IDEAS home Printed from https://ideas.repec.org/a/spr/eurase/v12y2022i1d10.1007_s40822-022-00201-z.html
   My bibliography  Save this article

Proposed model of integrated Islamic commercial and social finance for Islamic bank in Indonesia

Author

Listed:
  • Ascarya Ascarya

    (University of Darussalam Gontor
    Institut Agama Islam Tazkia)

  • Ugi Suharto

    (University of Buraimi)

  • Jardine A. Husman

    (Bank Indonesia)

Abstract

Islamic finance essentially comprises of Islamic commercial finance (ICF) and Islamic social finance (ISF). This study aims to propose models of integrated Islamic commercial and social finance (IICSF) for Islamic bank in Indonesia using Delphi and Analytic Network Process (ANP) methods. The results propose six IICSF models for Islamic bank, and the IICSF Islamic bank should be prioritized on ICF (0.679) twice more than on ISF (0.321). The best model is Separate Baitul Maal model with integrated activities (0.221), where Islamic bank establishes separate Baitul Maal, as Amil of zakat and Nazir of waqf, to carry out all Islamic social finance activities, including zakat, infaq, waqf and other sadaqa, while the Islamic bank acts as corresponding/receiving bank of the Baitul Maal funds. The close second-best model is Corporate model with integrated activities (0.218), a corporate model, where in the corporate level zakat institution and waqf institution are established to manage Islamic social finance activities, while the Islamic bank will serve as corresponding/receiving bank of the zakat institution and the waqf institution. Even Integrated Baitul Maal model (0.162) is the ideal IICSF model for Islamic bank, it only ranked third, since this model is not yet applicable, since Islamic bank is still not allowed to become Amil of zakat and Nazir of waqf.

Suggested Citation

  • Ascarya Ascarya & Ugi Suharto & Jardine A. Husman, 2022. "Proposed model of integrated Islamic commercial and social finance for Islamic bank in Indonesia," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 12(1), pages 115-138, March.
  • Handle: RePEc:spr:eurase:v:12:y:2022:i:1:d:10.1007_s40822-022-00201-z
    DOI: 10.1007/s40822-022-00201-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40822-022-00201-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s40822-022-00201-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Thomas L. Saaty & Luis G. Vargas, 2006. "Decision Making with the Analytic Network Process," International Series in Operations Research and Management Science, Springer, number 978-0-387-33987-0, December.
    2. Ascarya, 2021. "Baitul Maal wat Tamwil as Integrated Islamic Microfinance Institution to Support SDGs," Springer Books, in: Mohd Ma'Sum Billah (ed.), Islamic Wealth and the SDGs, chapter 0, pages 175-195, Springer.
    3. repec:idn:jimfjn:v:3:y:2018:i:2:p:1-42 is not listed on IDEAS
    4. repec:idn:jimfjn:v:5:y:2019:i:2d:p:1-20 is not listed on IDEAS
    5. repec:idn:jimfjn:v:5:y:2019:i:2b:p:1-24 is not listed on IDEAS
    6. Muhammad Abdul Mannan, 2018. "Linking Islamic Commercial And Social Finance With Special Reference To Cash-Waqf As New Strategy Of Interest-Free Micro-Credit For Family Empowerment Of The Poor Towards Establishing World Social Ban," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 3(Special I), pages 1-24, May.
    7. Abdullah Mohammed Seidu, 2009. "Current Global Financial Crisis: Cause and Solution الأزمة المالية الحالية: السبب والحل," Chapters of books published by the Islamic Economics Institute, KAAU or its faculty members., in: Islamic Economics Institute (ed.),Issues in the International Financial Crisis from an Islamic Perspective-05 قضايا في الأزمة المالية الدولية من منظور إسلامي, edition 1, chapter 4, pages 26-41, King Abdulaziz University, Islamic Economics Institute..
    8. García, Valeriano F. & Cibils, Vicente Fretes & Maino, Rodolfo, 2004. "Remedy For Banking Crises: What Chicago And Islam Have In Common," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 11, pages 2-22.
    9. Mirakhor, Abbas & Krichene, Noureddine, 2009. "The Recent Crisis: Lessons for Islamic Finance," MPRA Paper 56022, University Library of Munich, Germany.
    10. Mohamed Ali Trabelsi, 2011. "The impact of the financial crisis on the global economy: can the Islamic financial system help?," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 12(1), pages 15-25, January.
    11. Mohamed Ali Trabelsi, 2011. "The impact of the financial crisis on the global economy: can the Islamic financial system help?," Journal of Risk Finance, Emerald Group Publishing, vol. 12(1), pages 15-25, January.
    12. Mohammed Najatullah Siddiqi, 2009. "Current Financial Crisis and Islamic Economics الأزمة المالية الحالية والاقتصاد الإسلامي," Chapters of books published by the Islamic Economics Institute, KAAU or its faculty members., in: Islamic Economics Institute (ed.),Issues in the International Financial Crisis from an Islamic Perspective-05 قضايا في الأزمة المالية العالمية من منظور إسلامي - 5, edition 1, chapter 1, pages 1-9, King Abdulaziz University, Islamic Economics Institute..
    13. International Association for Islamic Economics, 2009. "Economic Solutions From Islamic Finance: Position Statement of the International Association for Islamic Economics الحلول الاقتصادية من التمويل الإسلامي: بيان موقف الجمعية الدولية للاقتصاد الإسلامي," Chapters of books published by the Islamic Economics Institute, KAAU or its faculty members., in: Islamic Economics Institute (ed.),Issues in the International Financial Crisis from an Islamic Perspective-05 قضايا في الأزمة المالية الدولية من منظور إسلامي, edition 1, chapter 16, pages 265-269, King Abdulaziz University, Islamic Economics Institute..
    14. Stijn Claessens, 2010. "The Financial Crisis," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 4(2), pages 177-196, May.
    15. Thomas L. Saaty, 2006. "The Analytic Network Process," International Series in Operations Research & Management Science, in: Decision Making with the Analytic Network Process, chapter 0, pages 1-26, Springer.
    16. Mr. Stijn Claessens & Mr. Luc Laeven & Ms. Deniz O Igan & Mr. Giovanni Dell'Ariccia, 2010. "Lessons and Policy Implications from the Global Financial Crisis," IMF Working Papers 2010/044, International Monetary Fund.
    17. Ai Nur Bayinah & Muhammad Said & Munzier Suparta, 2021. "Social-Commercial Interconnection: Lessons From Bank Muamalat Indonesia & Baitulmaal Muamalat Affiliation," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 7(2), pages 341-368, May.
    18. Ascarya & Ugi Suharto, 2021. "Integrated Islamic Social and Commercial Finance to Achieve SDGs," Springer Books, in: Mohd Ma'Sum Billah (ed.), Islamic Wealth and the SDGs, chapter 0, pages 105-127, Springer.
    19. Norman Dalkey & Olaf Helmer, 1963. "An Experimental Application of the DELPHI Method to the Use of Experts," Management Science, INFORMS, vol. 9(3), pages 458-467, April.
    20. Stijn Claessens & Giovanni Dell’Ariccia & Deniz Igan & Luc Laeven, 2010. "Cross-country experiences and policy implications from the global financial crisis [From Great Depression to Great Credit Crisis: Similarities, differences and lessons]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 25(62), pages 267-293.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mukhtasor Mukhtasor & Lisa Listiana & Irvan Hermala & Najim Nur Fauziah, 2023. "Scaling up Renewable Energy Financing through Islamic Blended Finance: Case Study in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 634-644, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ascarya & Ugi Suharto, 2021. "Integrated Islamic Social and Commercial Finance to Achieve SDGs," Springer Books, in: Mohd Ma'Sum Billah (ed.), Islamic Wealth and the SDGs, chapter 0, pages 105-127, Springer.
    2. Stefanie Behncke, 2023. "Effects of Macroprudential Policies on Bank Lending and Credit Risks," Journal of Financial Services Research, Springer;Western Finance Association, vol. 63(2), pages 175-199, April.
    3. Cetorelli, Nicola & Goldberg, Linda S., 2012. "Liquidity management of U.S. global banks: Internal capital markets in the great recession," Journal of International Economics, Elsevier, vol. 88(2), pages 299-311.
    4. Rose, Andrew K. & Spiegel, Mark M., 2011. "Cross-country causes and consequences of the crisis: An update," European Economic Review, Elsevier, vol. 55(3), pages 309-324, April.
    5. Ivan Diaz-Rainey & John Ashton & Maz Yap & Murat Genc & Rosalind Whiting, 2015. "The determinants of regulatory responses to risks from financial innovation: Survey evidence from G20," Working Papers 15001, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
    6. Chi-Yo Huang & Pei-Han Chung & Joseph Z. Shyu & Yao-Hua Ho & Chao-Hsin Wu & Ming-Che Lee & Ming-Jenn Wu, 2018. "Evaluation and Selection of Materials for Particulate Matter MEMS Sensors by Using Hybrid MCDM Methods," Sustainability, MDPI, vol. 10(10), pages 1-35, September.
    7. Martynova, Natalya & Ratnovski, Lev & Vlahu, Razvan, 2020. "Bank profitability, leverage constraints, and risk-taking," Journal of Financial Intermediation, Elsevier, vol. 44(C).
    8. Jincheng Jiang & Jinsong Chen & Wei Tu & Chisheng Wang, 2019. "A Novel Effective Indicator of Weighted Inter-City Human Mobility Networks to Estimate Economic Development," Sustainability, MDPI, vol. 11(22), pages 1-18, November.
    9. Pierre-Olivier Gourinchas & Maurice Obstfeld, 2012. "Stories of the Twentieth Century for the Twenty-First," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(1), pages 226-265, January.
    10. Bretschger, Lucas & Kappel, Vivien & Werner, Therese, 2012. "Market concentration and the likelihood of financial crises," Journal of Banking & Finance, Elsevier, vol. 36(12), pages 3336-3345.
    11. Daehwan Kim & Chi-Young Song, 2017. "Bankruptcy of Lehman Brothers: Determinants of Cross-country Impacts on Stock Market Volatility," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 210-219.
    12. Ascarya & Ali Sakti, 2019. "Designing Micro-Fintech Models For Islamic Micro Financial Institution In Indonesia," Working Papers WP/09/2019, Bank Indonesia.
    13. Ms. Deniz O Igan & Marcelo Pinheiro, 2011. "Credit Growth and Bank Soundness: Fast and Furious?," IMF Working Papers 2011/278, International Monetary Fund.
    14. Ming-Yuan Hsieh, 2011. "An empirical survey: Can green marketing really entice customers to pay more?," E3 Journal of Business Management and Economics., E3 Journals, vol. 2(4), pages 132-146.
    15. Artha Hoxha, 2018. "Explaining the impact of the global financial crisis on European transition countries: a GVAR approach," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue Q2-18, pages 81-97.
    16. Ms. Ghada Fayad & Mr. Roberto Perrelli, 2014. "Growth Surprises and Synchronized Slowdowns in Emerging Markets––An Empirical Investigation," IMF Working Papers 2014/173, International Monetary Fund.
    17. Adi Masli & Matthew G. Sherwood & Rajendra P. Srivastava, 2018. "Attributes and Structure of an Effective Board of Directors: A Theoretical Investigation," Abacus, Accounting Foundation, University of Sydney, vol. 54(4), pages 485-523, December.
    18. Michael Wosser, 2015. "The Determinants of Systemic Banking Crises A Regulatory Perspective," Economics Department Working Paper Series n265-15.pdf, Department of Economics, National University of Ireland - Maynooth.
    19. Alexandra Born & Zeno Enders, 2019. "Global Banking, Trade, and the International Transmission of the Great Recession," The Economic Journal, Royal Economic Society, vol. 129(623), pages 2691-2721.
    20. Didier, Tatiana & Hevia, Constantino & Schmukler, Sergio L., 2011. "How resilient and countercyclical were emerging economies to the global financial crisis ?," Policy Research Working Paper Series 5637, The World Bank.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:eurase:v:12:y:2022:i:1:d:10.1007_s40822-022-00201-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.