This book addresses the theory, practices, challenges, key issues and potential future policies concerning investment and wealth management in connection with Islamic finance. There is a noted scarcity of literature on Islamic approaches towards wealth management from a jurisprudential perspective, and so this book aims to address this lacuna in available literature. It demonstrates strategies for wealth management in keeping with the Qur’an and Sunn’ah, posing questions relating to interest and investment, and proposing financial models for benefiting the poorer segments of society while simultaneously satisfying economic necessities in keeping with Islamic law. Given its breadth of scope, combining perspectives from scholars and practitioners with extensive experience in the banking and finance sector from different Islamic settings including Malaysia, Saudi Arabia, Sri Lanka, Brunei and Indonesia, this edited volume will benefit practitioners, researchers, and graduate students studying finance, economics and business management in an Islamic context.
Author(s): Toseef Azid, Murniati Mukhlisin, Othman Altwijry
Publisher: Springer
Year: 2022
Language: English
Pages: 414
City: Singapore
Foreword
Preface
Contents
Editors and Contributors
List of Figures
List of Tables
1 Wealth Management and Investment: An Islamic Epistemology
1.1 Epistemology of Wealth and Wealth Management in the Islamic Framework
1.2 Islamic Concept of Wealth
1.2.1 The Concept of Profit in Islam
1.3 Types of Wealth
1.3.1 Corrupt Wealth (Impure Wealth)
1.3.2 Clean Wealth (Purified Wealth)
1.3.3 General Purpose Wealth
1.3.4 Special Purpose Wealth
1.3.5 Mental Account and Wealth
1.4 Islamic Wealth Management
1.4.1 Islamic Wealth Management Industry
1.4.2 Role of Wealth Manager
1.4.3 Wealth and Philanthropy, Free or Regulated Market
1.4.4 Financial Therapy
1.5 Role of State
1.6 Gift Economy and Gift Exchange in the Islamic Framework
1.7 Conclusion
References
Part I Principles of Islamic Wealth Management
2 Decoding Islamic Wealth Management from Qur’anic Texts
2.1 The Qur’an as the Primer Source of Islamic Economic Thought
2.1.1 Previous Works of Literature
2.2 Methodology of the Study
2.3 Result and Discussion
2.3.1 Wealth Management in the Qur’an
2.4 Proposed Concept of Islamic Wealth Management
2.5 Conclusion
References
3 Islam, Spirituality and Wealth: Islamic Framework of Wealth Management
3.1 Wealth Within Islamic Purview
3.2 Wealth and Spirituality: A Shari’ah Perspective
3.3 An Islamic Framework of Wealth Management
3.4 Conclusion and Recommendations
References
4 Islamic Investment-Cum-Wealth Management: Politics, Warfare and Welfare
4.1 Islamic Institutional Framework and Islamic Principles of Wealth Management-Cum-Investment
4.2 Islamic Investment and Wealth Management Amidst the Islamic Sustainable Development
4.2.1 The Islamic Transmission Mechanism for Realizing Sustainable Development
4.3 Universal Islamic Divine Civilized Politics of Wealth-Welfare Nexus Versus the Secular Mundane Amoral Barbaric Nationalistic Politics of Wealth-Warfare Nexus
4.4 Epilogue and Policy Implications-Cum-Recommendations
References
5 Wealth Creation and Management in Islam
5.1 Concept of Wealth in Islam
5.2 Islamic Wealth Management (IWM)
5.3 The Wealth Cycle
5.3.1 Wealth Creation
5.3.2 Islamic Rules with Regards to Wealth Creation
5.3.3 Wealth Enhancement
5.3.4 Wealth Protection
5.3.5 Wealth Distribution
5.3.6 Wealth Distribution - Charity
5.3.7 A Comparative View of Poverty Alleviation Instruments in Islam
5.3.8 Wealth Distribution—Estate Management
5.4 The Future of Wealth Creation and Management in Islam
5.5 Conclusion
References
6 Investment and Wealth Management in Contemporary Times: Zakat as a Viable Approach
6.1 An Overview of Investment and Wealth Management
6.2 Islam, Investment, and Wealth Management
6.2.1 What is Zakat?
6.3 Zakat as Investment and Wealth Management Tool
6.4 Conclusion
References
7 The Urgency of Debt Management in the Perspective of Islamic Wealth Management
7.1 Debt, Need or Lifestyle
7.2 Debt in Wealth Management
7.3 Debt on Islamic Perspective
7.4 Conditions Permitted to Have Debts
7.5 Islam Solution Toward Debt Trap
7.6 Conclusions
References
Part II Applications of Islamic Wealth Management
8 Project Financing Models for Small Medium Property Enterprises in the Framework of Maqasid Al-Shari’ah
8.1 Project Financing
8.1.1 Fundamental Elements in Project Financing
8.1.2 Project Finance within the Maqasid Al-Shari’ah Framework
8.2 Method
8.3 Result and Discussion
8.4 Conclusion
References
9 The Effects of Fixed Return Instruments on Investment Decisions in Islamic Economics: Using Stochastic Mathematical Model
9.1 Stochastic Modeling of Investment Decisions
9.2 Investment Decisions in Islamic Economics
9.2.1 Modeling Sukuk as a Fixed Return Bond
9.2.2 Portfolio Choice with no Fixed Return Instrument
9.2.3 Investment Decisions Considering Sukuk Characteristics
9.3 Comparing Optimal Path of Different Models
9.3.1 Optimal Path of Wealth
9.3.2 Optimal Path of Consumption
9.3.3 Optimal Path of Utility
9.3.4 Optimal Path of Welfare
9.4 Conclusion
Appendix 9.1 Finding the Form of Value Function
References
10 Family Financial Management in Realizing Sakinah Family
10.1 Background of the Problem
10.2 Literatures on Eight Principles
10.3 Discussion on Model of Family Finance
10.4 Managing Income
10.5 Managing Needs
10.6 Managing Dreams
10.7 Monitoring
10.8 Conclusion and Recommendation for Future Research
References
Part III Country Experiences
11 Measuring the Impact of Open Innovation on Firm Performance in Indonesia Halal Industry
11.1 Innovation and Performance
11.1.1 Open Innovation
11.1.2 Firm Performance
11.2 Method
11.2.1 Data and Sample
11.2.2 Data Measurement
11.3 Result and Discussion
11.4 Conclusion
References
12 How Does Accounting Play a Role in Islamic Microfinance and Islamic Wealth Management Practices? Case Studies in Indonesia, Pakistan and Egypt
12.1 Islamic Accounting, Microfinance and Islamic Wealth Management
12.2 Participatory Action Research (PAR) Approach
12.2.1 Research Instruments
12.3 PAR Findings
12.3.1 Program Realization
12.3.2 Akhuwat, Pakistan (25–30 November 2018 and 11–15 March 2019)
12.3.3 Rizqi Chapter Jameel, Egypt (3–8 February 2019 and 11–15 March 2019)
12.4 Comparison_Analysis
12.4.1 Indonesian and Pakistani Respondents
12.4.2 Age Range
12.4.3 Level of Education
12.4.4 Profession
12.4.5 Conclusions and Recommendations for Further Research
References
13 Social Impact Sukūk: Implications from the Notion of Maslaha
13.1 The Principle of Maslaha in Islamic Finance
13.2 The Current Status of Sukūk Instruments and the Market
13.3 Sukūk Structure—From Generic to SRI
13.4 Discussion and Conclusions
References
14 Religion, Islamic Values and Debt Management, the Malaysian Experience
14.1 Islam and Debt Management Behaviour
14.2 Religiosity Measurement
14.3 Measurements for Debt Management Awareness and Behaviour
14.4 Findings
14.5 Conclusion
References
15 Prospects and Challenges for Islamic Investment and Wealth Management in Mauritius
15.1 Mauritius as an International Financial Centre
15.2 Historical Development of Islamic Finance in Mauritius
15.3 Prospects for Developing Mauritius as an IIWM Destination
15.3.1 Islamic Product Development
15.4 Challenges and Opportunities in Positioning Mauritius as an IIWM Destination
15.4.1 Demand Side
15.4.2 Supply Side
15.5 Conclusion and Way Forward in Brightening the Future of Mauritius as an IIWM Centre
References
16 Sustainability, Sharī‘ah Governance and Financial Performance: Evidence from Companies Listed on the Jakarta Islamic Index
16.1 Sustainability and Corporate Financial Performance
16.2 Sharī‘ah Compliance and Corporate Financial Performance
16.3 Conceptual Framework
16.3.1 Methodology
16.4 Results and Discussions
16.5 Conclusion
Appendix
References
17 When It Comes to Risk, is Sukuk Better Than Conventional Bonds? A Comparative Study of NASDAQ Securities
17.1 Data and Method
17.1.1 Data Analysis
17.1.2 Value at Risk Method
17.2 Analysis
17.2.1 Descriptive Statistics of Sukuk and Conventional Bonds
17.2.2 Historical Simulation Results
17.2.3 Monte Carlo Simulation Method
17.2.4 Comparing VaR Results of Historical and Monte Carlo Simulation
17.3 Conclusion
Appendices
Appendix 1
Appendix 2
Appendix 3
Appendix 4
References
18 COVID-19 Pandemic and ‘KITA JAGA KITA’: Appraisal of Social Responsible Practices of Islamic Banking Institutions in Malaysia
18.1 Malaysian Government and Bank Negara COVID-19 Economic Stimulus, Relief and Financing Packages
18.2 Social Responsible Practices of Malaysian Islamic Banking Institutions
18.3 Conclusion
References
Part IV Waqf: An Ethical Investment
19 Waqf as a Financing Tool and Its Role in Achieving SDGs and Foreseeing the Future
19.1 Concept of Sustainability in Islamic Economic Thoughts
19.1.1 Sustainability Development Goals
19.2 The Capacity of Waqf to Accommodate Advance Levels of SDGs
19.2.1 Waqf Aims at Ending Poverty in All Its Forms Everywhere
19.2.2 Waqf Aims at Ending Hunger, Achieving Good Security and Improved Nutrition and Promote Sustainable Agriculture
19.2.3 Waqf Ensures Healthy Lives and Promotes Well-Being for All Parts of Society
19.2.4 Waqf in the Islamic Civilization Have Provided Free and Quality Education for All Parts of Society
19.2.5 The Role of Waqf in Caring for Woman and Its Role in Woman Empowerment
19.2.6 The Role of Waqf in Ensuring Availability and Sustainable Management of Water for Irrigation and Sanitation for All
19.2.7 Ensuring Access to Affordable, Reliable, Sustainable, and Modern Energy for All
19.2.8 Developing Social Capital and Building Resilient Infrastructure
19.2.9 Contribution of Waqf to Achieving Sustainable Industrialization
19.2.10 Waqf Promotes Peace and Security Mentally, Socially, and Economically
19.2.11 Waqf Helps in Protecting Freedom, Justice, and Human Dignity
19.2.12 The Environmental Role of Waqf
19.2.13 Conserving and Protecting the Environment, Oceans, Biodiversity, and the Ecosystem
19.2.14 Sustainable Consumption, Production Patters, and Sustainability Cities and Human Settlements
19.3 Recommendations for Operationalizing Waqf to Achieve SDGs
19.4 Conclusion
Bibliography
20 Blended Finance and the Role of Waqf Bank: Shaping the SDGs in Indonesia
20.1 Blended Finance and Its Principles
20.2 Waqf Bank: How It Works?
20.3 Modelling Waqf Bank Based Blended Finance for SDGs in Indonesia
20.4 Conclusion
References
21 Waqf Contributions for Sustainable Development Goals: A Critical Appraisal
21.1 Islamic Social Finance
21.1.1 Overview of Waqf and Cash Waqf
21.1.2 Waqf Sukuk: The Practical Implementation of Cash Waqf
21.1.3 Waqf Contributions to Achieving SDGs: Selected Cases
21.1.3.1 Case One: Waqf Contributions to SDGs in the Republic of Turkey
21.1.3.2 Case Two: Islamic Development Bank (IsDB)
21.2 Challenges Encountering Full Employment of Waqf in SDGs
21.3 Conclusion and Recommendations
Appendix A
Appendix B
References
Part V Special Issue
22 A Path Towards Success for Muslim Households: Wealth Management and Shari'ah Rulings
22.1 Shari'ah Maxims and Their Application in Finance
22.2 Debt and Muslim Households
22.3 Path of Success and Household’s Behavior
22.4 Household Assets and Islamic Financial Institutions (IFI)
22.5 Conclusion
References
