamic finance does not seem willing or able to function in the way intended, and yet it remains highly desired. As with the United States, the reasons involve considerations beyond the legal; specifically in the global case, the desire of Muslim states to demonstrate some sort of fealty to the shari'a at minimal cost. Finally, as with the United States, the only sensible way that Islamic finance could possibly move forward to satisfy these demands is by remaining the narrow, largely compliant practice that it is. Anything else would either be illegal (if attempted in the United States) or deemed too radical to support (if advanced as a genuine alternative to conventional finance in the Muslim world)."
    Date: 2018–09–18
    URL: http://d.repec.org/n?u=RePEc:osf:lawarx:dne6b&r=all
  6. By: Nizar, Muhammad Afdi
    Abstract: This paper aims to examine the struggle for shari'ah insurance in Indonesia. By using a qualitative-descriptive approach and time series data in the period 2010 - 2017, it is known that the struggle for sharia insurance in the national insurance market is indeed not easy. This is indicated in a number of indicators, namely (i) minimal regulatory and regulatory support; (ii) institutional support indicated by the relatively small number of insurance companies; (iii) asset development, although the growth is quite high, the value is still far below conventional insurance assets; (iii) ability to fulfill claims from Islamic insurance contribution funds is still low; (iv) with a limited portfolio choice, sharia insurance investments are still profitable (profitable investments); and (v) sharia insurance density and penetration are still far below conventional insurance. Shari'ah insurance struggle in the future is certainly more difficult because it must be able to win the opportunities that exist amid various challenges that also accompany it.
    Keywords: conventional insurance, investment fund, risk fund, gharar, maysir, riba, takaful, ta’awun
    JEL: A13 C81 G22 G28 G32
    Date: 2018–11–30
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:97955&r=all
  7. By: Shephard, Karen; Hamoudi, Haider Ala
    Abstract: "48 Virginia Journal of International Law 249 (2008)Despite its currently conservative character, the modern practice of Islamic finance lies on a bedrock of social, cultural and economic revolution. Examination of these revolutionary origins and their attendant jurisprudential implications reveal much about the schizophrenia plaguing Islamic finance today, of a largely formalist practice repeating the functional aims of the early revolutionaries and falsely understood by substantial portions of the wider Muslim community to be achieving such aims. Though the revolution has not come to pass, some of the comparatively radical functional approaches conceived in the context of the anticipated upheaval, and in particular those of the Iraqi Shi'i jurist Muhammad Baqir al-Sadr, deserve reconsideration and refinement as a means through which to reformulate the entire practice of Islamic finance in a manner that realizes more completely the aspirations of the broader Muslim community in its call for uniquely Islamic forms of human association in Muslim societies. Sadr's revolutionary goals are very much consistent with the rhetoric that proponents of Islamic finance and economics use to justify their practice. Yet Sadr, unlike his contemporaries, developed a functional theory of jurisprudence that relied on particular, acknowledged ideological understandings of foundational text that was intended precisely to achieve the articulated goals. Moreover, Sadr relied on a loose network of Shi'i jurists, largely based in Najaf, Iraq, known as the marja'iyya, to provide a more objective form of legitimacy to his ideas. Under Shi'i doctrine, the marja'iyya is responsible under Shi'i doctrine for deriving the rules of the shari'a. To Sadr, the marja'iyya as an institution could establish legitimate, neutral and definable bounds to interpretation that distinguish it from purely individualized, subjective political argument. These parameters would undoubtedly reflect ever changing ideological and ethical understandings of the foundational texts of Revelation. Nevertheless, within that framework, objective, disciplining rules would emerge to constrain individualized subjectivity on the part of any single jurist engaged in the process of interpretation. Some of the particularities of Sadr's economic and jurisprudential philosophy are grounded in his Shi'i context, but the broader lesson to be learned continues to resonate. While the dreams of economic revolution may have long faded, the absolute necessity of a jurisprudential revolution has not. Sadr's idea of a transformed and transforming jurisprudence, bounded by objective and neutral rules on interpretive process, imposed through the consensus of an interpretive community responsible for redefining the foundational texts from time to time, is instrumental to the development of a sensible and functional Islamic system based entirely in Islamic doctrine and responsive to the needs of the community."
    Date: 2018–09–18
    URL: http://d.repec.org/n?u=RePEc:osf:lawarx:bu6e8&r=all
  8. By: Kamaluddin, Amrizah; Hadi, Nabawiyah Abdul; Alam, Md. Mahmudul (Universiti Utara Malaysia); Adil, Mohamed Azam Mohamed
    Abstract: This study examines the social collateral model for Islamic microfinance in Malaysia. Using qualitative instruments on academics and officers of microfinance institutions as the sample study, this study identifies the components that should be included in the social collateral model for Islamic microfinance. Based on interviews and focus group discussions, this study found that similar to the conventional microfinance, the Islamic microfinance also include social capital, group pressure, entrepreneurship skills, and culture as the components of the social collateral model. In addition, this study found that religiosity represents another important component of the social collateral model for Islamic microfinance
    Date: 2019–02–28
    URL: http://d.repec.org/n?u=RePEc:osf:socarx:ya8ft&r=all
  9. By: Shephard, Karen; Hamoudi, Haider Ala
    Abstract: 26 American University International Law Review 1107 (2011)This short paper summarizes an extremely stimulating plenary session, held at the XVIIIth Congress of the International Academy of Comparative Law in Washington DC, dealing specifically with the topic of Islamic finance. The speakers were three renowned leaders in the field. Specifically, they were Kilian Balz, a partner at Amereller who has both practiced extensively in the field, and written about it while at the Harvard Islamic Legal Studies Program at Harvard Law School, Frank Vogel, coauthor of a leading book on Islamic finance and former director of the Islamic Legal Studies Program, and Mahmoud El Gamal, a prolific writer and fierce critic of the practice who also served as the appointed Islamic finance scholar in residence at the Department of the Treasury in 2004.
    Date: 2018–09–18
    URL: http://d.repec.org/n?u=RePEc:osf:lawarx:853tr&r=all
  10. By: Shafaat Saleem (Institute of Ismaili Studies, London)
    Abstract: Paper aims to explore the interactions between two different yet, linked aspects of the society; religion and development. The central idea of this paper is to look at how Faith Based Organizations (FBOs) draw on ideas and practices of development and religion, to carry out their social welfare activities and projects. Paper will be an attempt to explore the meaning, mission and trends of Faith Based Organizations (FBOs) and their characteristics, in terms of their nature, scale and affiliations with political or religious institutions in the contextual setting of Karachi. The paper examines the emerging role of faith/religion in community development, as a counterpoint to modernization programs and projects based on Western models. It argues that FBOs occupy vantage positions over ?non religious? or mainstream organizations, in terms of recruiting staff/volunteers and funding, due to their affiliations with religion. However, although FBOs receive international recognition, stakeholders often tend to overlook the ?conservative approaches? adopted by these organizations. The conservative approaches adopted by FBOs often contradict the mainstream discourse of development. Thus, paper sheds light upon the role of religion in transforming and appropriating the mainstream development discourses and practices. Thesis attempts to attain answers to research questions by employing qualitative methods of research. It focuses upon a case study of AKF, a welfare wing of Jamat-e-Islami, which is inspired by Islamic religious ideologies. It explores the organizational characteristics and its functioning, while contextualizing it in the broader theoretical framework of the subject.
    Keywords: Faith Based Organizations, Development, Al-Khidmat, Charity, Modernity
    Date: 2019–10
    URL: http://d.repec.org/n?u=RePEc:sek:iacpro:9911020&r=all
  11. By: Alam, Md. Mahmudul (Universiti Utara Malaysia); Akbar, Chowdhury Shahed
    Abstract: Efficient Market Hypothesis (EMH) is founded on the theory of expected rationality but the theory of behavioural finance concludes that stock market investors are quasi-rational. Therefore, under the capitalistic system, the efficient markets have already failed to protect the rights of investors that have led to chronic capital market crashes and failure to achieve efficiency, justice, fairness, accountability, fair distribution of benefits, and a rational behaviour among investors. However, recently, Islamic financial institutions and markets have been emerging, which stand on the Shariah provision – the guided way to behave rationally or guided rationality. Based on the empirical experiences and evidences of both market systems, this paper discusses and compares the performances of the markets under the theoretical arguments of “rationality”, “quasi-rationality”, and “guided rationality”. This paper suggests that capital market based on guided rationality under the Islamic System can be a better alternative over the conventional market system.
    Date: 2019–02–28
    URL: http://d.repec.org/n?u=RePEc:osf:socarx:83ekv&r=all
  12. By: Shephard, Karen; Hamoudi, Haider Ala
    Abstract: 1 Berkeley Journal of Middle Eastern and Islamic Law (Inaugural Issue) 83 (2008)There is a crisis in our law schools in the study of Islamic law and the law of the Muslim polities. The current approaches either focus exclusively on national codes to the derogation of other vitally important influences on the legal order, most importantly the body of norms and rules derived from Islamic foundational texts known as the shari'a, or they regard as secondary, and at times irrelevant, the actual legal order of the societies in favor of an academic construction of the theories of medieval Muslim jurists. Neither of these approaches reflects with a necessary degree of accuracy the actual form of legal order in any Muslim society. Adopting a legal pluralist model, this Article relays the actual workings of commercial order in two industries in Shi'i Iraq in order to demonstrate that in understanding the operation of law, and in particular commercial law, in at least parts of the modern Muslim world, both the ever present reality of the national law and contemporary manifestations of the shari'a need to be taken into account.
    Date: 2018–09–18
    URL: http://d.repec.org/n?u=RePEc:osf:lawarx:2gf3j&r=all
  13. By: Molla, Rafiqul Islam; Alam, Md. Mahmudul (Universiti Utara Malaysia)
    Abstract: There is no room for denying the critical importance of microcredit for economic emancipation of rural poor in Bangladesh or any such other country. In analyzing the effectiveness of microcredit program the microcredit providers (NGOs) use accounting profit of the borrowers’ enterprises ignoring implicit costs on the plea that the opportunity cost of labor is near zero in those countries. This plea is certainly not tenable. In this research we use the principle of economic profit taking into account the implicit cost of family labor. From the results of this pilot study we get the reflection that a bulk of the microcredit is borrowed for non productive purposes. As high as 24% of borrowers used the credit exclusively for consumption and debt repayment purposes, and therefore demand for payment of interest from them is nonsensical. Only 48 % of the borrowers used the credits entirely for investment purposes. However, they are faced with very low-return investment opportunities in rural areas. About 68% of them on average had an impressive 83% net return on investment available for payment of interest and dividend. But in case of as high as 32% of them average return on investment was not enough even to cover the most minimum or tolerance level of wages for family labors. In their cases any payment of interest for capital has to be at the expense of the sacrifice of this subsistence level wages of the family labors. They are trapped in a vicious circle of loans. In the absence of a built in mechanism for debt relief they have no scope to be freed from this bondage of debt. An Islamic microcredit model based on Mudarabah principle (whereby the lender and borrower share the business surplus/profit on an agreed ratio, but in case of loss the lender alone bears the loss) may be a better alternative for them. There are indications that it requires an investment of around Tk 12,000 for creating job opportunity for one rural labor for the whole year.
    Date: 2019–02–20
    URL: http://d.repec.org/n?u=RePEc:osf:socarx:hgpvk&r=all
  14. By: Leonid R. Sykiainen (National Research University Higher School of Economics)
    Abstract: This article studies the role of Islamic legal doctrine (Fiqh) as a source of contemporary law in Arab countries. The continuing Islamization of their legal systems includes the codification of Fiqh, which has acquired the role of the material (historic) source of law. Fiqh also plays the role of the official (judicial) source of contemporary law in Arab countries. In Saudi Arabia, it is still the primary source of law. Fiqh plays an active role as a subsidiary source of contemporary law, above of all, in private law
    Keywords: Fiqh, Sharia, material source of law, judicial source of law, subsidiary source of law, codification, legal system
    JEL: K K
    Date: 2019
    URL: http://d.repec.org/n?u=RePEc:hig:wpaper:92/law/2019&r=all
  15. By: Jonathan Oxley (Department of Economics, Florida State University)
    Abstract: This paper utilizes experimental methods to determine how religious affiliation of charities drives donor preference and giving. Subjects choose from one of eight charities, with each charity varying in religious affiliation. Masked and unmasked sessions differ in the knowledge of the religious affiliation of half the charities, with masked sessions omitting the religious affiliation of aforementioned charities. My results show that adding additional religious language decreases contributions on the extensive margin for all unmasked charities. Additionally, adding religious language decreases share of the donation distribution for Christian and Islamic charities, but increases share for secular charities. Subjects significantly prefer charity religious affiliation to match their own religious identity; however, strength of religiosity matters significantly more in this regard than religious affiliation of the donor. My results indicate that religiously affiliated charities have significant financial incentive to selectively display their affiliation.
    Keywords: Religious Affiliation, Charitable Giving, Laboratory Experiment
    JEL: C91 D20 L30 Z12
    Date: 2020–01
    URL: http://d.repec.org/n?u=RePEc:fsu:wpaper:wp2020_01_01&r=all
  16. By: Molla, Rafiqul Islam; Alam, Md. Mahmudul (Universiti Utara Malaysia); Bashar, M. A.; Alam, A. S .A. Ferdous
    Abstract: Entrepreneurship is indispensable for progress of human civilization and effectively exploring and exploiting existing and potential resources for wellbeing of humanity. Modern economics operates basically through two major modes of entrepreneurships: the market/private sector economics relying on commercial entrepreneurships (self-interest- centric) and the state/public sector economics relying on state entrepreneurships (public-wellbeing-centric). However, both have, individually and jointly, failed to ensure economics‟ fundamental goal of wellbeing for human societies. In response, a community wellbeing-centric social enterprise economics (third sector), which features cooperatives and not-for-profit social enterprises in the name of foundations, trusts/awqāf, social businesses, and similar undertakings, has emerged as a make-up strategy to meet the minimum unmet requirements for social wellbeing. However, there is a strongly felt belief that this community wellbeing-centric social enterprise economics needs to be broadened and mainstreamed in order to include entirely charitable institutions, predominantly not-for-profit operations, and predominantly for-profit businesses but blended with provision of social welfare programs like corporate social responsibility, etc., for its emancipation as a major economic system to be able to play a leading role for ensuring desirable economic growth and development. Islamic entrepreneurship, which is basically a community-centric mode of business initiative, is closely related to social entrepreneurship. It is an antidote to the problem of intolerable economic and social dualism and a natural strategy against all forms of capitalist exploitation to control world resources, like, in the past, through European colonialism, and now, through American-led state terrorism. It is the natural guard against economic inequity, wealth concentration, and social divides. Based on its potential and using examples from Bangladesh and Malaysia, we argue that the Islamic style social entrepreneurship, which is operationally a profession for a mission, is intellectually and operationally superior and more efficient for effectively widening and mainstreaming community-centric social enterprise economics to ensure development with equity and social justice. The paper aims to put forward social enterprise economics (third sector) for dialogue and research in the context of effective functioning of modern economies ensuring community wellbeing.
    Date: 2019–02–28
    URL: http://d.repec.org/n?u=RePEc:osf:socarx:r286g&r=all

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