Jurnal Ekonomi & Keuangan Islam

Influence of the Shariah supervisory board on tax avoidance at an Indonesian Islamic bank

2023-03-15T02:03:51+00:00

Purpose – This study examines the influence of the Shariah supervisory board (SSB) and Islamic banks’ characteristics on tax avoidance practices in Indonesia.
Methodology – This research uses secondary data using the panel data analysis method fixed effects model; the research sample is an Islamic bank in Indonesia from 2017 to 2021.
Findings – The results indicate that SSB size, SSB reputation, and bank size have a positive effect on tax avoidance. The variables across SSB members, SSB education level, bank age, and bank profitability have a negative effect. Meanwhile, the SSB expertise variable, SSB remuneration, and turnover do not affect tax avoidance.
Implications – Islamic banks play an essential role in social welfare to align with tax contributions in developing countries. Therefore, tax regulators and Islamic banks must collaborate to review the treatment of expenses according to tax regulations.
Originality – This study fills a research gap by investigating the relationship between SSB characteristics and tax avoidance in Indonesian Islamic banks, which has yet to be discussed in previous papers.

Problems, solutions, and strategies for developing stock waqf in Indonesia

2023-10-07T01:31:16+00:00

Purpose – This study aimed to determine priority problems, solutions, and strategies for developing stock waqf in Indonesia.
Methodology – The analytical method used was qualitative with the Delphi approach. The informants for this research were experts in the field of shared waqf. The group of informants consisted of regulators, sharia stock practitioners, nazhir, academics, and wakif with a total of 13 informants.
Findings – The results show that the priority issues regarding investor knowledge are from the wakif aspect. A priority problem is the low-literacy stock waqf. The solution priority is from a regulatory perspective. The sub-criteria of the operating rules that are the priority for the solution are the issuance of technical regulations for managing stock waqf. The strategy priority that can be implemented to develop a stock waqf is from the Nazhir aspect as a human resource.
Implications – The implications of the research results are in the form of a strategy implemented by the Indonesian waqf board (Badan Wakaf Indonesia, BWI) by issuing standard operating procedures (SOP) for nazhirs in the management of stock waqfs.
Originality – The novelty of this research lies in the development of stock waqf, as seen from the problems, solutions, and strategies. In addition to different things, this study also uses a qualitative Delphi approach to formulate problems, solutions, and strategies for developing equity waqf in Indonesia. The Delphi method has not been widely used in Indonesian stock waqf research.

A system dynamics model on how zakat can reduce poverty in Indonesia

2023-06-27T09:24:08+00:00

Purpose – This study analyzes the potential of zakat for poverty alleviation using a system dynamics approach. Indonesia has excellent zakat potential as a country with the largest Muslim population. However, the poverty rate in Indonesia is still high at approximately 10.14% of the total population.
Methodology – This study used system dynamics to model how zakat can reduce poverty in Indonesia. The system dynamics method was chosen because of its capability to model the complexity of the system.
Findings – The model indicates that increasing the percentage of productive zakat allocation and decreasing the delay of the conversion program can reduce the poverty alleviation time from 200 to 120 years using the zakat nisab standard and from 32 years using the Central Statistics Agency (BPS) poverty standard. However, if Zakat faces limited funds, the focus should be on decreasing the conversion delay.
Implications –This research can encourage people to become muzakki (zakat payers) because, as indicated in the simulation models, muzakki growth of muzakki has a role in poverty alleviation. In addition, Zakat institutions can use the developed model to simulate the best policy for poverty alleviation before implementing the program.
Originality – Although the system dynamics approach has shown promising findings in modeling poverty, the number of studies utilizing system dynamics to analyze the effect of zakat on poverty reduction is limited. Therefore, this study aims to evaluate the effectiveness of zakat in alleviating poverty by implementing a system-based approach and simulating system dynamics.

Islamic rural bank mission drift: Equity financing vs debt-based financing

2023-06-24T02:57:18+00:00

Purpose – This study aims to compare the depth of outreach, financial performance, and trade-off between the depth of outreach and financial performance (mission drift) between equity financing and debt-based financing in Indonesian Islamic Rural Banks.
Methodology – We compare the depth of outreach and financial performance using descriptive statistics and explore mission drift comparisons using OLS time series.
Findings – The depth of the outreach comparison shows that debt-based financing performs better. However, equity financing outperforms financial performance. The regression results show mission drift in Musharaka and Multiservice financing, indicating that both sides have mission drift. However, there is no mission drift in Murabaha financing, which constitutes the majority of financing in Indonesian Islamic Rural Banks. Murabaha financing synchronously demonstrates excellent depth of outreach and financial performance.
Implications – Islamic Rural Banks in Indonesia need product innovation in equity financing to obtain a better depth of outreach and avoid mission drift. The simplicity of the practice in Murabaha can be a reference for product innovation in Islamic Rural Banks, while the government can support Indonesian Islamic Rural Banks' product innovation by providing appropriate regulations.
Originality – This study seeks to fill the comparison gap between mission drifts in Indonesian Islamic rural bank financing. There is a limitation in studies of Islamic rural bank financing mission drifts in Indonesia since the comparison of mission drift deals only with Islamic microfinance at a global level.

Asymmetric information issues in micro-business financing of Baitul Maal wa Tamwil

2023-04-10T08:35:27+00:00

Purpose – Despite its potential advantages, poverty interferes with economic progress in developing countries, obstructing small and medium-sized businesses from obtaining external financial assistance via Islamic microfinance. This study explores the problems related to asymmetric information in the context of funding microbusinesses in Baitul Maal wa Tamwil (BMT), with the goal of improving our understanding of the risks associated with financing in Islamic microfinance institutions, namely BMTs.
Methodology – This research utilized a qualitative approach and content analysis to study BMTs in Indonesia, involving academics, practitioners, and voluntary participants. The sample size was adequate for achieving data saturation.
Finding – This study demonstrates that there might be asymmetric information during the execution of contracts, leading to deviant behavior by BMT management and partners. The study additionally identified the risk characteristics present in Islamic MFIs, emphasizing the necessity for implementing novel lending mechanisms, such as group lending and individual collateralized loans.
Implication – This study underscores the importance of resolving the substantial administrative overheads associated with these institutions. It is advisable to utilize additional research methods such as interviews, observations, and documentation to augment the depth of the research and engage a varied array of individuals for a comprehensive collection of information.
Originality – Studies of Islamic microfinance in Indonesia have examined its performance, obstacles, and experience. However, empirical data on agency problems such as moral hazard and asymmetric knowledge are lacking. For optimal BMT operating efficiency and Shariah compliance, it is essential to comprehend these challenges.

The effect of Sharia monetary policy instruments and Islamic bank financing on economic growth and inflation

2023-10-05T08:58:30+00:00

Purpose – This study aims to determine the influence of Open Market Operations (Sertifikat Bank Indonesia Syariah, SBIS), Sukuk of Bank Indonesia (Sukuk Bank Indonesia, SukBI), Bank Indonesia Sharia Deposit Facility (Fasilitas Simpanan Bank Indonesia, FASBIS), Islamic Interbank Money Market (IIMM/Pasar Uang Antar Bank Syariah, PUAS), and Islamic Bank Financing on economic growth and inflation in Indonesia.
Methodology – This study uses the Vector Error Correction Model (VECM), which uses monthly data from January 2017 to December 2022.
Findings – The results of the VECM analysis show that, in the short and long term, the FASBIS and PUAS variables significantly affect economic growth. The Covid-19 pandemic has a significant effect in the short term, whereas Islamic Bank Financing has a significant effect in the long term. In the Inflation model, only FASBIS has a significant short-term effect. In the long-term, FASBIS, PUAS, and Islamic Bank Financing significantly affect inflation.
Implications – The results of this research suggest that the Government and Bank Indonesia will need to re-evaluate Sharia Open Market Operations, especially SBIS and SukBI instruments. This is the impact of the estimation results on the Open Market Operation variable, which are not significant, and the IRF results, which are negative in the Economic Growth Model and positive in the Inflation Model, indicating that the Open Market Operation variable actually inhibits economic growth and triggers inflation.
Originality – This study discusses the influence of Sharia monetary instruments before and after the Covid-19 pandemic and adds the SukBI instrument as a Sharia monetary instrument.

Analysis of the zakat village model for economic sector utilization: ANP approach

2023-10-31T12:45:56+00:00

Purpose – This study evaluates the economic sectors of the Zakat Village Program by identifying the objectives, criteria, and risks.
Methodology – This study uses a qualitative Analytic Network Process (ANP) approach to determine the order of priorities and decision-making. Data were collected through interviews and questionnaires with expert respondents in the field of zakat utilization and empowerment.
Finding – This research shows that the village zakat program plays an important role in overcoming economic problems. However, experts believe that the aspect of determining activities is still considered low.
Implication – The findings of this study contribute to the enhancement of zakat village program planning, so that the objective components of the zakat village program can be expressed more clearly and in detail in the future.
Originality – This original study collected the views of experts in evaluating village zakat programs by confirming them through the geometric mean as a priority value for each objective, criteria, main criteria, and risk.

Development of waqf forest in Indonesia: Brand equity analysis of Bogor waqf forest purchase intention

2023-11-12T02:25:00+00:00

Purpose – This study aims to analyze the characteristics of respondents who donate, visit, or endow Bogor Waqf Forest and the influence of brand awareness, brand association, brand loyalty, and perceived quality on the purchase intention of Bogor Waqf Forest.
Methodology – The data obtained in this study were primary data from questionnaires with 136 respondents and secondary data from literature studies such as foundations, journals, books, and related articles. The methods used in this research are descriptive analysis and structural equation modeling–partial least squares (SEM-PLS).
Findings – The results of this study show that brand loyalty and perceived quality have a positive and significant influence.
Implications – Maintaining and increasing perceived quality and brand loyalty so that consumer loyalty and perceptions remain high and well maintained.
Originality – This research is original in measuring brand equity analysis of intention to purchase a Bogor Waqf Forest.

Examining the impact of zakah and Islamic finance on national economic growth

2023-10-25T02:38:29+00:00

Purpose – This study aims to analyze the effect of Islamic financial instruments, including social funds zakah, infak, and sadaqah (ZIS), Islamic financing, Sharia stocks, and corporate sukuk, on economic growth.
Methodology – This study uses monthly data from 2013 to 2022 to examine the relationship between ZIS distribution, Islamic bank financing, Islamic stock capitalization, corporate sukuk issuance, and economic growth proxied by the production industry index (IPI). The Vector Error Correction Model (VECM) was utilized.
Findings – According to the short-term estimation results, sukuk significantly hinders economic growth, whereas only the ZIS variable has a positive and significant impact. Long-term economic growth is positively impacted by the ZIS and Islamic financing variables, negatively impacted by sukuk, and not significantly impacted by Sharia stock. The Impulse Response Function and Variance Decomposition analysis results also demonstrate that the variables of the Islamic financial sector have a shock effect on Indonesia's economic growth, with ZIS funds making up the majority of the contribution and Sharia stocks the least.
Implications – This study will help policymakers, industry, and academia accelerate the Islamic finance sector in Indonesia and strengthen its role in supporting and advancing Indonesia's economic recovery.
Originality – Islamic finance, commonly known as Islamic banking–extends beyond Indonesian banks. Non-bank Islamic institutions, including capital markets and social finance, play a vital role in optimizing Islamic financial instruments for national economic growth.

Twenty years of Islamic banking literature by Indonesian researchers: A hybrid reviews

2023-10-04T07:57:03+00:00

Purpose – The emergence and growth of Islamic Banking in Indonesia have significantly increased over the past few decades. Consequently, there is a pressing requirement for a thorough examination to analyze the present state of IB literature, including its development and conceptual framework.
Methodology – This study utilizes a bibliometric methodology and Systematic Literature Review (SLR), applying content analysis techniques to uncover the intellectual framework of IB literature produced by Indonesian researchers, as documented in the Scopus database. This study utilized 418 articles published between 2003 and 2023, resulting in a total of 418 articles. Data were analyzed using various software applications, including Publish or Perish (PoP), Excel, VOS-Viewer, and Biblioshiny-R.
Findings – This study identifies the institutions, authors, journals, and articles that have had the most influence on IB literature published by academics in Indonesia. Additionally, this study sought to uncover patterns of research collaboration within this body of literature. Moreover, this study discovered four main clusters: comparing Islamic and conventional banks, examining the interaction between Islamic banks and their customers, exploring corporate social responsibility (CSR) and accounting practices, and examining the impact of Covid-19 within the context of Islamic banking.
Implications – The findings of this study will assist researchers in identifying a range of potential topics for future research that Indonesian researchers can explore.
Originality – Applying bibliometrics and SLR methodologies enables this study to comprehensively assess literature development in the IB in Indonesia by incorporating quantitative and qualitative analyses.