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on Islamic Finance |
| By: | Yasmin (Department of Sharia Economics, Faculty of Islamic Economics and Business, Islamic State University (UIN) Sunan Kalijaga); Muhammad Ali Mustofa (Department of Economics, Faculty of Economics and Business, Universitas Gadjah Mada); Amirullah Setya Hardi (Department of Economics, Faculty of Economics and Business, Universitas Gadjah Mada) |
| Abstract: | The nexus between financial inclusion, income inequality, and poverty remains debated, especially in developing economies with diverse regional contexts. This study examines the impact of financial inclusion on inequality and poverty across 33 Indonesian provinces using panel data. We estimate Fixed-Effects and Generalized Method of Moments (GMM) models to address unobserved heterogeneity and potential endogeneity. Financial inclusion is proxied by deposits per capita, while key outcomes are provincial income inequality and poverty rates. Results show a significant negative association between financial inclusion and both inequality and poverty. Regional heterogeneity is evident: the poverty-reducing effects of financial inclusion are stronger in Eastern Indonesia than in the more developed Western region. These findings highlight the need for region-specific policies that expand affordable financial access, strengthen financial literacy, and deepen financing for micro, small, and medium enterprises (MSMEs) to support inclusive growth. Future research should assess the roles of fintech and Islamic finance, evaluate how financial inclusion shapes MSME performance, and rigorously examine the effectiveness of Indonesia’s National Strategy for Financial Inclusion to inform progress toward the Sustainable Development Goals. |
| Keywords: | Financial Inclusion, Income Inequality, Poverty, Fixed-Effect Model, Generalized Method of Moments (GMM) |
| JEL: | G20 D63 I32 C23 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:gme:wpaper:202503005 |
| By: | Ahmadian- Yazdi, Farzaneh; Roudari, Soheil; Mensi, Walid |
| Abstract: | This paper examines the spillover effects between Sukuk and key alternative assets- conventional stock, gold, and currency- in Iran from July 2013 to December 2024. Using three advanced models-Quantile-on-Quantile (Gabauer & Stenfors, 2024), the contemporaneous and lagged R2 decomposed connectedness (Balli et al., 2023), and a portfolio approach (Broadstock et al., 2022)-the study finds that Iran's Sukuk market lacks depth for hedging against gold, currency, and stock risks across direct and reverse quantiles and under various shocks. Results show that the USD is the main contemporaneous driver, while Sukuk is a net receiver in average and contemporaneous connections. Sukuk also offers low long-term returns, making it less competitive. Gold proves optimal for long-term investment, mainly when currency acts short-term. Currency is the primary source of short-term volatility, but Sukuk fails as a stabilizing tool. Thus, including Sukuk in portfolios does not enhance diversification for risk-averse investors during crises due to its limited hedging ability in Iran. |
| Keywords: | Sukuk, Stock market, Gold, Currency, Risk spillover, Portfolio management |
| JEL: | C58 G32 |
| Date: | 2025–03–17 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126962 |
| By: | Muhammad Sifaudin (Faculty of Islamic Economics and Business, State Islamic University of Salatiga); Diyah Ariyani (Faculty of Islamic Economics and Business, State Islamic University of Salatiga); Nur Ayiyah (Faculty of Economics and Business, Semarang State University) |
| Abstract: | This study investigates the role of zakat utilization in enhancing food security and alleviating poverty in Indonesia from 2018 to 2024, with a specific focus on its contributions to the agricultural sector. Grounded in the legal framework provided by Law Number 23 of 2011 and Government Regulation Number 14 of 2014, which authorize zakat institutions such as the government, corporations and non-government organization to allocate zakat funds productively to critical sectors, this research addresses the pressing issue of poverty and food insecurity in Indonesia. As of 2024, approximately 9.03% of Indonesia’s population lives below the poverty line, with rural areas experiencing particularly high levels of food insecurity. Utilizing secondary data from BAZNAS, Statistics Indonesia (BPS), and 385 farmers receiving zakat responding to a semi-structured questionnaire, this study employs a mixed-methods approach, combining quantitative and qualitative analyses. Descriptive statistics, inferential statistics (NVIVO), and logistic regression analysis are used to examine the Food Security and Poverty indices. The findings reveal that effective management of zakat funds has the potential to reduce economic disparities and improve the livelihoods of impoverished farmers in rural areas. Furthermore, the study demonstrates that zakat allocations directed toward the agricultural sector can significantly enhance productivity and contribute to sustainable food security in the long term. These results underscore the importance of strategic zakat distribution as a tool for poverty alleviation and agricultural development in Indonesia. |
| Keywords: | Zakat, agricultural production, food security, poverty alleviation, Indonesia. |
| JEL: | Q18 I32 D63 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:gme:wpaper:202503004 |