2020 iBAF

The detrimental growth of new business contributions in Malaysia Takaful market for 1st half 2020 due to COVID-19 pandemic indicated the market required new catalyst to the way of doing business. The objective of the study is to explore the benefits of blockchain technology in family takaful. The study applied a semi-structured interview with the takaful practitioners in the market has listed five potential benefits that can be offered by blockchain technology in the area of product development, operation and distribution channel. The study aims for the viability of the blockchain in Family Takaful can be explored by the players.

Although the majority of Malaysian are Muslims, data shows that the takaful penetration rate was much lower than the conventional insurance. Motor takaful as an important segment in the general insurance sector which was offered as an alternative to conventional is supposedly becoming the preferred choice for Muslim. For that, this study aims to look at the factors that influenced the intention to participate in motor takaful among public services employees. Applying the Theory of Reasoned Action (TRA), this study analysed respondents’ intention to participate in motor takaful. The variables used are based on TRA that are risk awareness, attitude and subjective norms. Multiple Linear Regression (MLR) was carried out to analyse the relationship between the independent variables and the dependent variable. The results showed that subjective norm does not significantly affect the dependent variable. Risk awareness and attitude significantly influence the intention to participate in motor takaful. This study provides a better understanding of the factors influencing the intention of vehicle users in choosing takaful. This study is important as one of the small contributions, especially to takaful operators in empowering takaful industry, specifically, and for Islamic financial system, generally, in Malaysia.

Pengurusan wakaf berhadapan dengan beberapa isu mengenai aset tidak produktif. Masalah ini sekiranya tidak ditangani dengan baik akan mengundang beberapa masalah lain pada masa akan datang. Antara kemungkinan yang akan dihadapi ialah Majlis Agama Islam Negeri tepaksa menanggung liabiliti seperti bil utiliti, kos penyelenggaraan dan lain-lain kos pengurusan. Kajian ini cuba melihat konsep tawriq dan istibdal sebagai satu solusi kepada masalah aset tidak produktif ini. Antara solusi yang dilihat dapat digunakan untuk menangani isu ini adalah, menggunakan instrumen Istibdal dan Tawriq. Konsep asal instrumen Istibdal adalah menukarkan tanah kepada tanah, manakala Tawriq pula adalah mencairkan tanah kepada tunai. Kedua-dua instrumen adalah cadangan pilihan solusi penyelesaian semasa terhadap harta wakaf, tanah dan bangunan yang tidak produktif. Kajian ini menggunakan metode kualitatif, dengan menganalisis teks kandungan (content analysis) beserta temubual bersama Mufti Kerajaan Negeri Sembilan dan Pegawai Jabatan Wakaf dan Sumber Am Perbadanan Baitulmal Negeri Sembilan (PBNS). Kajian ini mendapati, empat daripada tujuh harta wakaf tidak produktif boleh diberdaya majukan menggunakan kaedah Tawriq Istibdal. Manakala tiga harta wakaf yang selebihnya masih boleh dimanfaatkan walaupun tidak memberi pulangan. Kajian ini mencadangkan tiga strategi pelaksanaan Tawriq Istibdal. pertama, mengIstibdalkan tanah-tanah dilokasi yang tidak strategik, kedua, Tawriq dan Istibdal tanah-tanah di lokasi tidak strategik ke tanah di lokasi strategik dan ketiga, Tawriq sebahagian tanah yang mempunyai keluasan yang bersesuaian untuk mendapatkan dana bagi membangunkan tanah yang sama dengan kerjasama penduduk serta komuniti setempat. Implikasi polisi kepada kajian ini adalah, MAINS dan Institusi Wakaf boleh mengenalpasti harta-harta wakaf yang tidak produktif dan mengambil langkah-langkah proaktif dengan membangunkan polisi membangunkan harta tidak produktif dengan menggunakan instrumen Istibdal dan Tawriq

Pasca berlakunya tsunami pada tahun 2004, melalui MoU Helsinki yang dimeteraikan antara pemerintah Republik Indonesia dan Aceh, Negeri Aceh diberikan satu kuasa “Autonomi Daerah” dalam menjalankan pentadbiran negeri. Tujuan dan permasalahan yang dibincangkan dalam artikel ini adalah melihat bagaimana peluang autonomi daerah yang telah diberikan oleh kerajaan Indonesia kepada negeri Aceh dapat digunakan sepenuhnya untuk melaksanakan sistem perbankan Islam. Kajian ini digarap berasaskan metode kualitatif melalui pendekatan deskriptif semula. Hasil dari kajian ini adalah Aceh yang terkenal dengan negeri serambi mekkah ini mengalami keterlambatan dalam pelaksanaan sistem perbankan Islam walaupun sebenarnya pada tarikh 16 Julai 2008 telah disahkan Undang-undang Nomor 21 Tahun 2008 tentang Perbankan Syariah sebagai landasan hukum tersendiri bagi bank syariah di Indonesia namun Qanun Aceh yang mengatur tentang sistem kewangan Islam baru muncul pada tahun 2018. Kesimpulannya, dengan peluang antonomi daerah yang diberikan oleh pemerintah pusat Indonesia kepada negeri Aceh, Aceh perlu mengambil langkah-langkah yang konstruktif bagi memastikan pelaksanaan syariah di negeri tersebut dapat dilaksanakan secara kaffah termasuk dalam bidang sistem perbankan Islam.

Pandemik Covid-19 yang melanda seluruh dunia bukan sahaja memberi implikasi kepada kesihatan, malah kepada ekonomi dan pasaran buruh. Hampir 40 peratus daripada keseluruhan tenaga buruh di Malaysia merupakan golongan belia yang berusia 15 hingga 29 tahun. Tidak dapat dinafikan bahawa golongan ini adalah golongan penting kepada pasaran buruh negara dan berperanan sebagai tunjang kemakmuran ekonomi negara. Justeru, kesan semasa dan selepas Covid-19 kepada belia tidak boleh dipandang ringan. Kadar pengangguran dijangka meningkat kepada 5.5 peratus atau lebih 860,000 orang penganggur sepanjang tahun 2020 di Malaysia. Bank Negara Malaysia turut mengumumkan peningkatan unjuran kadar pengangguran kepada 4 peratus untuk tahun 2020. Graduan baharu turut menerima tempias penguncupan ekonomi akibat krisis Covid-19 melalui penawaran pekerjaan yang terhad. Dengan jumlah keluaran graduan ke pasaran buruh sebanyak lebih 200,000 setiap tahun, sudah pastinya mereka akan menghadapi kesukaran untuk mendapatkan kerja. Bagi yang mengekalkan pekerjaan pula, berdepan kehilangan pendapatan 90 peratus dan tidak mempunyai simpanan cukup untuk meneruskan kelangsungan hidup. Justeru, pelbagai inisiatif dilaksanakan oleh Kementerian Sumber Manusia bagi mengatasi permasalahan tersebut menerusi Pelan Jana Semula Ekonomi Negara (PENJANA) yang dibentangkan oleh Perdana Menteri Malaysia pada 5 Jun 2020. Melalui PENJANA, insentif pengambilan pekerja telah menyediakan lebih 300,000 graduan baharu dan belia yang menganggur termasuk perantis untuk menerima manfaat daripada insentif ini. Maka, artikel ini bertujuan mengupas cabaran dan survival kewangan belia berdepan krisis Covid-19 dengan mengaplikasikan kaedah kualitatif menerusi analisa dokumen dan data sumber sekunder. Artikel ini turut menjelaskan langkah-langkah kerajaan menangani isu pengganguran di kalangan belia. Hasil perbincangan mendapati bahawa krisis Covid-19 menuntut semua pihak untuk melakukan pengubahsuaian dalam cara hidup termasuklah dalam menguruskan kewangan. Peluang yang diberikan pihak kerajaan dalam mengatasi ekonomi belia khususnya sektor pekerjaan haruslah direbut sebaik mungkin.

Shariah audit has currently emerged as an important mechanism in ensuring Shariah compliance in line with the rapid development of Islamic Banking. It strengthens the Shariah compliance and enhance the integrity of Islamic Financial Institutions (IFIs) due to the uniqueness features of the IFIs such as the prohibition of riba, gharar, maysir and other requirements that its activities must be in compliance with Shariah. Research on audit expectations gap in Shariah audit practices has received little attention by researchers. Two objectives are set in this study; these are: Firstly, to examine the perceptions of the internal auditors (Shariah auditors), regulators (BNM), Shariah committee, Shariah officers, external auditors and depositors concerning the Shariah audit practices in the Islamic banks in Malaysia. Secondly, to determine the existence of expectations-performance gap between internal auditors (Shariah auditors), regulators (BNM), Shariah committee, Shariah officers’ external auditors and depositors concerning the Shariah auditor’s performance in the Islamic banks in Malaysia. Based on the findings there is existence of gap in Shariah audit practices and auditor’s performance. Thus, there is a need to strengthen the Shariah audit practices in the Islamic banks to ensure greater effectiveness of the goals of Shariah compliance. The research provides new insights into the structure, composition and extent of the audit expectation-performance gap in Shariah audit practices but, more importantly, it signals a rational, comprehensive approach towards narrowing the gap. This should bring practitioner’s and stakeholders's expectations on Shariah audit practices and Shariah auditors' performance into closer accord and, as a consequence, reduce the criticism and different expectations on the Shariah audit practices in the Islamic banks.

The concept of social responsibility of Islamic banks has produced considerable interest in Malaysia in recent years. Prior research tends to focus on the relationship between corporate social responsibility and company performance has largely been based on international data, therefore this paper will focus on the Malaysia context. This study aims to explore the corporate social responsibility disclosure (CSRD) practices of the 10 Islamic banks in Malaysia during the period 2017-2018 and examines its impact on company performance. The paper develops a comprehensive CSR index for Islamic banks in Malaysia based on prior literature and AAOIFI, No7 2010 guidelines . The study applies ordinary least squares regression analysis to study the impact of respective dependent variables. The results show a significant negative relationship between CSR and company performance of Islamic Banks in Malaysia. The negative effect on firm performance could be driven by the content of the CSR information disclosed and how investors perceive it. There is a possibility that CSR information itself raises concerns about firm performance, which leads investors to lower their valuation. While CSR information could offer positive news to the stakeholders, they might misinterpret the practice that competitor firms would benefit from this excessive information. The findings imply the need for Islamic banks to strategically leverage the effect of CSRD on company performance. The finding of the study also provides an important implication for investors, managers, regulatory bodies, policymakers and Islamic banks in Malaysia.

Halal market becomes one of the most profitable market at present and has shown promising growth particularly in Malaysia. The concept of halal is not only limited to food consumption, but also covers halal tourism which consists of halal hotels, halal transport (airlines), halal restaurants, halal tour packages and halal finance. Majority of tourists got information through travel websites, social media, blogs, travel agencies and advertising. This signifies the importance of digital marketing as the internet has changed the way people communicating and interacting with each other. This study aims to explore the concept of digital marketing and its potential in enhancing marketing strategies for halal tourism provider based on critical review of literature. Halal tourism providers have been encouraged to improve their tourism promotion signifying the importance of digital promotion to increase global outreach of halal tourism services.

The study focuses on establishing the downside beta for Shariah compliant index, conventional index and bitcoin index (a cryptocurrency) in Malaysia. The indices for the Shariah compliant is the FTSE Bursa Malaysia EMAS Shariah (FTFBMS), the conventional index used is the FTSE Bursa Malaysia EMAS (FTFBMEMAS) and the proxy index for the cryptocurrency is the bitcoin. Given the weak track record of cryptocurrencies in Malaysia, the bitcoin is used as a proxy to simulate cryptocurrency behavior in Malaysia. Downside beta for the three portfolios is calculated through the use of historical volatility (HV) and the Exponentially Weighted Moving Average (EWMA) methods. The findings indicate there is a statistically significant difference in downside beta for each of the portfolios, although the difference is very minimal between Shariah compliant index and the conventional index. However, bitcoin poses to be a riskier portfolio with significant difference over both other indices. The low beta for Shariah complaint indices and its conventional counterparts suggests the large market volume the two indices share, still maintaining them as the mainstream financial models. While bitcoin is vastly riskier, it is surely making promising strides as far as financial trading methods are concerned. Moreover, there is great optimism in cryptocurrency models that assimilate moral Islamic trading principles as research has shown Shariah compliant stocks to be more efficient.

Malaysia's position as one of the drivers of the halal industry in the world at the same time puts it as a leader in developing a comprehensive and trusted halal management and assurance system which become a global reference and yardstick. The Department of Islamic Development Malaysia (JAKIM) as the body responsible for providing halal certification to manufacturers and products produced in Malaysia, introduce the Halal Assurance Management System (HAMS) in 2011 as a measure to establish a systematic mechanism in monitoring, controlling and improving halal management and assurance at the internal level of the entity. It is an effort to inculcate accountability and integrity among businesses in preserving product and process validity. In line with this principle, it is appropriate for companies to channel information related to the implementation of HAMS to their stakeholders through appropriate disclosure in appropriate publications and media. This study examines and analyzes the level of disclosure related to HAMS in the form of programs, activities and measures implemented in JAKIM halal-certified listed companies. For this purpose, a total of seven JAKIM-halal certified public listed companies among food and beverage manufacturers were selected as the study sample. Reviews and analysis are made on the annual reports, publications and websites of the companies concerned to extract and identify the disclosures made related to the implementation of HAMS components. The results of the study found that the level of disclosure related to HAMS components by these companies is very minimal and limited. The establishment of the Internal Halal Committee (IHC) and training programs which are important aspects in the implementation of HAMS are also not covered in the marketing strategies of most companies. Lack of value proposition is a factor why this scenario applies. This study also found that the size and maturity of a corporate influence the level of disclosure made. Based on these findings, it is suggested that the level of awareness and sensitivity among consumers be increased to put pressure on businesses. The evidence also suggests the need for mandatory enforcement of standards on these types of disclosures.

This study explores the possibility for financial-based crowdfunding as alternative funding for entrepreneurs during the Covid-19 crisis. It seeks to determine whether crowdfunding should become one of the ventures’ crisis management and future planning. This paper is conceptual in nature and reviews the related literature on the potential of crowdfunding in helping entrepreneurs to secure funding during the pandemic. In order to present an actual scenario that reflects Malaysia’s crowdfunding-based activity, contents which relate to crowdfunding activities during the crisis were extracted from the platforms’ websites. Crowdfunding activities are conducted virtually during Covid-19, making it possible for the fundraiser to approach the funder. However, the number of funders’ participation during the pandemic showed a decline. In most cases, tech-related and R&D projects tend to report successful funding campaigns. Moreover, trustworthiness and social capital are factors that increase the campaign success rate during the current crisis. The entrepreneur's ability to make use of every possible resource (entrepreneurial bricolage) is a value added trait that helps them to confront the crisis. Additionally, the government’s role is important during the crisis to ensure that entrepreneurial activities could continue to move. Lastly, entrepreneurs may enhance their survivability and sustainability by creating more value for better economic growth. This study is one of the few studies to explore the adoption of online funding through the financial-based platforms in Malaysia during pandemic. The study finds that financial-based crowdfunding has a significant effect on the entrepreneurial funding in Malaysia context. Hence, more entrepreneurs should develop their knowledge to have a better picture of the online funding, the strengths and weaknesses it constituted for the future growth of the ventures. The pandemic’s broader implications require policymakers to have real-time information for decision-making. Thus, the government should leverage the financial-based platforms’ purpose for the benefit of entrepreneurial aims.

The International Labor Organization defines gig work as a task-based job with higher presence in an online labor platforms. Gig workers are part-time workers or freelancers offering their jobs and services via platform economy. The recent COVID-19 financial crisis has highlighted the fact that gig workers do not receive benefits and perks associated with permanent jobs. This study explores the future direction of gig economy in Malaysia. A survey questionnaire was carried out to students and alumni from the Universiti Sains Islam Malaysia in June until September 2020 based on purposive sampling. The results suggest that most of the respondents have at one point, during the Movement Control Order period, involved in gig jobs such as dropship, courier services and food delivery. In general, the respondents perceived that gig works contribute to the economy. However, it is important for the gig workers to continue the process of upskilling and reskilling themselves to remain competitive. For the employers, benefits such as social security contributions and medical benefits should be provided to gig workers accordingly. Policy makers may utilize the information of how the traditional labor market is disrupted by the gig economy, raise awareness on the different expectations of both employers and employees, and devise appropriate strategies to support gig economy as an enabler of growth post-pandemic period.

Malaysia is well known with Halal industry due to government’s efforts to facilitate the development of Halal industry. Halal industry in Malaysia is acknowledged due to its efficiency in the regulatory framework as well as its diversity of the sectors, ranging from products (food and beverages, consumer products, pharmaceuticals, cosmetics and others), and services (such as logistics, tourism and banking sectors). The Halal industry contributes 7.5 percent to Malaysia GDP in 2017. As the Halal practice should be applied in the whole chain of Halal production and distribution, the Islamic banking sector is proposed to support the whole halal industry through their funding. This support plays some roles towards the integration, and accelerating the growth of the Halal industry. While it is expected that conventional trade finance products are diverse and contribute more to Malaysia businesses, not much is known on the evolvement of the Islamic trade financing compared to conventional banks. This study explores the trends of growth in the usage of Islamic and conventional trade finance products.

To improve the incomes of a population and attain sustainable development, a nation’s primary goal must focus on continuous and inclusive economic development. Such optimal conditions will create economic security with greater and better employment opportunities for her citizens. This study seeks to look at the halal cosmetics sector, which is fast expanding globally, with special focus on the situation in Malaysia. Subsequently, it is crucial to diagnose the factors affecting the growth of halal cosmetics SMEs operating in the halal cosmetics ecosystem. A cybernetics and systems-based approach will be developed to understand the dynamic nature of growth variables and their relationships will be mapped based on data gathered from various groups of stakeholders in Malaysia. The research method chosen is qualitative due to the multi-faceted nature of the halal cosmetics industry. The cybernetics analysis had identified the most binding constraint variable within the halal cosmetics industry. This will enable policy makers and SMEs to take intervention initiatives and thereby ensure the growth of halal cosmetics industry and increase inclusive growth in this industry. It has also paved the way for the stakeholders to predict behavioural changes of the affected variables should any of the related growth constraint variable alter. Advent of COVID19 pandemic has impacted the cosmetics industry as a whole and use of augmented reality coupled with the rise of skin care gadgets has ensured survival of this industry.

The GCC banking industry witnessed a moderate low performance over the period 2015-2019, which is attributed to the sharp declining of global oil prices. This study aims to investigate the impact of intellectual capital components that human capital and structural capital on the GCC banking industry performance. The research is based on secondary data collected from Thomson Reuters data base, which covers 168 quarterly data basis span from 2013 to 2019. The panel data estimation is used to test the potential contribution of intellectual capital on the GCC banking industry performance. The result obtained confirmed a significant and positive impact of structural capital on the GCC banking industry performance. It recommends that the GCC banking industry needs to promote the adoption of intellectual capital to cope the latest global development in banking industry.

Zakat is the third pillar in Islam which forms social security for the poor and needy. Zakat also develops a balanced economic growth through redistribution of wealth in society, wealth purification and for spiritual development. Zakat is among the most important elements of wealth management that are so dynamic and recognized as one of the proper methods to measure economic growth. Macroeconomic variables such as growth domestic product (GDP), consumer price index (CPI) and unemployment rate are among the best measures for the economic condition of a country. Thus, proper Zakat fund management should be carried out to address wealth accumulation during good economy and also zakat collection shortages during bad economy such as in the financial crisis. Consequently, the objective of this paper is to examine the relationship between zakat collection in Selangor and macroeconomic variables such as GDP, CPI and unemployment rate. Quarterly data is used to show seasonal fluctuations or changes in zakat collection in relation to changes in macroeconomic variables. This study applies time series analysis to assess the state of zakat collection under the influence of macroeconomic factors. The findings suggest growth domestic product (GDP) is positive and significantly correlated with Zakat collection (ZC) at 1% significant level. This means the higher the GDP the higher the amount of Zakat collection and vice versa. Consumer price index (CPI) and unemployment rate are not significantly correlated with Zakat collection (ZC). These results implicate the need for Lembaga Zakat Selangor particularly to have proper financial planning in zakat collection such as bigger savings during good economy (higher GDP) to cover the increasing demand from the existing and potential beneficiaries (Asnaf) during crisis period (lower GDP) such as Covid-19.

Industrial Revolution 4.0 has been the new hype for several years now. Everyone is talking about automation and the changes to the job environment, which will cause massive technological unemployment if IR4.0 adaptation were not taken seriously. The journey of industrialization was then accelerated when the Covid19 pandemic hits the global. Everybody is all about the new norm that promotes social distancing, automation, and the virtual world. Though it is the right measure, IR4.0 was not viewed in Islamic perspectives. The existence of automation that may disregard Islamic moral or ethical value and fintech that is not compatible with Islamic finance and has attracted users to switch from Islamic finance to conventional financing is concerning. All of these happened due to the failure to foresee that the demand to adapt IR4.0 is not only a mere worldly success but can also be considered as Al Falah, an Islamic concept that defines success as something beyond materialistic. Therefore, the purpose of this paper is to eidolon efforts to adapt to IR4.0 as an effort to achieve Al Falah. This will give insight to Muslim scholars to take part in the development of IR4.0 in Malaysia since the concept of Al Falah will offer them greater motivation and purpose other than worldly matters. The paper is constructed to examine the discussion of Al Falah in publication, which manifested through Akhlaq, Ibadah, and Akidah and projected it in every benefit and challenge brought by IR4.0, which are productivity and efficiency, technological unemployment, and skills gap. The discussion showed that as the concept of Al Falah embedded in every aspect highlighted, the benefits of IR4.0 might bloom many other advantages as Al Falah not only aim for material gain but also promotes good morality, persistence, and determination, which will boost success. It also shows that the drawback of IR4.0 may be minimized since the community's welfare is put forward than personal goals. Understanding the concept will motivate Muslims to work harder, set the right goals, and offer more than expected. All of these traits will help the adaptation and adoption of IR4.0 technologies.

The internal control (IC) practices are one of mechanisms to ensure the effectiveness of the operation, comply with policy and law, and protect the assets (equity) of the shareholders. All of these objectives of IC practices are in line with Maqasid Shariah. This paper attempts to assess whether the five dimensions of Internal Control Practices, namely control environment, risk assessment, control activities, information and communication and monitoring of nonprofit Islamic organization are in line with the objectives of Maqasid Shariah. By applying the reviewing for all related literature and contents internal control and Maqasid Shariah. This paper discusses the five practices of internal control in light of the Maqasid Shariah perspective by utilizing the prior literatures and available data from library search and survey.

Internet Financial Reporting is the use of corporations’ websites in disseminating financial information. Numerous advantages offered by internet financial reporting as the latest and modern tools for business reporting as compared to conventional way of reporting reflects to irrefutable, increase and extensive use of internet financial reporting amongst corporations in emerging economics countries. The quality of financial reporting is influenced by the corporate governance practiced by the corporations. Strong corporate governance is said to inspire companies to have better quality of financial reporting. This study attempts to investigate the affiliation between specific corporate governance characteristics and the extent of internet financial reporting espousal by 100 top Malaysia public listed companies listed by the Minority Shareholders Watch Group (MSWG). Data is analyzed by using multiple regression. The study revealed that internet financial reporting by the corporations are significantly influenced by characteristics of corporate governance namely board meeting and board size in a positive way. However, board diversity, audit committee financial expert and board independence are found to be insignificant in inspiring practice of internet financial reporting amongst the corporations. The study provides empirical evidence on the contribution of board meeting and board size on internet financial reporting based on the perspective of Malaysian public listed companies.