Islamic Finance, FinTech, and the Road to Sustainability: Reframing the Approach in the Post-Pandemic Era

Preface
Acknowledgments
Contents
Notes on Contributors
List of Figures
List of Tables
Islamic Finance, FinTech and the Road to Sustainability: Reframing the Approach in the Post-Pandemic Era—An Introduction
1 Introduction
2 Reframing Islamic Finance Sustainability and Socio-Economic Developments
3 Innovative Islamic Financial Tools for Sustainable and Socio-Economic Impact
4 Role of FinTech in the Road to Sustainability
Re-Framing Islamic Finance Sustainability and Socio-Economic Development
Islamic Finance and Sustainability: The Need to Reframe Notions of Shariah Compliance, Purpose, and Value
1 Introduction
2 Understanding Different Approaches Toward Sustainability
The United Nation Sustainable Development Goals
Socially Responsible Investment (SRI)
Environmental, Social, and Governance (ESG)
3 SDGs and ESG from Shariah Perspective
4 SDGs and Islamic Finance
5 Narrow Meaning of Shariah Governance and Compliance
6 Shariah Governance and Maqasid Aligned with ESG and SDGs
7 Changing Perspective from Shareholder to Stakeholder
Property Rights and Management
Structure of Shariah Governance Framework
8 Conclusion
References
Tools and Conditions for Achieving Sustainable Development in Islamic Finance
1 Introduction
2 Legal Conditions to Include IFIs in Socio-Developmental Responsibilities
3 Methods and Tools Perceived for IFIs to Address Their Social Development Responsibilities
Selection of the Financed Sector
Adopting the Appropriate Internal Policies
Type of Products
Contracts That Involve Riba
Cash Financing Contracts for Individuals and Institutions, Like Tawarruq, ‘Inah and Organized Salam
Financing Using Questionable Forms of Ijarah Muntahia Bittamleek Product
Contracts That Involve Gambling
Uncontrolled Trading of Stocks in the Stock Markets and Securities Exchange
Dealing in International Commodity Markets and Forex Using Future Contracts
4 Basic Administrative Requirements for Islamic Financial Institutions to Carry Out Their Development and Social Responsibility
5 Conclusion and Recommendations
References
Maqasid al-Shariah and Sustainable Development Goals Convergence: An Assessment of Global Best Practices
1 Introduction
2 Maqasid al-Shariah—Fundamental Basis and Implementation
3 The SDG and Maqasid al-Shariah: A Clash or Convergence?
4 Convergence Between Maqasid al-Shariah and Sustainable Development Goals
Institutional Best Practices
Singapore’s Warees Investments Pte Ltd
Supervision and Establishment
Investment and Business Operation
Social Impact
Saudi’s Alinma Investment Company
Supervision and Establishment
Investment, Business Operation, and Social Impact
Indonesia’s PT Ethis Indo Asia
Supervision and Establishment
Investment and Business Operation
The Essential—Daru 3 (Daru 3)
Hasanah City
Social Impact
COVID-19 Sukuk Issuance
Islamic Development Bank Sustainable Sukuk
The impetus for IsDB Sustainable Sukuk Issuance
Issuance of IsDB Sustainable Sukuk
IsDB Sustainable Sukuk Socio-Economic Impact
Malaysia’s Sukuk PRIHATIN
Impetus for Sukuk PRIHATIN Issuance
Issuance of Sukuk PRIHATIN
Sukuk PRIHATIN Socio-Economic Impact
Indonesia Cash Waqf Linked Sukuk
Impetus for Cash Waqf Linked Sukuk Issuance
Issuance of Cash Waqf Linked Sukuk
Cash Waqf Linked Sukuk Socio-Economic Impact
5 Recommendation
6 Conclusion
References
The Resilience of Islamic Finance Against Pandemic-Induced Future Economic Crisis
1 Introduction
2 Islamic Finance Industry and The Global Economic Effect of COVID-19
3 Resilience of The Islamic Finance Industry
4 Islamic Social Finance and Long-Term Financial Stability
5 Post-COVID Era: FinTech and Digitalization
6 Conclusion and Policy Recommendations
References
Emergence of Islamic Finance in the Fourth Industrial Revolution and COVID-19 Post-Pandemic Era
1 Introduction
2 Definition and Background of 4IR
3 4IR Relations to Islamic Finance
4 Adoption of Technology in Islamic Finance
Adoption of Technology in Islamic Banking, Takaful and Capital Markets
The 4IR vis-a-vis COVID-19: The Way Forward
5 Summary and Concluding Remarks
References
Innovative Islamic Financial Tools for Sustainable and Socio-Economic Impact
Sukuk Innovation: Powering Sustainable Finance
1 The Convergence Between ESG, Islamic Finance, and SDGs
Demand for ESG Investments
Principles-Based Convergence of Shariah, ESG and SDGs
Role of Islamic Capital Markets in Fulfilling SDGs
2 ESG Sukuk
ESG Sukuk Landscape
Development of ESG Sukuk
3 Next-Generation Innovation Through Sukuk
4 Conclusion and Outlook
References
Mobilizing Funds for Industrialization and Development Through Islamic Value System, Capital Markets, and Social Finance
1 Introduction
2 State of Underdevelopment in the Muslim World
3 State of Development Assistance in OIC Countries
4 Role of Islamic Worldview in Fostering Responsibility and Cooperation
5 Role of Sovereign Sukuk in Sourcing Development Funds
Ijārah Sukuk
Mudhārabah Sukuk
Mushārakah Sukuk
6 Role of Islamic Social Finance in Sustainable Development
Role of Zakat in Development Assistance
Role of Waqf in Mobilizing and Institutionalizing Philanthropy
7 The Budding Industry of FinTech and Industrial Revolution 4.0
8 Conclusion
References
The Role of Green Sukuk in Maqasid Al-Shariah and SDGs: Evidence from Indonesia
1 Background
2 Indonesia’s Sovereign Green Sukuk
3 Green Sukuk and Maqasid Al-Shariah
4 Green Sukuk and SDGs
5 Conclusion and Recommendations
References
Is Islamic Microfinance a Resilient Business Model During Periods of Crisis? Empirical Evidence from Arab Countries
1 Introduction
2 Related Literature and Hypotheses Development
3 Data and Methodology
Risk Measures
Variables Definitions
Diversification Measures: Income Diversification and Geographic Expansion
Control Variables
Methodology
4 Empirical Results and Discussion
Descriptive Statistics
Financial Stability of MFIs
Credit Risk and Diversification in Microfinance
The Resilience of Islamic MFIs During Crisis
5 Conclusion
References
FinTech Role in the Road to Sustainability
Digital Finance and Artificial Intelligence: Islamic Finance Challenges and Prospects
1 Introduction
2 Digital Finance: Artificial Intelligence
3 Access to Finance: Challenge for Microentrepreneurs and SMEs
Concerns with Digital Financing
4 Financial Inclusion and the Islamic Finance: Digital Adoption Backed by AI and Alternative Data
The Islamic Finance Framework for Digital Finance
Grants
Interest Free Financing
Micro Loans Through Microfinance Institutions
Micro Loan: Participatory Finance
Micro-Equity Financing
5 Financial Infrastructure: Institutional Arrangement
6 Summary and Conclusion
References
Open Banking for Financial Inclusion: Challenges and Opportunities in Muslim-Majority Countries
1 Introduction
2 Methodology
3 Financial Inclusion and Poverty Eradication
4 The Concept of Open Banking
5 Role of Open Banking in Facilitating Financial Inclusion
6 Recommendations for Muslim-Majority Countries
Appendix
References
Islamic Specialized FinTech for Inclusive and Sustainable Growth in Sub-Saharan Africa
1 Introduction
2 Sub-Saharan Africa Muslims and Religious Financial Exclusion
3 Specialized FinTech, Inclusive Growth, and the SDGs
4 Potential for Islamic FinTech in Sub-Saharan Africa
5 Challenges for Specialized Islamic FinTech in Africa
6 Conclusion and Recommendations
Appendix
References
The Role of Technology in Effective Distribution of Zakat to Poor and Needy
1 Introduction
2 Zakat Administration
3 Using Technology for Zakat Distribution
Inability to Identify and Validate the Zakat Recipients in a Transparent and Convenient Manner
Distribution of Zakat Without the Recipient Being Physically Present in Zakat Administrator’s Office
4 Recommendation: Towards a Technology Based Zakat Disbursement System Using Internet of Things (IOT)
5 Conclusion
References
Notion of Value-Added in RegTech Research Work: What Is There for Islamic Finance?
1 Introduction
2 Financial RegTech
3 Relavance of Web 3.0 to RegTech
4 Technologies Supporting Financial Regtech
5 Emergence of RegTech and Current Status
RegTech 1.0 (1967—2008)
RegTech 2.0 (2008—2018)
RegTech 3.0 (2018 Onwards)
6 What Is the Value in Financial Regtech?
7 The Existing Regulatory Structures
8 Opportunities for Islamic Finance in RegTech
9 RegTech Sandbox
10 Conclusion
References
Index