2024, Imene Tabet, Tariqullah Khan

This paper explores how Islamic economics and finance, when developed as an embedded framework for regenerative development in line with Maqasid al-Shari'ah (the objectives of Islamic law), can facilitate the design of sustainable contracts and Islamic financial engineering. This framework provides a mechanism to achieve the paradigm shift advocated by Islamic finance scholars to accommodate the sustainability agenda into the practical applications of Islamic economics and finance. The paper specifically focuses on the Gulf Cooperation Council's (GCC) economies. This study employs an analytical research approach to evaluate the compatibility of Islamic social and commercial finance with sustainability objectives. The analysis is primarily qualitative and relies on the One Earth Framework proposed by Simpson et al. (2021) to structure the assessment of opportunities and challenges related to sustainability that Islamic economics and finance in the GCC region can help address. The paper highlights the potential of Islamic economics and finance as an embedded framework to address sustainability challenges in the GCC countries. By examining the capacity of Islamic finance to accommodate sustainability pathways, it elucidates avenues for integrating sustainable practices within Islamic financial contracts and institutions. One of the key contributions of this paper is the introduction and development of Islamic economics and finance as an embedded framework. This pioneering concept not only lays the groundwork for a practical mechanism but also signifies a fundamental step in realising the paradigm shift within Islamic finance. This transformative approach enhances the relevance and effectiveness of Islamic finance in fostering sustainability, marking a significant advancement in the field. While the study provides valuable insights, it primarily follows an analytical approach and does not involve quantitative analysis. It serves as a starting point for further research on the integration of sustainability objectives in Islamic finance.

2016, Md Aslam Mia, Imene Tabet

Microfinance institutions (MFIs) in Bangladesh have been providing savings services to their clients at least for the past 15 years. However, whether an MFI should have institutional requirement(s) to be a deposit-taker generates interest among academics and policy makers. Thus, this short note aims to provide a brief overview of institutional properties of MFIs. This study used the existing literature and reports by the Microcredit Regulatory Authority' to investigate institutional properties of MFIs. In doing so, we have used 'institutional theory of saving' as a theoretical ground. Although the 'institutional theory of saving' has several important properties, the existing literature mostly discusses seven features such as information, incentives, facilitation, expectation, access, restrictions and security. It is found that MFIs in general should have all the seven important institutional properties to be considered as an ideal savings institution. With regards to the microfinance sector in Bangladesh, this study supports that all the NGO-MFIs have these properties to be considered as an ideal deposit taker. The microfinance sector in Bangladesh needs to design and develop comprehensive and customer friendly savings products to further motivate the poor to save in MFIs.

2018, Monzer Kahf, Imene Tabet

Algeria depends solely on publicly produced housing. Algeria's housing industry has been lagging behind in its development. This has caused many citizens to struggle with finding proper housing. Aside from being one of the highest countries in terms of rent rates, construction and distribution of public houses in Algeria takes more than 15 years of waiting. Despite that the quality of the housing is bad. This paper proposes Shari'ah-compliant housing certificates, a new Islamic financial instrument that would assist in house construction in Algeria. This instrument uses istisna' as the underlying contract and accommodates guaranteed returns as well as negotiability for investors. It has great potential in contributing to solving the prolonged problem of housing in Algeria as well as countries facing problems in financing the construction of housing.

2024, Imene Tabet, Marjan Muhammad, Abdullah Hidayat Mohamad, Imene Tabet, Marjan Muhammad

Micro, small and medium-sized enterprises (MSMEs) play a pivotal role in driving economic growth, fostering innovation, and providing employment opportunities globally. According to the World Economic Forum (2021), MSMEs represent about 90 per cent of business establishments globally and contribute up to 70 per cent of both employment and global gross domestic product (GDP), accentuating their role as the backbone in many economies. As the global economy transitions towards more sustainable and responsible business practices, and environmental, social, and governance (ESG) factors become increasingly scrutinised, MSMEs are presented with both opportunities and challenges to align their operations with sustainability practices and ESG requirements. Yet, most of the existing sustainability assessment frameworks tend to cater for the needs of large corporations. Realising this gap, INCEIF University - in collaboration with Ficus Capital - has developed the Shari'ah-compliant ESG (ESG-i) Assessment Framework to assess sustainability practices among MSMEs in Malaysia. The ESG-i Assessment Framework serves as a starting point for MSMEs in understanding complex sustainability frameworks and taxonomies that are incongruent with their operational reality. By incorporating Shari'ah principles and embracing the Quadruple Bottom Line (QBL) concept - Planet, People, Profit, and Principle - the framework provides a comprehensive blueprint for evaluating sustainability practices among MSMEs. In contrast to the existing frameworks, the ESG-i Assessment Framework simplifies the criteria for evaluating sustainability practices among MSMEs and provides them with an assessment tool for them to comprehend and integrate into their businesses, regardless of their size and scale. The journey of developing the ESG-i Assessment Framework transcends theoretical constructs to achieve practical efficacy. The pilot phase, featuring a diverse set of MSMEs, not only demonstrates its real-world viability but also emphasises the need for a targeted approach in supporting MSMEs on their journey towards a Low Carbon, Circular and Resilient (LCCR) future. This aligns with the current strategic initiatives taken by many financial institutions and regulatory supervisory authorities driving transition finance. Building upon insights from the pilot phase and feedback from different stakeholders - regulators, practitioners, Shari'ah scholars, and academicians, the ESG-i Assessment Framework has undergone comprehensive enhancements. Aligned with the prevailing domestic ESG guidelines, taxonomies, and assessment framework (e.g., Securities Commission Malaysia (SC)'s Principles-Based Sustainable and Responsible Investment Taxonomy for the Malaysian Capital Market (SRI Taxonomy); Sustainable and Responsible Investment Sukuk Framework; Maqasid Al-Shariah Guidance Islamic Capital Market (Maqasid Guidance); Bank Negara Malaysia (BNM)'s Climate Change and Principle-Based Taxonomy (CCPT), Value-Based Intermediation (VBI); and SME Corporation Malaysia (SME Corp. Malaysia)'s PKS Lestari), as well as international sustainability assessment frameworks (e.g., B Impact Assessment by B Corporations (B Corp), ESG Score by Refinitiv, and standards issued by Global Reporting Initiative (GRI)), the ESG-i Assessment Framework provides a simplified tool developed in recognition of the reality of MSMEs' operations and capabilities. Hence, it serves as a transitional framework for them to embrace sustainability practices. It not only provides an assessment tool but also acts as a bridge to carry MSMEs through the evolving labyrinth that the global sustainability landscape represents. The ESG-i Assessment Framework beckons to be a catalyst for change and champions a more sustainable supply chain for MSMEs. The ESG-i Assessment Framework is increasingly crucial as the European Union's Carbon Border Adjustment Mechanism is set to take effect in 2024, bringing about substantial implications for the Malaysian economy, particularly impacting MSMEs, which contribute over 16 per cent to the country's exports. Economic Forum (2021). MSMEs represent about 90 percent of business establishments globally and contribute up to 70 percent of both employment and global gross domestic product (GDP), accentuating their roles as the backbone in many economies.

2021, Imene Tabet, Belal Ehsan Baaquie, Mohamed Eskandar Shah Mohd Rasid

The option pricing model introduced by Black-Scholes in 1974 gained wide acceptance for its simplicity but was inefficient in pricing options as it relied on implied volatility. Despite the evolution of various versions of option pricing models since their seminal work, little progress had been documented on the use of implied volatility, leaving Black-Scholes to be a mathematical identity to calculate the instantaneous implied volatility as it fails to be an efficient pricing equation. Although interpreted as market expectation of future volatility of stocks, implied volatility is literally a black box that captures market information that is not specifically known yet also internally inconsistent (e.g., having a different implied volatility surface for put and call options). The four main objectives of this thesis are: first, to empirically studying the performance of the Oscillator model developed by Baaquie (2019) and examining its efficiency in pricing options as compared to Black-Scholes model. The Oscillator model has only two sets of parameters in addition to the classical form of Black-Scholes; one to model for the underlying stochastic evolution of the stock price, and the second are of market time. Market time is a behavioural parameter introduced by Baaquie and Bouchaud (2004) which scales the time to maturity to capture the market sentiment of the underlying instrument. This thesis also introduced an alternative version of Black-Scholes by adjusting it for market time. Second, the thesis tested the put-call parity violation. Third, the thesis tested three main option hedging Greeks; Delta, Gamma, and Theta, which are partial differentiations of the option pricing equation. Fourth, the thesis discussed the calibrated output and parameters' behaviour to provide insights into the implied volatility information content and gain new understanding of the parametric gap of Black-Scholes particularly in the light of the Oscillator and Black-Scholes models adjusted for market time.