Purpose – This paper aims to explore different forms and models of integration between Islamic commercial finance and social finance including the problem that arise as well as the solution of each of the models to promote inclusive economic growth. At the end of the paper, the authors have identified the strategy to execute and validate by the decision-makers. Design/methodology/approach – This approach uses two methods which are Delphi and analytical network process (ANP). The authors conduct literature review and four rounds Delphi to construct the integration model, the problem and solution of each model, as well as the questionnaire of ANP. Moreover, using an ANP method, the authors conducted interviews with decision-makers in the areas of Islamic commercial finance as well as social finance, and analyzed the results to identify key models that would create inclusivity and quality of economic growth. To ensure credibility of the results, the authors selected the respondents based on their experience in the fields, as well as their unique perspectives that will complement the group as a whole. Findings – After conducting the four rounds Delphi, the authors found five types of Islamic social and commercial integration which are the ownership, institutional, operational, bottom line and mandatory integration. Based on the analysis of the ANP result, the authors argue that all integration can help the country in attaining with the support of government in terms of making the integration as a vision as well as to push the education of social finance more to the stakeholders. Originality/value – This study is among the emerging studies that explore operational aspects of integration of social and commercial finance within the context of inclusive growth strategy.

Purpose – This study aims to investigate the muzakky intention to pay zakat through formal institutions by knowledge of zakat, institutional credibility, and zakat digitization as a determinant factor (a case study of Jabodetabek), and to find out which determinants influence them the most. Methodology – This study used a descriptive quantitative approach. The sampling technique in this study used non-probability sampling and purposive sampling by distributing questionnaires to 100 muzakky in Jabodetabek who had paid zakat through institutions. The method in this study uses SEM-PLS (Structural Equation ModelingPartial Least Square) analysis which is processed with SmartPLS software. Findings – The results in this study indicate that the variable knowledge of zakat and the credibility of the institution have a positive and significant influence on muzakky intention to pay zakat through formal institutions. While the variable of zakat digitization has a positive but not significant effect on the muzakky intention. And among all variables,the institution’s credibility variable has the most significant influence. Originality – This study focuses on the factors that influence the muzakky intention to pay zakat through the institution. This study examines the theory of consumer behavior and using three independent variables; knowledge of zakat, institutional credibility, and zakat digitalization. The result from this study can be used for policymakers, zakat stakeholders to synergize and collaborate for the zakat development in the future. Research limitations – The limitations of this study are that it is limited in scope to the jabodetabek area, and the number of samples is only 100 respondents. Also, the independent variable in this study is limited to only three variables, and the other variables also affect the dependent variable.

Use of riba (usury) in the economic system remained a key factor that led to financial crisis since the inception of modern economy in the late of 17th century. Implementation of interest based monetary policy stipulated rampant speculation as common practices in the global financial sector. Although Islamic banking was governed by syariah (Divine Law), which was assumed to be resilient from distress, the volatility of interest movement would generally affect Islamic banks operations in a dual banking system. This paper would look at this issue and would empirically explore the dynamic inter-relationships between deposits of Islamic banks with monetary policy variables in Indonesia. In terms of market share, as of 2009, Islamic banking asset in Indonesia was a meager 2%. The industry had been affected by few monetary policy shocks on its deposits and financing. The study would employ vector auto regression model (VAR) to explore the dynamics between the variables. The study would focus on data from 2004 to 2008 or performance after the Asian financial crisis. The results from these tests determined that shariah based deposits played significant role in transmitting monetary policy effects to the economy. This study found that Islamic banking deposits in Indonesia were not sensitive to monetary policy changes. This study also concluded that Indonesian Islamic banks were resilient to financial crisis.

We provide cross country evidence from microfinance institutions (MFIs) that are Sharia-compliant and their comparisons with non-Sharia-compliant MFIs. We find that, compared with non-Sharia-compliant conventional MFIs, Sharia-compliant Islamic MFIs have less credit risk but are less profitable and financially sustainable, have better poverty outreach, and are lesslikely to ‘mission drift’. Our results highlight the differences in religiosity and security design between these two institutions. Our study also helps practitioners and investors improve the understanding of the difference between conventional and Islamic MFIs. The regulatory support for the development of Islamic MFIs is a feasible way to improve income of all poor Muslims

Purpose – The purpose of this paper is to shed some lights on the process of mission drifting or abandoning poverty objective by Islamic microfinance institutions (IMFs). The paper investigates whether the extensive use of banking logic changes IMFs, from focusing on both development and financial objectives to only considering sustainability as their primary mission. Design/methodology/approach – This paper adopts mixed methods by analyzing 7,200 microfinance data from Microfinance Exchange Market and reviewing annual reports and websites of 25 IMFs to examine their vision and mission statements and other related information. Findings – The finding shows Islamic microfinance has not changed, despite increasing adoption of financial or banking performance measures. However, size and age of the institutions may affect the outcome in the future. The authors find that smaller microfinance institutions maintain genuine objective to serve the poor, as the grow larger they would be more inclined toward sustainability objectives. Research limitations/implications – The research is limited on the sample size as data on Islamic microfinance globally is limited. However, the paper looked at the global data rather than local data to compensate for this limitation. Future study would be further taking the study through qualitative methods to support the study. Originality/value – This paper aims to shed some lights on the process of mission drifting or abandoning poverty objective by IMFIs. The paper investigates how has the extensive use of financing logic has changed IMFIs from focusing on both development and financial objectives to only considering sustainability as their primary mission. Arun and Hulme (2009) argued that the interaction of multiple logic within microfinance institutions, i.e. financial vs social, could pose some serious management dilemmas within microfinance institutions. Further, commercialization puts pressure on the field staffs to achieve financial targets and often neglect their poverty outreach mission to the poor. The well-known crisis in Andhra Pradesh, India where clients of microfinance institutions committed suicide after being shamed by field officers who tried to collect payments of loans (Mader, 2013; Taylor, 2011), provides a powerful case of the impact of financialization to microfinance clients.

Tujuan dari penelitian ini adalah ingin menguji secara empiris, apakah perilaku nasabah perbankan Islam di Indonesia dan di Malaysia terpengaruh oleh kebijakan moneter yang dikeluarkan oleh bank sentral pada masingmasing negara. Selain itu, apakah negara dengan karakteristik ekonomi dan kebijakan yang hampir sama – Indonesia dan Malaysia -, akan menghasilkan perilaku nasabah terhadap deposito perbankan Islam yang sama atau tidak. Metode analisis yang digunakan dalam penelitian ini adalah yang pertama , metode ekonometrika VAR (Vector Auto Regression) yang bila terjadi kointegrasi pada data yang stasioner di 1st difference akan dilanjutkan pada VECM (Vector Error Correction Models) dan yang kedua, analisis elastisitas permintaan deposito perbankan Islam terhadap variabel-variabel yang diuji dalam penelitian ini pada periode Januari 2005 sampai dengan Desember 2009. Hasil dari penelitian ini menujukkan bahwa dalam jangka panjang variabel moneter di Indonesia berpengaruh secara signifikan terhadap deposito perbankan Islam. Berbeda dengan di Malaysia di mana variabel moneter tidak berpengaruh secara signifikan terhadap deposito perbankan Islam. Begitupun hasil analisis elastisitas permintaan deposito perbankan Islam di kedua negara. Dengan demikian dapat disimpulkan bahwa deposito perbankan Islam di Indonesia lebih sensitif terhadap perubahan kebijakan moneter, dibandingkan dengan yang ada di Malaysia

Islamic microfinance is a growing sector that is expected to provide a long-term solution to poverty in the Muslim world. The role of microfinance institutions in poverty alleviation is still debatable, however established literature provides assurance that microfinance does contribute to the development of financial sector and reduction of poverty in developing countries. The rise of competition in the microfinance sector has forced many microfinance institutions to resort to commercial funding and lending activities, which according to some studies has led microfinance institutions to become riskier. The paper explores portfolio and default risk of Islamic Microfinance Institutions (IMFIs) and find that they are facing relatively lower risks than conventional MFIs. Using Ordinary Least Squares regression to analyse portfolio risk of IMFIs, the research finds unexpected result. Since IMFIs are facing challenging working environment and are operating in some of the poorest countries in the world with frequent natural disasters or armed conflicts, we predicted that they will be riskier. We also find that IMFIs are also less vulnerable despite their clients are from the poorest segment in the society, often with lower educational level, and the nature of Islamic financial products are relatively unknown to most clients. Many of the IMFIs and their clients live in countries considered to be high risk or have histories of instability, either politically or economically.