Developing ethical investment criteria based on Maqasid Shariah

Islamic microfinance is one of the instruments that has been scientifically demonstrated to help the poor and needy. The instrument aims to help the underprivileged by giving them access to financing based on Shariah principles for lucrative activities, primarily small and micro-businesses. Notwithstanding that the Islamic microfinance providers claim that they comply with the Islamic rulings (hukm), little attention has been paid to the extent to which the practice addresses the maqasid (objectives) shariah. Such claim of Shariah-compliant practice will be rendered meaningless if maqasid shariah are not realised. Hence, the present paper aims to explore the significance and prospects of the Islamic microfinance practice from the standpoint of maqasid shariah. The library research, inductive, deductive and analytical techniques are employed consistently. The findings reveal that Islamic microfinance has a significant roles in realising the major maqasid shariah, namely: safeguarding the religion, human life, intellect wealth and progeny. These prospects convey the perception that much effort needs to be done to encourage the offering of Islamic microfinancial products at the Islamic finance sectors at large. Future studies may propose maqasid shariah guidelines for the better practice of Islamic microfinance. Keywords: Islamic Microfinance, Maqasid Shariah, Poor Population, Prospects

This research aims to find out how much research on maqasid sharia and its coverage based on journals published with the theme "Maqasid Sharia in Economic Context". This research uses various scientific journals as data sources. By using keywords to find publications in the Dimensions database with the phrase "Maqasid Shariah". There are 660 journal articles from that have been published which is in line with the topic. Trends in publication development were used to analyze information relating to the study's subject using the bibliometric-displaying software VOSviewer by using meta-analysis technique. There are several keywords that are classified into four clusters. In the first cluster there are 24 words that can be grouped into the theme "Application of Maqasid Sharia Principles in Modern Cases". In the second cluster there are 15 words that are grouped into the theme "Sustainability Economics in Covid-19 Pandemic and Maqasid Sharia". The third cluster has 12 words related to the theme "Wealth Protection in Islamic Perspective and Maqasid Shariah". The last is cluster four which consists of 10 words related to the theme "Islamic Banking and Maqasid Shariah".

Organizations have begun to realize how important talent management is for improving firm competitiveness. However, talent management is seen being uncommon in Islamic financial institutions. In addition, since Maqasid Shariah is the foundation upon which Islamic financial institutions are operated, Maqasid Shariah values must also be reflected in talent management. The study aims to examine the role of talent management (TM), Maqasid Shariah (MS), leadership, and organizational commitment (OC) in increasing the firm competitiveness of Islamic banks (IBs) in Indonesia. The study uses a quantitative approach by collecting data from 370 employees of Islamic Banks in Indonesia. The data was analyzed using Structural Equation Modeling-Partial Least Square. The finding shows that talent management has a positive impact on Maqasid Shariah, leadership, organizational commitment, while those variables also play an important role as mediating variables toward firm competitiveness. It also supports that Maqasid Shariah affect the leadership. The study provides important insight into talent management practice, particularly in the Islamic banking industry. The study also provides a reference for the management of Islamic Banks, Islamic banks practitioners, and regulatory authorities in making policies related to the talent management system to increase their competitive advantage in the disruptive era. Furthermore, academicians can use this study's findings to build curricula for higher education institutions that would better connect with industry needs and produce qualified graduates who can compete on a global scale.

The core aim of the study is to analyze the new challenges in Islamic finance related to the modern financial technology like meta-verse, crypto-currency and digital lending. Moreover, this study affirms how Shariah principles provide solution to the problems of financial technology in today’s material world. On the basis of critical analysis of previous studies, it clarifies that there are number of digital method of transactions are being used. Most of previous studies are based on the detailed study of previous research on financial technology and its challenges faced by the Muslim world. The findings affirms that one of the most important tools to provide solution to the challenges in Islamic finance is Maqasid Al Syariah and its principles that are inspired by Maqasid Shariah, such as Fin-Tech Meta-verse, cryptocurrency, digital lending which are grand issues of today. The study exhibits the influence of novel challenges in Islamic economics and finance associated with innovative financial technology. The future of Fin-Tech in Islamic perspective is very bright. Mobile phones and digitalization have smoothened the way for Fin-Tech in Islamic countries. These opportunities are accompanied by the problems such as regulations for Islamic Fin-Tech companies and lack of authentic research in Shariah Fin-Tech. This study focuses the importance of Islamic finance to deliver interpretations to the original financial trials in Fin-Technology, crypto-currency, Meta-verse and Digital Lending. This outcome is support to the shariah agreement financial public services in practical world over artificial intelligence and blockchain. This study has effectively perceived the major advantage of Sharia Fintech contributing to defeat the criminal digital lending traditions.

Investments which are considered beneficial for the economy have caused controversy in the Indonesian society when the government enacted the Peraturan Presiden Nomor 10 Tahun 2021, which contains an article on alcohol-related investments. This study analysed the relationship between government policies and public figure responses relating to alcohol-related investments in Indonesia based on the Maqasid Shariah approach. This study used content analysis methodology and data were obtained by analysing documents, online media information and check lists. Two experts in Islamic Economics were involved and Cohen’s Kappa test was used to measure inter-rater reliability for qualitative (categorical) items, which yielded a score of 1 for each expert. Study data analysis was carried out descriptively and thematically. Findings show that policies to encourage investments considered beneficial for the economy have in fact, harmed the Indonesian society in general because the policies are contrary to the principles of Maqasid Shariah. The Muslim society believes that alcohol investments are detrimental to the country. The implications appear in the form of policies contradicting the maslahah (public interest) of the society, public rejection of investment policies, and rescinding of the government’s investment policies. Therefore, this study recommends that governments, in this case Indonesian government, should consider the Maqasid Shariah principles when formulating policies, especially those concerning the wider community, in the future.

This study aims to examine the influence of Islamic Corporate Governance on the performance of Maqasid Shariah in Islamic Commercial Banks in Indonesia. The performance of Maqasid Shariah is measured using the Maqasid Shariah Index, which consists of three main dimensions: educating individuals, establishing justice, and promoting public interest. The independent variables in this study include components of Islamic Corporate Governance, namely the Board of Commissioners, the Sharia Supervisory Board, and Independent Commissioners. Firm size and firm age are employed as control variables. The study uses a sample of Islamic Commercial Banks in Indonesia that are registered with the Financial Services Authority (OJK) during the period of 2021–2023, with a total of 33 data observations. Data analysis was conducted using panel data regression with the Stata 17 application. The results indicate that the Board of Commissioners and Independent Commissioners do not have a significant effect on Maqasid Shariah performance, while the Sharia Supervisory Board has a significant negative effect on the Maqasid Shariah performance of Islamic Commercial Banks in Indonesia registered with the Financial Services Authority (OJK).

This study presents a comprehensive narrative review of contemporary developments, challenges, and prospects in Islamic finance and banking, particularly within developing economies. The research aims to evaluate the sector's effectiveness in promoting financial inclusion, ethical investment, and sustainable development. Using a structured search methodology across Scopus, Google Scholar, and DOAJ, relevant literature was selected based on thematic keywords and inclusion criteria focusing on empirical studies and policy-oriented analysis. Key findings indicate that Islamic financial literacy strongly influences investment behavior among Muslim investors by reducing perceived risk and aligning investment choices with ethical values. Shariah governance, particularly the role of Supervisory Boards, is pivotal but faces implementation disparities across countries. Product innovation in markets like Malaysia and Indonesia exemplifies the sector's responsiveness to financial modernization while adhering to Shariah principles. Moreover, Islamic finance aligns with sustainable development goals through instruments such as green sukuk and zakat, offering ethical alternatives for environmental and social financing. Systemic challenges persist, including inconsistent regulatory environments, limited public understanding, and fragmented interpretations of Shariah law. To address these, the study recommends enhancing regulatory alignment, promoting public education, and strengthening institutional collaboration. These findings underscore the transformative potential of Islamic finance in achieving inclusive and sustainable economic outcomes.

This paper aims to examine the practice of credit evaluation by Islamic banking in evaluating financing proposals from the SMEs in Malaysia. Also, how the approach of Maqasid Shariah which encompasses of religion, life, lineage, intellect and property influencing the application of credit evaluation from the SMEs. This paper measures credit evaluation on Islamic banks based on review of literature; the inputs are extracted from the existing relevant studies on the subject matter. The findings reveal that that the elements of Maqasid Shariah are not being considered meticulously for credit evaluation processes. The Maqasid Shariah approach in credit evaluation could bring significant values for SMEs in securing financing. This novel study significantly focuses on how the SMEs in Malaysia process the credit evaluation based on the CAMPARI model while adapting the concept of Maqasid Shariah. As this conceptual paper focuses on the previous research and existing available data, the paper is a stepping-stone that enables the researchers to obtain an inclusive and complete perspective and solutions for both Islamic banking system and their customers.

Shariah governance practice is a vital component of the organizational arrangement of IBIs through which the business affairs of IBIs are examined, certified and monitored. It plays a crucial role to legitimize the business of IBIs. In Pakistan, SBP regulates the practice of Shariah governance through a dedicated department with the aid of its SAC and executes it through Shariah boards of IBIs. Applying descriptive analytical approach, the study has described the current state of Shariah governance practice of IBIs. It is the outcome of the regulatory arrangements in the form of regulatory guidelines, directives, standards and frameworks which have been issued during the last two decades by SBP to standardize the practice of Shariah governance for IBIs in Pakistan. The study highlights the formation of the regulatory arrangement which not only depicts the role of SBP, but it also illustrates the functions of SAC and the responsibilities of Shariah boards at IBIs. The study also attempts to confine the regulatory, advisory and supervisory roles of the SBP, the SAC and the Shariah board of IBIs respectively. An analytical review of the roles of these bodies which are defined through the regulatory arrangements facilitates to discover the loopholes in the current regulatory arrangement for Shariah governance of IBIs. Although, attempts have been made to address the issues in this regard by some writers but in case of Pakistan, the issues are yet to be identified. The study has found that the regulatory arrangement of Shariah governance practice has been constituted significantly by the SBP. However, composition, affiliation and independence of Shariah bodies at central bank and the institutional level are the aspects which pose regulatory issues in the current arrangement. Therefore, the study has discovered some possible solutions for these issues and proposes them for regulatory enhancements. It suggests that the SBP as central regulatory authority should specify regulations over the composition of SAC at SBP level to augment the regulatory and advisory process for Shariah governance practice of IBIs. It recommends that the number of the members at SAC as well as at the Shariah boards of IBIs should be maximized. The two bodies should have additional qualified members especially the number of Shariah qualified members need to be increased. It also proposes that the nomenclature of each body should be defined separately because referring with various names for each body or using their names interchangeably could cause confusion. In addition, the members of SAC and the institutional Shariah boards should be barred from having multiple Shariah boards affiliations through specific regulations. It also recommends that the Shariah boards member must play their supervisory roles independently without any undue influence from the executives. So, a specific set of regulations is required which could guarantee the independence of Shariah boards of IBIs. The proposed recommendations of the study will not only facilitate the regulatory authority to revisit its arrangement and include conclusive measures, but they will also assist the industry to enhance the productivity of their Shariah board members. It will also assist the industry to establish an environment where contribution of the Shariah qualified members and their effective role would strengthen the marketability and credibility of the Shariah governance practice in the Islamic banking industry. Ultimately, a balanced, conclusive and enhanced regulatory arrangement for Shariah governance practice of IBIs would standardize the practice of Shariah governance at the domestic level as well as it could be harmonized with the international best practices of the Islamic banking industry.

In the last decade, the Islamic Bank (IB) has been contributing to global financial development. There are inconclusive results about the function of IB to meet Islamic Finance ethics, particularly sustainability from the IB perspective (called Maqasid Shariah-MS). This paper aims to contribute to the basic research question: does sustainability matter in improving competition in IB financing? This study developed an advanced empirical model from previous theoretical studies that separated IB behavior using MS or less MS. To distinguish this effect, this study employed causal inference with Instrumental Variable (IV) analysis. The IV-Probit was applied to conduct a simulated treatment effect analysis accordingly. The dataset was obtained and combined from two global IB sustainability indicators and comprehensive financial statements of IB across 35 banks in 12 countries. The results confirm that applying IB in different MS with similar increasing level of competition produce different growth of financing. The IB with MS has larger financing than less MS. These results confirm that sustainability matters for improving competition and financing growth.

This research analyzes the financial performance of Islamic Commercial Banks (Bank Umum Syariah) in Indonesia during 2022 using the Maqasid Shariah Index (MSI) framework. The MSI method, rooted in Islamic jurisprudence, evaluates bank performance in line with three objectives of Shariah: education, justice, and welfare. This study involves six major Islamic banks: Bank Syariah Indonesia, Bank Muamalat Indonesia, BCA Syariah, Aladin Syariah, Syariah Bukopin, and Mega Syariah. Data from annual reports and secondary sources were analyzed using the Simple Additive Weighting (SAW) method, assessing ten key financial ratios corresponding to Maqasid Shariah principles. The findings suggest that despite challenges in 2022, banks achieved variable success in different Shariah goals, with recommendations to enhance educational contributions and promote justice to improve overall performance. These insights offer valuable considerations for future regulation and development of Islamic banking in Indonesia.

Coronavirus diseases or COVID-19 that initially started in Wuhan, China in 2019 had infected almost 80 million people around the globe. This outbreak has affected people in all aspects of life by forcing people to limit their normal daily life activities in order to combat the spread of the disease. Businesses are struggling to survive, unemployment arises but at the same time, people are obliged to pay expenses such as installments on their financings from financial institutions. Bank Negara Malaysia had introduced robust measures to soften the blow of the pandemic. During the Global Financial Crisis in 2008, Islamic finance has proven to be resilient and managed to survive the crisis without much substantial impact. However, the impact of COVID-19 is unprecedented and gives no exception to Islamic Finance. The purpose of this paper is to analyse the relief measures of Islamic finance in combating the adverse impacts of COVID-19 in Malaysia. The methodology adopted is doctrinal analysis. This is qualitative research. The research will be conducted to investigate the factual consequences and their effect on society. The significance of this study is to build greater resilience of Islamic Finance during this pandemic crisis, as well as in the post-COVID-19 environment. Findings disclose that Islamic finance faces liquidity issues, regulatory and digital challenges during this pandemic. Islamic finance must be value-driven and impact-focused to deliver Maqasid Shariah. Relief measures available include Financial technologies that enable Islamic Social finance instruments easily accessible during COVID-19 and Sukuk issuance to help micro-entrepreneurs and micro-businesses (SMEs). Shariah Advisory of Bank Negara Malaysia rulings on practices of restructuring documentation shows the flexibility of the Islamic Finance to adapt to the impact of post-Covid-19. Islamic finance should develop new jurisprudence under the preamble of Maqasid Shariah as a solution to overcome the impacts caused by COVID-19.

The main aim of this article is to examine the role of board of directors and Shariah supervisory board on the strategic market positioning of Islamic banks in GCC Region. The generalized least squares (GLS) method is used to investigate the relationship between the study variables. The study sample included 235 yearly observations of 24 Islamic banks publicly traded in the financial markets in GCC Region for 10 years period from 2010 to 2019. The main results indicate that two characteristics of the board of directors specifically: size and independence, and three attributes of the Shariah supervisory board, namely, size, education level, and expertise, have significant effects on the strategic market positioning of Islamic banks in GCC Region. These results have implications for regulators and policy makers in relation to the board of directors and Shariah supervisory board in GCC Region in terms of number of board members as well as independent board members and in terms of Shariah board size, education level, and expertise. The article proposes recommendations for Islamic banks to improve their strategic market positioning and concludes with suggestions for future studies.

PurposeThe main objective of the present study is to investigate the influence of Islamic goals (i.e. the preservation of religion, life, intellect, progeny and wealth), known as Maqasid Shariah, on the sustainable lifestyles of people in Malaysia.Design/methodology/approachDrawing upon the integration of Maqasid Shariah and the value-belief-norm theory, this study conducted a national survey (N = 682) and in-depth interviews (N = 18) with key Islamic leaders, environmental non-governmental organizations and Malaysian citizens.FindingsOur findings show three out of the five Shariah goals, namely preserving religion, life, intellect, progeny and wealth, have a significant impact on a sustainable lifestyle in Malaysia. This suggests that the emphasis should be given to enriching Malaysian’s understanding on the connection between preserving religion and progeny to sustainable lifestyle. Our results from in-depth interviews further reinforce the importance of Maqasid Shariah as a guide for sustainable lifestyle and the crucial role of education in promoting the values.Practical implicationsThis study highlights the role of education in promoting the Maqasid Shariah to foster sustainable lifestyles and provides policymakers with valuable insights for crafting policies related to sustainable living.Originality/valueThis study contributes to the development of the field of Islam and sustainability in Malaysia, which has received less attention in research.

This chapter is an introduction to the history of the formation of guilds and how they connect them to the religious and social structures that molded them. The craft-guilds are one of the most interesting and characteristic phenomena of medieval Muslim civilization. The guild in Muslim life was built essentially on the idea of the market and based on the needs of the guildsmen. Many different countries officially claim their commitment to Islam and Islamic economics. However, Islam and Islamic economic systems differ significantly from one country to another. Analysis of the Islamic economic system is impossible without a clear understanding of the legal parameters that shaped such a system. The legal foundation of the Islamic society, known as Shari'a, is considered eternally valid and applicable to all times and places. Islamic laws not only provide society with collections of laws and prescriptions which indicate the Islamic path, they also focus on specific human activities and classify them according to their degree of desirability from God's perspective. Different viewpoints on the relationship between religion, culture, and economic performance are investigated here. Finally, the role of the central bank and Islamic banking and finance will be discussed in detail. While Islamic banks play roles similar to conventional banks, fundamental differences exist between the two models. The main difference between Islamic and conventional banks is that the former operate in accordance with the rules of Shari'a, the legal code of Islam. The central concept in Islamic banking and finance is justice, which is achieved mainly through the sharing of risk. Stakeholders are supposed to share profits and losses, and charging interest is prohibited.