Azniza Hartini Azrai Azaimi Ambrose and Fadhilah Abdullah Asuhaimi
The purpose of this paper is to comprehensively discuss the issue of risk vis-à-vis the perpetuity restriction principle inherent in waqf (Islamic endowment). Specifically, it…
Abstract
Purpose
The purpose of this paper is to comprehensively discuss the issue of risk vis-à-vis the perpetuity restriction principle inherent in waqf (Islamic endowment). Specifically, it attempts to consolidate the axioms in both conventional and Islamic finance, such as the risk-return trade-off and al-ghunm bi al-ghurm (liability accompanies gain), with the perpetual nature of waqf. Overall, this paper attempts to find a resolution to the dilemma of perpetuity restriction inherent in cash waqf against the natural occurrence of the risk.
Design/methodology/approach
This paper is based on the secondary research methodology; past literature encompassing journal articles, books, relevant financial axioms, fatwas (Islamic rulings) and state enactments is critically reviewed to present its case. In regard to state enactments, only Malaysian state enactments have been used, thus restricting the study to the Malaysian case only.
Findings
This study contends that the dilemma of the perpetuity restriction and the natural occurrence of risk can be resolved through the integration of waqf risk management, especially concerning cash waqf, with the Islamic spiritual approach. By implementing standard operating procedures that inculcate awareness on waqf risk management and Islamic spirituality in waqf stakeholders (wāqif (donor), trustee and beneficiaries), the stakeholders may accept the reality of risk that is inevitable even after all efforts have been exhausted. In other words, the violation of perpetuity is exonerated given that mental faculties aligned with revealed texts have been exhaustively used beforehand.
Practical implications
Findings from this study may broaden the choice of investment avenues for waqf trustees while adhering to the perpetual restriction of waqf. More importantly, waqf trustees will not be forced to invest in interest-bearing securities or be involved in any usurious transactions just to obtain guaranteed returns and preserve the corpus of waqf.
Originality/value
This study offers a unique perspective on cash waqf risk management by re-analyzing the axioms and concepts of finance and waqf while observing the welfare of the beneficiaries.
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Mohd Azizi Ibrahim, Alias Mat Nor and Raja Rizal Iskandar Raja Hisham
This research aims to investigate the factors that can influence Bumiputera contractors’ acceptance of the Contractor’s All Risks (CAR) takāful (Islamic insurance) product using…
Abstract
Purpose
This research aims to investigate the factors that can influence Bumiputera contractors’ acceptance of the Contractor’s All Risks (CAR) takāful (Islamic insurance) product using the theory of reasoned action (TRA).
Design/methodology/approach
Using the method of quantitative surveys, 414 questionnaires were collected from targeted Bumiputera contractors in Malaysia (grade G1 to grade G7), except in Sabah and Sarawak, that are registered with the Construction Industry Development Board (CIDB) and are also members of Persatuan Kontraktor Melayu Malaysia (PKMM). The data was analysed using the partial least squares structural equation modeling (PLS-SEM) technique.
Findings
The findings from the PLS-SEM analysis show that attitude, subjective norm, religiosity and awareness have a positive relationship with Bumiputera contractors’ acceptance of the CAR takāful product. Religiosity appeared to be the most significant factor influencing Bumiputera contractors’ acceptance of the CAR takāful product.
Research limitations/implications
The respondents in this study only comprised Bumiputera contractors in Peninsular Malaysia, excluding those from Sabah and Sarawak. Therefore, it is not possible to generalise the findings to a broader population.
Practical implications
Takāful operators and their sales and marketing departments need to act proactively in promoting the benefits of investing in CAR takāful that follows Sharīʾah (Islamic law) rules and principles. They should create mechanisms to market CAR takāful better, thus accelerating its acceptance rate among contractors.
Originality/value
The paper uses the proposed extended TRA model, which includes the variables of religiosity and awareness in the TRA model. These variables were successfully integrated in the model, and the findings show that they have significantly contributed to the acceptance of the CAR takāful product among Bumiputera contractors.
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Keywords
Munawwaruzzaman Mahmud, Muhammad Hisyam Hassan and Nur Fathin Khairul Anuar
The purpose of this paper is to analyze the issue of bayʿ wa salaf (the combination of sale and loan contracts in a single arrangement) from the Sharīʿah perspective. Based on the…
Abstract
Purpose
The purpose of this paper is to analyze the issue of bayʿ wa salaf (the combination of sale and loan contracts in a single arrangement) from the Sharīʿah perspective. Based on the Sharīʿah findings on the issue, the paper examines the existing Islamic banking products and services that use these two specific contracts to determine whether the current practice is in line with Sharīʿah.
Design/methodology/approach
The paper uses the qualitative method by reviewing and analyzing relevant literature and operational structures to comprehend the issues pertaining to bayʿ (sale) and salaf (loan). It then provides Sharīʿah parameters for bayʿ wa salaf before applying them in assessing some existing Islamic banking products and practices. Subsequently, the compliance status of the banking operations that use these contracts in a specific product structure can be ascertained.
Findings
The paper finds that the bayʿ wa salaf arrangement in the existing Islamic banking products and services, as elaborated in the paper, does not fall under the prohibited category. This deduction is made in accordance with the parameters derived from jurists’ discussion on the issue of bayʿ wa salaf. It also takes into consideration other factors influencing the existence of such arrangements.
Research limitations/implications
This conceptual research highlights the jurists’ discussion on the issue of bayʿ wa salaf and the compliance status of the current products and services that use the contracts in a single arrangement (specifically in the case of Malaysia) without discussing other possible structures that can be applied as an alternative to the bayʿ wa salaf arrangement.
Practical implications
Thorough understanding of the issue can strengthen the industry’s confidence in executing operations that conform to Sharīʿah principles.
Originality/value
The paper provides comprehensive deliberation on the ruling of bayʿ wa salaf from various schools of thought and exhaustive elaboration on existing Islamic banking products that apply bayʿ wa salaf in their structures. This contributes in reinforcing the stakeholders’ confidence in the operations of Islamic banking and finance.