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Islamic finance has gained momentum in the world today. Irrespective of faith conviction, it has been accepted as a mode of financing in the world. The development of Islamic finance was gradual in the past. At the initial stage of its development, Islamic finance was concerned more with Shariah compliance of transactions and contracts used in it. Subsequently, focus was realigned on Shariah harmonisation with respect to juristic views and Shariah governance. Islamic finance encompasses some fundamental religious prohibitions and the promotion of certain virtues enshrined in Islam, to be observed in all ramifications of business dealings, including services provision. Therefore, Islamic finance works in line with Islamic religious principles such as a ban on usury or interest, gambling, uncertainty and outright speculations.

Indonesia's micro, small and medium enterprises (MSMEs) sector, with over 65 million businesses, is globally the largest. The sector accounts for more than 60 per cent of the country's GDP and employs over 97 per cent of its workforce. Yet, lack of access to finance due to the nature of the business, has constrained development of the sector. This study aims to examine usage of blockchain to aid microfinance and expedite MSMEs' access to finance in Indonesia. Employing qualitative research techniques, the study focuses on Baitul Maal Wa Tamwil's use of blockchain in providing micro sukuk for financing MSMEs. The study finds that using blockchain to offer microfinance services facilitates greater transparency about MSMEs, enables efficiency and accountability in their access to finance. It bridges the gap to MSMEs' access to finance, reduces cost of transactions and mitigates setbacks related to them. As blockchain drives the evolution of enterprises and microfinance institutions in Indonesia, regulatory bodies must stay abreast of these advancements to ensure that innovation progresses in tandem with appropriate regulations. As a learning experience, appropriate governance and legal framework needs to be phased in to accommodate blockchain, its peculiarities, and for it to foster financial access and deepen inclusion.

Default can occur in Islamic banking. As the law applicable to Islamic banking is derived from Shariah, it is imperative to check whether the current practice of Islamic banks in default aligns with Shariah. The objective of this chapter is to discuss the rules and procedures Islamic banks in Malaysia follow in case of default. This is a qualitative research where data from primary sources such as laws on the matter are extracted to derive conclusions and secondary sources such as case laws and other published materials in the subject matter are explored. It is anticipated that the outcome of this chapter will assist to comprehend the way in which Islamic banks deal in case of default and since Malaysia is considered as the cranium of Islamic banking due to the comprehensive ecosystem it has created for Islamic banking and finance, the rest of the world could learn from this case study to enhance the behaviour of Islamic banks in case of default.

The growth of Islamic finance in Commonwealth of Independent States (CIS) countries generally is slower in the Central Asia region compared to other regions in the world. With its population of more than 34 million, Uzbekistan is probably one of the most promising markets for Islamic finance in Central Asia. Therefore, the emergence of intensive public debates around this matter and officially announced plans of the government to create an infrastructure for Islamic finance prompt that the relevant authorities are taking a drastic U turn regarding the sector because the country has not clasped the potential of Islamic finance. This research aims to examine the challenges facing pioneering Islamic finance in Uzbekistan. Specifically, it attempts to explore the current state of Islamic finance within the country, identify the current obstacles it faces and recommend practical ways to resolve the obstacles identified. Apart from that, the research investigates the Islamic financial products and services suitable in Uzbekistan. The findings of this research suggest some specific challenges facing the country in this regard. Inexistence of robust legislation and transparent regulatory framework coupled with lack of talents and those who are ready to contribute to the development of the new financial system in Uzbekistan are the major challenges, followed by public awareness and fully understanding the new financial system, that the country is facing. Introduction of the Banking Act that will suit the implementation of the Islamic finance for all three segments and talent acquisition with necessary skills and knowledge are practical recommendations to solve the challenges. This will in turn provide better promotion of the new system, increase demand from the population and diversify the range of products offered. It is therefore anticipated that the outcome of this research would assist government officials, policymakers, all other stakeholders as well business leaders to deeply understand and review the results and findings.

Islamic digital banks are the forefront of financial technology which means they can offer innovative products and services in line with Shariah. However, having only recently set foot in Malaysia has its own set of challenges. In countries where technology advances, coupled with significant Muslim audiences, such as Dubai and Kuwait, prominent Islamic digital banks paved their way. In 2022, the Central Bank of Malaysia (BNM) announced five successful digital banking licence applicants. In the spirit of financial inclusion and regulatory support, two of the applicants are establishing Islamic digital banks. The purpose of this study is to examine the Islamic digital framework in Malaysia and identify the obstacles associated with it. Qualitative case study research has been optimized by collecting data from professional experts in the Islamic finance industry from four different countries through semi-structured interviews. This chapter then finds six main challenges, namely operational risks, lack of compliance and Shariah adherence, profitability, scarcity of Islamic finance experts, technology adoption and lack of trust and regulatory compliance. This study is amongst the pioneers in Malaysia that explores the challenges in establishing Islamic digital banks. The outcomes of the study are relevant to governments, regulators, institutions, and central banks to structure the right interventions to counter the hurdles. Future regulatory enhancements are required to spearhead the development of Islamic digital banks in Malaysia.

As a charitable institution, waqf is envisaged as an inherent segment of the Islamic financial services industry with potential to develop into a market for Islamic social finance. While the industry records growth and development with huge profits in its banking, takaful and capital market segments, it has been observed that pursuit of profits has overshadowed social and financial equity goals and thus disproportionately promoted in Islamic finance. Yet, waqf, with over trillion dollars' worth assets to its credit to advance these goals, is neglected and the assets left undeveloped and idle due to governance issues. Thus, eligible beneficiaries of those assets in several Muslim nations suffer with illiteracy, poverty and lack of healthcare among other social challenges that need social finance solution. Hence, the need to reconceptualise waqf governance in order to reawaken and develop it to assume its role not only as a social financing institution but for financial inclusion. Regulatory technology is turned to as answer to the governance needs to establish and develop a waqf social capital market, along with fintech for delivery of related products/services. In this chapter, a qualitative methodology with exploratory approach is employed in examining and analysing relevant data on waqf market in Islamic financial services industry to advance and contribute in the social financing drive in global developmental agenda. The chapter demonstrates the capabilities of fintech-powered waqf and regtech solutions therein in matters of waqf registration and/or establishment, e-KYC/KYD, detection and elimination of fraud, statutory reporting and compliance, etc., while leveraging on blockchain, mobile and cloud computing technologies. Thus, deploying regtech unlocks opportunities in waqf towards fulfilling the social financing goals of Islamic finance. Attaining this however requires synergy and collaborations for research in the workability of the technologies in compliance with Shariah and law, among all stakeholders in Islamic finance and economy.

This chapter aims to evaluate the Hajj financial management system by Hajj Financial Management Agency (BPKH) with challenges that have the potential to impact the financial sustainability of hajj funds; assesses the effectiveness of the implementation of the hajj fund subsidy system associated with the financial sustainability of the hajj fund; and proposes solutions to overcome the hajj financial management system and hajj fund subsidy system. A qualitative research approach through interviews along with a documents review was used to collect data and achieve the research objectives. The results of the analysis show that there are challenges in the hajj fund management system in terms of regulation, which are the issuance of Law Number 8 of 2019, about the Management of Hajj and Umrah that regulates different things for the same substance in Law Number 34 of 2014 about Hajj Financial Management. This resulted in the unclear relationship and flow of hajj financial management related to the implementation of the hajj pilgrimage between two related institutions, which are the Ministry of Religion and the BPKH. In addition, regarding the financial sustainability of the hajj in the practice of providing subsidies for the implementation of the hajj, it can be stopped gradually. If the subsidy system is to be continued, it will make hajj finances unsustainable and not in accordance with Sharia principles and justice. This study is the first of its kind to examine the financial sustainability of the Hajj Financial Management Agency (BPKH) in Indonesia. In addition to being a reference for future researchers, this study could also serve as an impetus for policymakers to design strategies that overcome the weaknesses of the hajj financial management system and the hajj fund subsidy system.

COVID-19 was first considered to be a health crisis. However, the containment measures implemented by the respective governments of countries around the world led to an economic crisis which eventually led to a human crisis. It is said that due to the pandemic, the global poverty clock has turned back 30 years (Kharas and Hamel, 2020) and the impact of it in different countries depending on their level of development is affected. It is reported that COVID-19 virus has been found in all African countries, but the number of cases recorded is fewer which could be due to lack of capacity to test and report positive cases (United Nations, 2020). Apart from the health issues faced, other issues such as: scarcity of food and medical supplies; inability to work leading to loss of income; and the emergence of a debt crisis leading to political instability (United Nations, 2020). The main difference between the financial crisis of 2018 and the pandemic is that the pandemic crisis has affected more than just the financial sector and includes real economic activities like farming and trading (Muhammad and Ismail, 2020).

The law of contract is a significant area of commercial law, which is a substantive law. Common law principles of contract law are used in many countries in the world especially by those countries that were British colonies. This is the case in Muslim countries as well. Since the sixteenth century, Muslim countries were ruled by the British, and since then, the Islamic legal system in these countries slowed its progress, and the application of English law became a common practice up until today. Islamic law's application was reduced to personal matters of Muslims. However, due to the institutionalisation of Islamic finance, the adoption and application of Islamic law in commercial transactions have been revived, and research in this regard has gained momentum. For the sake of sustainable development of Islamic finance globally, law harmonisation between Islamic law and common law has been viewed as an important aspect that requires attention.

COVID-19 is considered by some as a 'black swan event', which is a pandemic that is unpredictable, unprepared for, and totally spontaneous (Gubler, 2020). This pandemic is different from four other recent pandemics the world has witnessed within the last 25 years (Gubler, 2020) as its impact has created not only a health crisis, but has led to an economic as well as human crisis brought due to a halt in all major economic activities in the world. The impact of COVID-19 on the sudden increase of poverty is uncontainable. By 12 March 2020, the World Health Organization (WHO) declared COVID-19 a pandemic, as, since December 2019, the disease had been spreading worldwide, putting the world population at risk. Simultaneously, the number of unemployed increased turning back the poverty clock (Kharas & Hamei, 2020). This is because as Sumner et al. (2020; p.2) state: 'global poverty could increase for the first time since 1990 and, depending on the poverty line, such increase could represent a reversal of approximately a decade in the world's progress in reducing poverty'. They also observe that in some regions, the poverty levels could be what they were exactly 30 years ago (Sumner et al., 2020) ruining the progress that has been achieved by the world so far in this regard. According to the International Labour Organization (ILO), the continuous decline in working hours globally due to COVID-19 means that 1.6 billion workers in the informal economy, which is nearly half of the global workforce, are at immediate risk of losing their livelihood (ILO, 2020).

This chapter explores the impact of the pandemic on Islamic commercial finance and Islamic social finance in a comprehensive manner. The chapter reveals that COVID-19 has provided more opportunities to Islamic social finance than Islamic commercial finance. The beauty of Islamic finance in this regard is reflected as the perception that Islamic finance does not achieve its objective as being a social finance is proved to be false as Islamic finance not only promotes profit maximization, but it has also the potential to achieve social objectives. Islamic commercial finance developments could be slower, but it is anticipated that Islamic social modes of financing will be used widely even by multilateral agencies to assist the communities who need help in this pandemic. The most important lesson one could learn from this pandemic in relation to Islamic finance is that Islamic finance is truly different from conventional finance and as such, it needs a unique legal, regulatory and governance framework to display the true potential of it.

Looking at current global reports, it seems that half of the world's population is suffering economically and socially. According to the most recent estimates, in 2013, 10.7 per cent of the world's population (767 million people) lived on less than US$1.90 a day (World Bank|Poverty Overview 2018). Moreover, millions of people lack adequate shelter and access to portable water, health services and education and suffer from extreme hunger (Shah 2013). Muslim countries are not exceptional, even though many anti-poverty programmes have been implemented, yet the Islamic Development Bank reported that 351.2 million people are living on less than $1.25 a day (SESRIC - Statistical, Economic and Social Research and Training Centre for Islamic Countries 2015). Highlighting these upsetting statistics reveals the need to explore alternative ways to address some of the current global issues through the study of the role of the institution of waqf and the potentials of fintech.

Zakat is an effective Islamic social financial tool that could be used to eliminate global poverty. The pandemic has turned back the world's poverty clock and as such, more work is required to bring equitable and shared prosperity to the world. International organizations that serve humanity could be used as intermediaries of zakat to reach out to those categories of legal recipients of zakat who are most deserved of such assistance, but who are unidentified and unreachable by the zakat organizations. This is with the ultimate objective of enhancing the effectivity of zakat as a social finance tool. However, using international organizations as zakat intermediaries is not a straightforward issue and limited literature are available on the matter to understand the contemporary practice and challenges in this regard. As such, using a qualitative research approach, this chapter sheds light on the issues revolving around the internationalization of zakat by looking at the existing practice of it by identifying the challenges in doing so. This chapter proposes a way to resolve the existing issues in internationalization of zakat by leveraging on blockchain technology where a proposition is made to introduce a crypto zakat platform. This chapter also reveals that in contemporary times, there are three ways in which international organizations have been involved as zakat intermediaries: by creating a zakat fund for specific purpose; by receiving zakat money to be distributed to transform the societies in countries other than where the zakat was collected; and by creating partnership with zakat organizations to use zakat money in the respective country in which zakat was collected. It is anticipated that soon the stakeholders of zakat would join hands with international organizations to effectively manage zakat to alleviate poverty in the world exacerbated by the ongoing pandemic.

Africa is a continent that has contributed significantly to the institutionalization and development of Islamic finance in the world. Islam is the major religion in many countries in Africa, particularly those in the north of the continent (Saleh, 2021). For instance, in countries like Somalia, Morocco, Mauritania and Algeria about 99% of the population are Muslims while in Egypt 90% of the population are Muslims (Saleh, 2021). In 1963, the first ever Islamic bank incorporated in the world was formed in Egypt (Orhan, 2018) while in 1979, the world's first takaful company was incorporated in Sudan (Billah et al. 2019). Though the institutionalization of Islamic finance began in the African continent, there is still a need to unlock the full potential of Islamic finance (Dey and Jen, 2018; Parker, 2021). For the huge necessity to finance infrastructure projects and to alleviate poverty via financial inclusion, Islamic finance has the potential to provide adequate solutions (Monnet, 2019). However, there are numerous challenges such as the regulatory gap and knowledge gap that must be resolved to implement Islamic finance in a sustainable manner in Africa (Dey and Jen, 2018). Lack of government support to utilize Islamic finance in Africa has also been identified as a challenge (Parker, 2021). The straw that broke the camel's back in this regard is COVID-19, which has become a threat not only to Africa but also the whole world in the quest to achieve sustainable development.

Islamic economics is ethical as its principles are derived from the religion Islam that gives paramount consideration to application of moral principles in all aspects of human lives. As such, there is no need to mention the word ethics with Islamic economics to describe its moral dimension since ethical values are inherently included in Islamic economics. This chapter provides a basic overview of the lex loci applicable to Islamic economics, which is Shariah, in order to understand the Islamic world view surrounding the subject and its economic teachings derived from tawheed. Furthermore, the differences between an Islamic economic system, on the one hand, and socialism and capitalism, on the other hand, are also provided, followed by a discussion of Islamic economic governance via the institution of hisbab and the practice of Islamic economics in classical and contemporary times. This chapter aims to provide readers with an understanding of Islamic economics by presenting the theoretical foundations undergirding it contemporaneous practical application.

Islam is a comprehensive religion and a complete way of life that provides guidance not only in matters of ritual and worship but also mundane activities. Ethical principles, generally termed akhlaq, are embedded in Islam as important component of its guidance system for all dealings. Wealth in Islam is considered a trial, or a possession meant to try one's obedience to Allah (SWT). While one enjoys wealth, it is as well regarded as an endowed favour from Allah that embodies entitlements of poor and needy members of society. Appropriate disbursement of the entitlement due to the poor is an obligation that brings to light the issue of wealth as a trial, particularly on those who might not duly discharge it. Zakat, a third pillar of Islam, together with sadaqat and waqf are mechanisms designed to channel those entitlements from wealth of rich members of the society to help the poor and needy who are poverty-stricken. Poverty is a prevalent global issue today which is said to be the reason for over 821 million people going hungry each and every day in some of the world's poorest communities (Islamic Relief, n.d.). Poverty is taking its toll on the economic and social aspects of the lives of the people such that in region such as Africa one out of four is undernourished.

Even though the Dutch Muslim community of approximately one million people have been going through a socio-economic development for the last few decades, house ownership within this community has still been significantly low compared to other Dutch citizens belonging to other religions. The absence of Islamic financial solutions in the Netherlands is one of the major reasons behind this phenomenon. Islamic financial offerings have started to emerge in Western Europe, but it has not reached the Netherlands and as such, Muslims in the Netherlands are unable to have an Islamic solution to obtain financing facilities to own homes. There is need to conduct a study to find out the demand of the Muslim population of the Netherlands on Islamic finance. This study delineates the stance of the Dutch Muslim community towards Islamic finance in terms of their understanding of its concept, their level of acceptance towards conventional financing and finally their preference for either Islamic home-financing solutions, conventional mortgages or property renting.

This chapter's goal is to introduce readers to the progress of Islamic finance in the SAARC member states of Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. This chapter shows that the eight countries' Islamic finance trends are distinct, as are their respective methods for advancing Islamic finance. In a nutshell, South Asia includes the most prominent and significant Islamic finance market reflecting the predominantly Muslim population in these countries. Noticeably, Pakistan, Bangladesh, Sri Lanka, and the Maldives have a presence in all three major Islamic commercial financial industries catering for Muslims in the countries in a dual financial system. As a significant challenge in India, the legislation prohibits banks to invest, and deposit based on profit-loss sharing which negates the risk-sharing nature of Islamic finance. While for the majority of the countries, the major challenges were a lack of skilled workforce in the field, lack of awareness, education among the public on Islamic finance, and active Islamic liquidity markets. For Afghanistan, Islamic financial development is at an infant stage mainly due to political instability where Islamic banks are only operated and there is no proper formation of an Islamic capital market (ICM) and takaful industry. Nevertheless, the Muslim population is extremely low, and the presence of Islamic finance is almost none in Nepal and Bhutan where a proper development of Islamic finance in these countries necessitates huge efforts shall be made by the Islamic bodies and Muslims in the country.

The modern Islamic finance as an offshoot of financial engineering is the product of permissible innovation as a manifestation of the dynamism of Islam which allows for permanence and continued relevance of Islam in any age to come. Using technology or any permissible means to bring about financial solutions in society that ease human life is an integral part of the overall objectives of Shariah. Speaking in economic terms, Sharia strives at individual prosperity as much as of the society on the ideal that prosperity of individuals that make up a society underlies the prosperity of the society. In this modern age and time, financial inclusion constitutes a fundamental component of most governmental policies and action plans aimed at ensuring prosperity of society via improved social welfare to eradicate poverty and enhance living standard. Financial inclusion constitutes a fundamental component of such policies and action plans. Accordingly, Islamic finance is said to be committed to the ideal of financial inclusion having regard to its ideal of bringing prosperity to individuals and society in such a way that will translate to and help economies grow. This is to be pursued through every permissible means now available or to be invented in future, within the confines of Islamic values of financing.

Islamic financial benchmarking is an area that requires research and needs practical solutions to advance the Islamic finance industry to a greater level. From the inception of contemporary Islamic finance, criticisms have been made about the fact that in Islamic finance, financing rates are benchmarked against conventional interest rates. To respond to these criticisms, Sharī ͑ah scholars have given justifications from Sharī ͑ah perspectives and in this regard some scholars ask: “Does consumption of beef suddenly become forbidden if its price were based on the price of pork?” (Alshubaily, 2018).

Covid-19 pandemic was a health crisis that plunged the world into economic turmoil due to its resultant national lockdowns across economies which brought business and market activities to a standstill. In order to adapt to ensuing restrictions owing to the pandemic, forge ahead in a new way of living, work and interactions with one another (new normal), digitizing business and market operations is considered a necessary option. Sukuk is an essential Islamic capital market product whose operations involve multiple parties/intermediaries alongside some technical financial, administrative and legal/shariah processes. On this note, this chapter aims to study and examine the need for digitizing and automating sukuk operations and related activities to pave way for innovation, development and better continuity of sukuk market. In conducting the study, a review of literature approach is employed where relevant works on sukuk and fintech were examined. Using content analysis, the chapter explored digitization of sukuk in the Islamic capital market via fintech and blockchain and associated benefits, including peculiar challenges therein. An interview was also conducted to better understand the Wethaq case study. The chapter reveals that digitizing sukuk issuance adds value to sukuk and remedies certain inadequacies associated with sukuk transactions; can increase transparency of underlying sukuk assets and cash flows and can reduce costs due to lesser number of intermediaries. Digitization is the future of sukuk issuance and will promote sukuk well through the Covid-19 crisis and beyond.