nep-isf New Economics Papers
on Islamic Finance
Issue of 2020‒02‒17
four papers chosen by
Bernardo Batiz-Lazo
Bangor University

  3. Social and financial performance of Islamic and conventional microfinance institutions: Comparative Study in Indonesia By Zaied, Maher; Maktouf, Samir
  4. Community participation tourist attraction development in Jabal Kelor - a case study By Nugroho, Dhimas Setyo; Hermawan, Hary; Putr, Emmita Devi Hari; Mayasari, Citra Unik

  1. By: Samuel Bazzi (Boston University & NBER); Gabriel Koehler-Derrick; Benjamin Marx
    Abstract: This paper explores the foundations of religious influence in politics and society. We show that an important Islamic institution fostered the entrenchment of Islamism at a critical juncture in Indonesia, the world’s largest Muslim country. In the early 1960s, rural elites transferred large amounts of land into waqf—inalienable charitable trusts in Islamic law—to avoid expropriation by the state. Regions facing a greater threat of expropriation exhibit more prevalent waqf land and Islamic institutions endowed as such, including mosques and religious schools. These endowments provided conservative forces with the capital needed to promote Islamist ideology and mobilize against the secular state. We identify lasting effects of the transfers on the size of the religious sector, electoral support for Islamist parties, and the adoption of local sharia laws. These effects are shaped by greater demand for religion in government but not by greater piety among the electorate. Waqf assets also impose costs on the local economy, particularly in agriculture where these endowments are associated with lower productivity. Overall, our findings shed new light on the origins and consequences of Islamism.
    Keywords: :
    Date: 2019
  2. By: Imène Berguiga (University of Sousse); Philippe Adair (University Paris Est Créteil); Nadia Zrelli (University of Sousse); Ali Abdallah (University of Sousse)
    Abstract: Islamic banks face specific risks related to Sharia-compliant contracts. We provide an exhaustive literature review addressing the methodological issues of the measurement of performance and document the main stylised facts regarding the performance of Islamic banks (IBs) in the MENA region. We investigate 53IBs in 11 MENA countries over 2007-2014, first using cross-sectional analysis as of year 2013. A panel data model with instrumental variables estimates the impact of risks upon the returns on assets and equity of Islamic banks. Four salient results emerge: Sharia compliance exerts an ambiguous effect upon performance; Islamic specificity is a minor attribute according to the insignificant share of profit and loss sharing (PLS) contracts in total assets; there is no relationship between Sharia compliance and specific risk; loan loss provisions do not restrict to specific risks (PLS), hedging all risks.
    Date: 2019–12–20
  3. By: Zaied, Maher; Maktouf, Samir
    Abstract: The microfinance initiative has evolved over the past four decades, as important mechanisms for reducing poverty. There is strong evidence, however, to suggest that increasing their financial viability often hampers their ability to reach the poorest of the poor. This article aims to identify the degree of performance of Islamic and conventional microfinance institutions in Indonesia. To answer the problematic of our work, we also apply the methodology of Data Envelopment Analysis (DEA), linear analysis of the efficiency according to the non-parametric programming to evaluate the performance of the MFIs. Based on data collected from a follow-up of the 120 Indonesian MFIs over a quarterly period for five years, over the 2011-2015 period. The descriptive analysis of the different variables shows that IMFIs are on average relatively more financially inefficient than IMFCs. This result suggests that the inefficiency of Indonesian IMFI is more a result of pure technical inefficiency (management shortfalls related to the problem of under-equipment, quality of human resources) than inefficiency of scale. With regard to the central question that this study seeks to answer, which objective (social or financial) for Indonesian MFIs, the results suggest that they are primarily concerned with their social and financial objectives.
    Keywords: Islamic microfinance, financial performance, social performance, Indonesian Islamic rural bank, DEA
    JEL: C14 G21 R51
    Date: 2019–06
  4. By: Nugroho, Dhimas Setyo; Hermawan, Hary (Sekolah Tinggi Pariwisata AMPTA Yogyakarta, Indonesia); Putr, Emmita Devi Hari; Mayasari, Citra Unik
    Abstract: Community-based tourism is an evolutionary form of the concept of mass tourism. One of the primary keys to developing community-based tourism is community participation. The process of developing Jabal Kelor tourism destinations has created several types of community participation. The researchers used a semi-structured interview with key informants involved in developing Jabal Kelor. Observation and documentation was used to check data validity. Interactive data analysis techniques took place continuously the data reached saturation point. The research results indicate that community participation in developing Jabal Kelor tourism destinations consists of participation of the community in areas such as inter alia such as idea formulation, participation, physical participation, skills and education participation, and also financial participation. The originality of this paper is the identification of community participation in efforts to develop Jabal Kelor tourism destinations. The less optimal form of community participation in Jabal Kelor is participation education and skills, and financial participation. The reasonfor this is the lack of community insight, and the people there are weak economic communities and they battle to make a livelihood. original source ; 63688/article_30_vol_9_1__2020_indonesia .pdf
    Date: 2020–01–23

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