The development of the takaful industry in Malaysia has seen tremendous growth since its inception and has emerged as an important component of the Islamic financial system in Malaysia. Being an Islamic institution, the takaful business has to adhere Islamic rules and regulations, incorporate maqasid shariah, uphold the Islamic corporate governance and at the same time achieve its business goals. This study looks into the current practices of governance of takaful in Malaysia an links it with maqasid Shariah by assessing the three main stakeholders namely, the takaful operators, the takaful agents and the policy holders. Data were elicited through interviews from the respective parties. From the study participants and agents accordingly viewed that takaful operators are handling their activities in accordance to maqasid of Shariah. The interviews also indicated that each takaful operator has its own processes, policies and procedures and are conforming their activities to Shariah. The basis of these policies are established in line with the Shariah Governance Framework and each process is done with the aim to achieve the maqasid of Shariah. It was also found there was a loose relationship between takaful operators and their agents. Takaful operators normally places their trust on their agencies to hire and to monitor their agents even though the agents will actually represent the takaful operators. Conformity to Shariah in every activity and transaction is indeed pertinent to a takaful operator. Hence in this respect a sound governance or rule must be established to strengthen the agent, agency and takaful operator relationships. Such action benefits stakeholders in protecting their interest hence achieving maqasid of Shariah.

Efficiency measurement has received increased attention amid global changes and growing competition within the finance industry in all countries, including developing countries such as Yemen. The evaluation of efficiency is crucial for players in the industry, not only to assess their ability for survival, but also to remain competitive in the market. Besides, efficiency would have consequences on other areas including bank margins and earnings manipulations. Like others, Yemen's banking industry has witnessed structural changes over the past decade, which paved the way for the industry to upgrade its efforts to emulate international standards. The present study analyses the efficiency of Yemen's banking sector during the 1996-2011 period. A two-stage analysis using Data Envelopment Windows Analysis (DEWA) was employed in the first stage of the research to measure the efficiency trends of industry, followed by the panel regression technique in the second stage to examine the determinants of efficiency. As efficiency of is a major concern for all stakeholders given its implications for various areas of banking operation such as bank margins and the opportunistic behaviour via discretionary accruals "manipulation" of earnings, the study also examines on whether the effeciency would have impacted the bank margins and earnings quality.

The main objective of this study is to present the current successful cases in making a revolution reform of the old and idle waqf properties into income generating properties in Muslim and Muslim minority countries. These reforms include providing services to the community, opening jobs for the majority of people, funding small entrepreneurs, educating the mass, taking care of the health of the people, and sheltering the poor and needy in the different countries. Case under studies are: Turkey, Malaysia, Singapore, Sudan, Indonesia, New Zealanf, Kuwait, India, Pakistan and Bangladesh.

This book presents successful case studies in Muslim and Muslim minority countries that have revolutionized the redevelopment of idle waqf properties into productive land trusts. The revival of this institution over the last two decades shows the growing optimism in galvanizing the socioeconomic role of waqf by adopting its flexible shariah measures. Innovative ways of financing redevelopment allow Muslims to extend these roles to include new beneficiaries. New uses for these properties include providing services to the community, opening jobs for the majority of people, funding small entrepreneurs, educating the masses, providing health care, and sheltering the poor and needy.

The issues of earning management has received attention from practitioners and academicians since the last couple of decades in banking sector. It is evident that bank managers practice the discretion in estimating loan/finance loss provisions for various motives such as reducing earnings variability (Agarwal, Chomsisengphet, Liu & Rhee, 2007; Kanagaretnam, 2004). Majority of the studies have been focusing on conventional banks, and only a few studies have focussed on Islamic banks, for instance, Zoubi and Al-Khazali (2007) and Othman and Mersni (2014). The significance of examining the issues in the context of Islamic banks stems from the fact that Islamic banks should not manage their earnings the way their conventional banks do. This is because the underlying theoretical basis of Islamic banks are based on Shariah principles which is different from conventional banks.

The paper investigates whether there is a significance difference between the practices of discretionary loan/finance loss provisions between Islamic and conventional banks. Same time, the paper tests whether the efficiency may influence the behaviour of discretionary loans/finance loss provisions, taken into consideration other micro and macro variables. The study utilizes panel data runs over 1996-2011 with unbalanced observations for 16 banks, of which 4 Islamic banks. In order to achieve research objectives, the two-stage approach is adopted to examine the factors that may influence the behaviour of discretionary loan/finance loss provisions with specific emphasize on the efficiency. Furthermore, efficiency scores are estimated using Data Envelopment Windows Analysis. The findings of the research show that Islamic banks employ the discretionary loans/finance loss provisions to manage their earnings. However, the magnitude of discretion of accruals is significantly lower than conventional banks with exception for foreign banks which have reported lower discretionary loans/finance loss provisions than Islamic banks. Moreover, the analysis showed that efficiency affects the overall discretionary loans/finance loss provision positively, although this impact is shaped differently for Islamic and conventional banks.

All human beings in this world deserve a better physical and social well-being particularly the quality of life. By having proper well-being and quality of life, the advancement of individual's physical and mental aspect can be assured. This balanced individual will form a stable family unit and later on contribute to a dynamic community in a bigger social entity. However, in order to enhance both physical well-being (PWB) and social well-being (SWB) as well as to attain a good quality of life (QoL), a social disease called poverty must be eliminated. In Indonesia, Islamic Financial Cooperative which is known as Baitul Maal wat Tamwil (BMT) has been influential in enhancing the participants' socio-economic status by providing small scale financial services and social development programs to the poor and low income households. Moreover, this paper purports to show that Islamic Microfinance Institution (IsMFIs) particularly BMT has contributed towards improving the participants' well-being and quality of life. As such, it becomes interesting to firstly find out whether the participants have significantly increased their physical and social well-being after joining BMT for several years. Secondly, having joined BMT, are there any improvement with their quality of life (measured by satisfaction with life).

The hard core poor are neither bankable nor covered against risks. Whilst micro-finance seems to solve financial inclusion for this group to some extent, albeit at very high costs, very little have been done to provide sufficient cover against risks of all sorts for this group. Some attempts at developing micro-takaful are actually in the pipeline, however, very little concrete and practical solutions have emerged so far. It is of course well-known that Islamic Social Financial Institutions (ISFI), namely zakah, waqf, infaq and qard-hassan are meant to directly benefit the less fortunate in society, but little has been done to ensure that they directly benefit from these institutions. The main objective of this paper is to show how the ISFI can be synergised to overcome this problem. The paper is also intended to show how the ISFI can be integrated within a Micro-Finance Model for alleviating poverty, assisting in providing the basic needs for the hard core poor such as food, shelter, education and health care. Research Methodology - this paper uses both primary and secondary sources. Data collected from primary sources include text from the Quran and from the Sunnah of the Prophet (pbuh), while data collected from secondary sources includes books, articles, journals, annual reports, and websites. Expected findings - Drawing lessons from some existing successful cases there, the expected findings for this paper is to draw the attention from policy marker, researchers to find ways and means how to integrate the ISFI into a viable Micro-Finance Model that will achieve such noble mission at the present time.

This paper argues that the goal of poverty alleviation and a decent standard of living is not attainable in Muslim communities unless the economic and social services of the Islamic philanthropic institutes are integrated and a full-fledged collaboration would be resumed among the managing boards. The first part of the paper will examine why Muslims participate in altruistic giving and what are the alternative forms of contributions that are provided by Shariah of Islam. The second part will review the potential and actual contributions of the said Islamic benevolent giving for poverty eradication and well-being of low and vulnerable income families. The third and concluding part will discuss the conditions, methods and mechanism for integration and coordination among Islamic philanthropic institutes for provision of affordable housing.

The main objective of this paper is to draw the attention to the four remarkable financial institutions which are meant to eradicate poverty, reduces inequalities and narrowing down the gap between the rich and the poor in ethical and just a way. These financial institutions are the zakah, waqf, qard-hassan and interest-free financial institutions.

Charitable bequest as an endowment (waqf) is one of the wealth redistribution measures encouraged in Islam to bridge the gap between the haves and the have-nots. Such investments create flows of income/services of a charitable nature, in most cases, after the death of the endowers. Even though it is voluntary in nature, it is means to provide a continuous service to the needy in society and ensures a just and equitable distribution of wealth, and a means to seek God's blessings here and in the here-after.

The establishment of the Takaful and Insurance Benefits Protection System (TIPS) in Malaysia is a statutory requirement. TIPS aims to ensure financial stability, soundness and public confidence. Perbadanan Insurans Deposit Malaysia (PIDM), known internationally as the Malaysia Deposit Insurance Corporation, is the sole regulatory body entrusted with the mandate to regulate deposit insurance across the country. At the outset, its mandate was confined to banking institutions. Since 2010, however, PIDM’s role has been extended to include takaful and conventional insurance institutions. With regard to takaful, the operation of the Takaful Benefits Protection System (TBPS) and the relationship between PIDM and its takaful members pose major concerns that have been raised by the industry in Malaysia. The concerns are related to contractual relationships, sources of premiums, the subject matter of the contract, and the services and guarantee that PIDM provides for takaful participants. This research aims to provide critical Shari'ah analysis and evaluation of the current model of Takaful benefits protection system. It examines the existing model to ascertain to what extent it accomplishes the statury mandate and to what extent it meets Shari'ah requirements. Adherence to regulatory requirements is a must. The takaful industry faces some major challenges in trying to realise the interests of the takaful participants and its shareholders while satisfying the regulators. Thus, it is imperative to conduct an investigation that resolves these thorny issues in a win-win manner.

All human beings in this world deserve a better physical and social well-being particularly the quality of life. By having proper quality of life, the advancement of individual's physical and mental aspect can be assured. As such, the chronic social disease called poverty must be expelled. In Indonesia, Islamic Financial Cooperative which is known as Baitul Maal wat Tamwil (BMT) has been influential in alleviating poverty by providing financing access and social development programs to the poor, low income and the un-bankable. This paper purports to show that Islamic Microfinance Institution (IsMFI) particularly BMT has contributed towards poverty alleviation as well as enhancement of members' well-being and quality of life. As such, it becomes interesting to firstly find out whether the members have significantly increased their income after gaining financing access from BMT. Secondly, are they satisfied in terms of their physical well-being (PWB) and social well-being (SWB). Data from 750 respondents were analyzed using SPSS software. The study found that the members' Income after joining BMT has significantly increased. It also showed that majority of the members were satisfied with their PWB and SWB after joining BMT for several years.

All the human beings in this world deserve to have a better quality of life. In order to achieve the noble notion, the chronic social disease called poverty must be expelled. It is a multidimensional phenomenon that has defied the social, economic and political landscape of every nation and society in various parts of the world. Thus, there is an urgent need to combat poverty and empowering the poor in order to develop both the physical and social well-being as well as to enhance the quality life of the people. One of the effective and powerful tools to combat poverty is by providing microfinance access to the poor ...

Takaful is derived from its Arabic root word 'kafala' which literally means 'to guarantee'. In terms of usage and implication, the term kafala certainly, denotes the agreement by one party to indemnify another for any liability that has been pre-agreed upon.

Mutual help and guarantee have been the ordinary practice of tribal Arabs even before the advent of Islam in Arabia. A similar but refined concept was reinforced by the Qur’an to be adopted by Muslims. It was widely applied in their daily lives. When the Muslims extended their trade by sea to the Far East, the concept of mutual assistance became more prominent and organised to protect their ships, merchandise and even lives from all sorts of dangers and mishaps. The practice by these merchants to put aside a sum of money before setting sail to the Far East for trade as a fund to compensate any loss incurred by any of them became the most prominent practice that led to the birth of what is today known as marine insurance. To circumvent some of the shari‘ah non-compliant practices of mainstream insurance is the introduction of the concept of donating part of the participants’ contribution which forms the special fund to compensate losses. From then on, the takaful operators started to emerge, first in Sudan and later in other parts of the Muslim world. Several models have been formulated, namely mudarabah, modified mudarabah, wakalah and wakalah-waqf. The success of the takāful companies around the world has also been strongly influenced by the recent upsurge in the petroleum price that has led to the unprecedented increase in sovereign and private wealth. The recent emergence of ‘re-takaful’ companies add up further to the rapid growth in takaful operators and funds. Despite the success stories, there are a number of serious challenges facing takaful and ‘re-takaful’ operators which are worth nothing.

There is no 'best fit' business model in takaful. All existing models applied in the present day takaful are akin to fitting square pegs into round holes. Where there are needs to fit in certain aspects of the business models, the practice is to cut off corners around the square pegs to enable the fit, primarily on the basis of maslahah to ensure conformity with the commercial aspirations and objective of the business models. This paper primarily explores the feasibility of ju'alah as the underlying contract in takaful. The ju'alah business model is developed, formulated and validated as to whether it can be an alternative business model in the context of Islamic commercial insurance-tijari framework ...

This book discusses risk, risk management and the operational aspects of the two broadly classes of takaful products namely, general and family takaful. In this book, the authors have also explained the various functions involved in typical takaful operations including the process of underwriting, claims, marketing, investment and retakaful while at the same time, bringing in the Shari'ah elements in all of these functions. The authors believe that while takaful and conventional insurance possess many similarities, their contracts are somewhat different.

The aim of this paper is to analyse the financial performance of Islamic banks in Malaysia measured using ratio analysis of profitability, liquidity, credit risk and impaired financing performance. The study also includes determining the impact of nominal Gross Domestic Product (GDP) and inflation rates on the variables of profitability, liquidity, credit risk and impaired financing performance during the period spanning from year 2007 to year 2011. The result of regression shows that nominal GDP has significant impact on macroeconomic variables such as return on average asset, liquidity ratio and equity to net loans. Therefore, there are only certain macroeconomic variables that have significant impact towards nominal GDP. As for the log-linear regression between nominal GDP and inflation rate as the dependent variables, the results shown that nominal GDP has significant and positive impact on ROAA (return on average asset) and liquidity ratio and EQL (equity to total liquidity). However, as for inflation rate, the results shown that the inflation rate has negative correlation with profitability ratio (ROAE and ROAA). Furthermore, surprisingly the inflation rates have no significant impact on the profitability ratio. The constraint of this paper is the limitation of time series period data on some of the economic variable as well as relying in the use of basic linear regression analysis.

In inheritance the Western or civil rules allows that we can give the inheritance to anyone that we wish to, be it a family member, outsiders, or even our pets. The civil law recognizes such desires and upholds these wishes even though we deprive our heirs from receiving it especially so where estates worth millions are left to pets. It can be considered as an injustice to the heirs, but they are helpless. Even when challenging the legitimacy of such wills, the civil courts tends to recognize and uphold the wills to be valid. In Islamic context, Islamic law protects the rights of an individual to own or to inherit the estate or wealth but it does not allow any means or tools to hoard money. It is a balanced economic system that allows free movement and circulation of wealth among the masses. Islam develops laws and ethical system that enforces legal and halal means to accumulating wealth and a balanced way of spending and distributing it. It recognizes the rights of others to such wealth through zakat, charity and inheritance. The law of inheritance is comprehensive legal system that allows legal beneficiaries who are eligible to claim their share of the inheritance as commanded by Allah in the Qur’an. No one is being deprived from his/her rights in the inheritance. The rights of the state are also upheld where taxes on inheritance or even debts are to be paid prior to distribution. Under certain circumstances the State can also be one of the beneficiaries of the inheritance under Islamic jurisprudence.