The Indonesian legal system is a religious one. However, there is strong traces of secularism in the legal education in non-Islamic universities. This article observes the teaching of purposes of law in the ‘Introduction to Jurisprudence’ course (ITJ) at the top law schools in Indonesia, particularly on the ‘Purposes of Law’ Chapter via the most used textbooks. It finds that there is little space for religiosity there especially on one of the main purposes of law according to all the textbooks: ‘utility’ primarily based on Jeremy Bentham’s utilitarianism theory. It is argued that the current approaches to utility is a secular approach which does not conform to the character of Indonesia. This article argues further that the Maqashid Al-Shari’ah is more appropriate to explain ‘utility’ in context of the Indonesian legal system, and should take its place among the ‘purposes of law’ chapter in the Indonesian legal education.

The value of the goods or commodities depends on the worker's performance, according to the labor theory of value. Therefore, every worker must have a clear calculation of receiving wages. But how to determine the right calculation for the wages of a worker? In this case, Islam, capitalism and socialism have their respective views. So, this study aims to determine the views of the three schools about the labor theory of value. The method used by researcher in conducting this research is to use the method of literature study and comparative analysis. And to compare the thoughts of the three schools of economics, the researcher refers to the figure of the school's experts as representatives. Researcher chose Ibn Khaldun from the Islamic side, Adam Smith as a representative of capitalism, and Karl Marx as a reference figure for socialism.

This study aims to present the economic ideas of Ibn-e-Sīnā, dealing with the concept of wealth management. In order to achieve its objectives, this study employs qualitative research that refers to the meanings, concepts, definitions, characteristics, metaphors, symbols and descriptions of the matter under study. The study uses the literatures of Ibn Sīnā related to tadbir al-manzil (economics) to develop a theoretical model of managing wealth that integrates the material, spiritual, moral, social and legal dimensions. There are two methodologies of this study, namely interpretative and historical analytic methods. In his wealth management, there are two main variables; kasb (earning) and infāq (spending). The kasb (earning) is from al-tijārah (trade) and al-ṣinā‟at (manufacturing skills), while infāq is the function of infāq ijtimā'i (common expenditure), infāq dīni (religious expenditure) and aliddikhār (savings). Finding of this study is that the concept of managing the wealth derived from Ibn Sīnā is still relevant to the modern concept of Islamic wealth management

Islamic banking as corporate is also subjected to the responsible of Corporate social responsibility (CSR). Moreover, Islamic Banking is different from Conventional bank in its worldview, operation and principle. It will impact to CSR operation in Islamic banking. CSR of Islamic Banking must constitute to its objective that should realize the just and welfare in ummah’s life. It came into existence as a collective religious obligation (fard kifayah) on the larger community (Ummah) as a financial > intermediary for individuals in the community wishing to comply with Islamic law (Syari’ah). This study aims to discuss the role of maqas>id Syari } ’ah, and to propose it > into the applied of CSR on Islamic banking. Implementation of corporate social responsibility (CSR) is very important in Islamic banks because it is used as important measurements to assess a successful company in its operation. CSR in Islamic bank should be different with the Conventional one from its worldview, system and standard of operational. The concept of CSR in Islam is not new, it is deeply mentioned and explained in sources of Islam. Maqasid Syari’ah > is used to see the maslahat (benefit) and to make decision in all aspect of human life. In maslahat’s perspective, CSR of Islamic bank is to promote the justice and welfare and to avoid the disruption and chaos.

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.

This research discusses the determinants of inflation according to Al-Maqrizi, one of Ibnu Khaldun’s disciples. He argued that inflation is caused by natural and human error factors; the latter include government corruption and the excess supply of non-metal money. This study conducts a critical review of the work of al-Maqrizi, ighatsatul ummah bi kasyfil ghummah, supported by a panel data regression of cross-country data related to rates of inflation, rates of corruption and the number of natural disasters. The empirical data show that the rate of inflation is positively related to human error factors: corruption, tax and money supply. The results indicate the relevance of al-Maqirizi’s postulates to the modern day economy. However, natural disasters are not proven to be a significant factor for inflation at the country level. This paper contributes to the importance of the study of classical Muslim scholars’ thinking in order to understand current economic problems and ways of solving them.

Bukalapak is one of the biggest online marketplace in Indonesia. Bukalapak provides a place for trading for sellers and buyers, utilizing the applications on the internet as a space to trade. The objective of the study is to assess the the compliance of product, buyer and seller verification system, payment and delivery transaction system of Bukalapak with the Shariah law. Thisresearch uses a qualitative approach; interview and observation. The collected data will be analysed with interactive analysis model by Miles and Huberman. The result of this study shows that as an online marketplace, Bukalapak complies with the legal standards of Shariah law which is based on ijab qabul between the seller and the buyer, also there is a form of liability or indemnity imposed by Bukalapak with the view of balance and fairness between all Bukalapak users. The result also shows that Bukalapak had been running based on honesty and openness so that it is able to develop the market based on Islamic economics. Hence, it earns the trust from the sellers and the buyers as a place for buying and selling.

The existence of financial intermediation institution is quite necessary to support the economic activity. It serves both surplus unit and deficit unit to meet their wants whereby the former wants to invest his money in the lack of skill, while the latter wants to develop their businesses but does not have adequate capital. Bank institution is the most common institution serving the people‘s need of financial intermediation. However, bank has several weaknesses that may harm and hamper the economic development. This paper aims to explore the weaknesses of banks as financial intermediary institutions and then promote Islamic Private Equity Fund as alternative. The result showed that the weaknesses of banks are: 1) fractional reserve banking, 2) fiat money, 3) debt-based investment, 4) risk averse. Furthermore, the study also found that Islamic Private Equity Fund can serve as an ideal financial intermediary institution due to some strengths: 1) no fractional reserve banking, 2) equity-based investment and 3) risk taker.

Nowadays, the idea of integrating zakat into fiscal system has arisen in Muslim countries including Indonesia. It is argued that zakat, in history, has played a significant role to create welfare among societies. It is proven at the time of Caliph „Umar ibn „Abdul „Aziz that zakat has alleviated poverty at that time alongside tax. Having considered such achievement, some scholars argued that zakat should be reintegrated into current fiscal system. This paper, therefore, attempts to study the feasibility of integrating zakat into Indonesian fiscal system. Employing descriptive analysis based onSiyasahShar‘iyyah(high objectives of the Shariah). Therefore, the objectives of the study are set with these following points: 1) to address the strength and the weakness of the implementation of this idea, 2) to assess its opportunity aswell as its threat, 3) to examine whether the integration of zakat will secure maslahah(benefit) or create mafsadah(harm). The result shows that the integration of zakat into current fiscal system is in line with the SiyasahShar„iyyah. Hence, the strong willingness and commitment of government is strongly required to applicate it. The proper model of integration should also be planned well. Moreover, nurturing the understanding to all parties, especially to the non-Muslims and secularists, that this idea is really beneficial and not discriminatory should be promoted

This research aims at investigating the potential of Bait al-Māl wa Tamwil (BMT) in the development of border areas of Indonesia-Malaysia by prioritizing the welfare approach. Primary data was obtained through in-depth interviews with respondents from academics, practitioners, and regulators. The Analytic Network Process (ANP) method and Benefit Opportunity Cost Risk (BOCR) network are used to review the interview results. The results reveal that BMT is able to help the development of the border areas. Moreover, the aspects of benefit and opportunity in exploiting BMT is more significant than the cost and risk aspects. There are three alternative strategies to be implemented in order to maximize the benefits and opportunities and also minimize the costs and risks, namely the capital of third parties, linkage programs, and special regulations

Nowadays, the idea of integrating zakat into fiscal system has arisen in Muslim countries including Indonesia. It is argued that zakat, in history, has played a significant role to create welfare among societies. It is proven at the time of Caliph ‘Umar ibn ‘Abdul ‘Aziz that zakat has alleviated poverty at that time alongside tax. Having considered such achievement, some scholars argued that zakat should be reintegrated into current fiscal system. This paper, therefore, attempts to study the feasibility of integrating zakat into Indonesian fiscal system. Employing descriptive analysis based on SiyasahShar‘iyyah (high objectives of the Shari‘ah). Therefore, the objectives of the study are set with these following points: 1) to address the strength and the weakness of the implementation of this idea, 2) to assess its opportunity as well as its threat, 3) to examine whether the integration of zakat will secure maslahah (benefit) or create mafsadah (harm). The result shows that the integration of zakat into current fiscal system is in line with the SiyasahShar‘iyyah. Hence, the strong willingness and commitment of government is strongly required to apply it. The proper model of integration also should be planned well. Moreover, nurturing the understanding to all parties especially to the non-Muslims and secularists that this idea is really beneficial and not discriminatory should be promoted.

The purpose of this study is to compare the cost efficiency of takaful and its conventional insurance counterparts in Malaysia. The study measures the cost efficiency scores of takaful and conventional insurance companies in Malaysia over the period 2009-2011 using non-parametric Data Envelopment Analysis (DEA) based on selected multiple input and output variables. Output variables used are gross premium and investment income while input variables are management expenses, fees and commission expenses. The study finds that conventional insurance companies in Malaysia performed better efficiency than takaful companies in 2011. The finding is consistent with study by Ismail, et al (2011) and Saad (2012). The study suggests that takaful and conventional insurance companies should allocate input more efficiently and improve the quality of services as the average scale efficiency is higher than the average of overall and technical efficiency. Takaful must also be more alert towards external factor costs as the scale of efficiency continuously decreased. In order to be more focused, the study only compares the efficiency of takaful and conventional insurance companies from an input oriented approach. The study is also limited to 7 takaful operators and 19 conventional insurance companies and, as such, the finding is most probably indicative, but does not reflect the overall performance of the takaful industry. As part of a policy recommendation, the study provides data on cost efficiency of conventional insurance and takaful companies in Malaysia, which is valuable for regulators in formulating appropriate policy to enhance the competitiveness of the takaful industry in Malaysia.

Pertumbuhan perbankan syariah yang mencapai 30% per tahun menjadi fenomena tertentu. Namun di lain pihak signifikansinya dilihat belum optimal karena market sharenya masih di bawah 5 % (BI, Februari 2013). Dalam hipotesis penulis, salah satu penyebab belum optimalnya market share dalam 3 tahun terakhir, adalah peran intermediasi yang diduga belum optimal. Belajar dari pengalaman bank konvensional, pernah terjadi fenomena credit crunch (1998-2000) yang menyebabkan pertumbuhan perbankan sempat melambat dalam beberapa kuartal. Isu financing crunch memang belum muncul seperti credit crunch yang kajiannya sudah cukup lengkap, oleh karena itu penelitian ini harus segera diinisiasi. Tujuan penelitian yaitu (1) mengkritisi peran intermediasi perbankan syariah di Indonesia pada kurun waktu 2008-2012 dengan mengungkap ada tidaknya financing crunchi . (2) mengkaji solusi atas permasalahan intermediasi melalui studi pemikiran ekonomi Islam dalam perspektif maqashid shariah. Metode yang digunakan dalam penelitian ini menggunakan pendekatan kuantitatif dengan VECM dan kualitatif dengan content analysis. Hasil penelitian (1) Terdapat dugaan terjadi financing crunch selama kurun waktu penelitian sehingga perbankan syariah harus mencermati kondisi ini. Jika tidak segera menjadi perhatian, maka fenomena ini dapat menjadi kenyataan yang tidak mendukung pertumbuhan perbankan syariah (2) aspek keadilan dan manfaat (mashlahah) dalam maqashid syariah merupakan solusi penting. Produk simpanan jangka panjang skala ritel harus menjadi perhatian untuk menghindari motif spekulasi para deposan sehingga akses kepada pembiayaan syariah dapat diperluas tetap dengan mitigasi resiko.

The allocation of financing for agricultural sector in Islamic Banking Institution is low compared to the other sector. The risk of high uncertainty, which includes the level of damage to farms and the level of crop failure, becomes the financing risk consideration for the banking. Rice farm insurance can be an alternative to mitigate this risk so the a Islamic the banking will have a partner to share the risk. The insurance practice for agricultural sector has been initiated by the Ministry of Agriculture, but there are still some limitation due to the insurance inclusion and sharia compliance issues. This research provides a proposal of the implementation of shariah agricultural insurance with Analytical Network Methodology (ANP). The objectives of this study are 1) analyzing the benefit, opportunity, cost, and risk of the implementation of Islamic agricultural insurance and 2) find the most important aspect due to the shariah agricultural insurance implementation. The research finds that the most important aspect is opportunity. This insurance will give opportunity to the farmer by providing protection for the crop from the risk of harvest failure with shariah compliance and using shariah banking. The shariah scheme will help the government increasing the insurance inclusion. This scheme will benefit the farmer due to the increasing of crop insurance awareness. The requirement of this implementation comes from the cost aspect, namely legal aspect and the risk will rise from the moral hazard as fraud claim. The results of this study indicate that the implementation of shariah insurance for the agricultural sector has opportunities and benefits, but there are still some notes to be addressed

Poverty is one of the crucial issues in the world, particularly the developing countries in Southeast Asia. Each country seeks to increase the GDP per capita in order to reduce the poverty. To achieve this goal such policies have been made with different strategy. This study aims to investigate the determinations of poverty in OIC members countries and OIC Non members countries in Southeast Asia. The object of OIC Members Countries are Indonesia and Malaysia as well as Thailand and the Philippines for OIC Non Members Countries. This research used Fixed Effect regression with panel. The model consisting of the dependent variable and several independent variables including poverty, human development index, per capita GDP, government spending on education and health, Gini ratio and access to clean water. The results showed that the determinants of poverty in OIC Members Countries are HDI, government spending on health, per capital GDP, Gini ratio, and access to clean water. While the determinants of poverty in OIC Non Members Countries are HDI, government spending on health, GDP per capita, and access to clean water. The development of HDI is still very important variable.

Cash waqf is one of model of waqf. Cash waqf empowerment program GERWAKU SENA by Nahdlatul Ulama is one of many programs to support reducing poverty program in Indonesia. Due to its purpose this program must be supported by valuable research. The objectives in this research to find the main problem and the best solution to optimize Gerwaku Sena NU using ANP analysis. By using ANP Analysis, we composed the problem and solution in entrepreneur aspect into two groups namely internal and external. The research finding that the most influential problems on the waqf activity is lack of entrepreneur skill to solve operational cost problem and managerial aspect. In line with this problem, supporting entrepreneur skill for human resource is the key factor support the program.