Journal of Islamic Business and Management

An Ethical Compass for the Digital Frontier: Sharīʿah Governance in Fintech Micro and Nano Financing

2025-06-27T01:30:56+00:00

The rapid integration of Fintech into the Islamic financial landscape, particularly in the
realm of Micro and Nano Financing, presents a duality of opportunity and challenge. On
one hand, technology promises enhanced reach, efficiency, and potentially easier
mechanisms for adhering to Sharīʿah principles , thereby driving financial inclusion within
Muslim communities. However, this digital evolution highlights a critical need for a robust,
Sharīʿah-based governance framework to navigate the complex ethical issues inherent in
these schemes. The role of Sharīʿah governance in Fintech-based Micro and Nano
Financing services offered by Islamic Financial Institutions (IFIs) is not merely
supplementary; it is absolutely critical for ensuring these services remain true to the spirit
and letter of Islamic law and serve the broader interests of society

Smart Participation Contract Matrix for Islamic Banks: An Institutional Theory Perspective

2024-11-29T07:52:26+00:00

Purpose: This study aims to explore how smart contract (SC) technology can be integrated into the Islamic Banking (IB) system to improve its overall functionality, particularly in terms of

operational efficiency and adherence to Sharīʿah principles. Method: This paper has used design science research method in order to produce an artifact of Islamic smart contract.Results: The study argues that traditional paper-based Islamic participation contracts (Mushārakah) can be digitized into blockchain-based smart contracts for greater efficiency. The matrix synthesizes elements of Islamic contracts and blockchain

technology into sixteen constructs, combining the principles of Islamic banking (parties, offer and acceptance, subject matter, and profit/loss sharing) with those of blockchain technology (transparency, immutability, security, and consensus). This integration offers new insights into building core banking structures on blockchain and Islamic banking principles to enhance efficiency, financial inclusion, and institutional legitimacy. Key findings indicate that Islamic smart contracts (ISC) save costs and time while improving efficiency and financial inclusion. However, challenges include Sharīʿah compliance, technological complexity, regulatory fragmentation, and scalability issues.

Implication: This study has implications for Islamic banking industry, banking regulatory authorities and FinTech literature

Smart Entrepreneurial Learning and the Tawhidic Paradigm: A Holistic Approach to Knowledge Acquisition in Islamic Business

2025-02-11T06:37:14+00:00

Purpose: This study aims to explore how smart contract (SC) technology can be integrated into the Islamic Banking (IB) system to improve its overall functionality, particularly in terms of operational efficiency and adherence to Sharīʿah principles.

Method: This paper has used design science research method in order to produce an artifact of Islamic smart contract.

Results: The study argues that traditional paper-based Islamic participation contracts (Mushārakah) can be digitized into blockchain-based smart contracts for greater efficiency. The matrix synthesizes elements of Islamic contracts and blockchain technology into sixteen constructs, combining the principles of Islamic banking (parties, offer and acceptance, subject matter, and profit/loss sharing) with those of blockchain technology (transparency, immutability, security, and consensus). This integration offers new insights into building core banking structures on blockchain and Islamic banking principles to enhance efficiency, financial inclusion, and institutional legitimacy. Key findings indicate that Islamic smart contracts (ISC) save costs and time while improving efficiency and financial inclusion. However, challenges include Sharīʿah compliance, technological complexity, regulatory fragmentation, and scalability issues.

Implication: This study has implications for Islamic banking industry, banking regulatory authorities and FinTech literature.

The Role of Customer Trust towards the Adoption of Islamic Banking in Nigeria

2025-04-03T07:27:52+00:00

Purpose- There is an argument that most Islamic banks do not fully adhere to Islamic principles, which causes mistrust. Thus, this study aims to establish how trust mediates the relationship between compatibility, relative advantage, and adoption of Islamic banking.

Methodology- Data from 380 Islamic bank customers were used in this study. Structural equation modelling (SEM) analysis was utilized.

Finding- The findings showed that relative advantage and compatibility have impact on the adoption of Islamic banking through trust. Thus, trust mediates the association between compatibility and adoption of Islamic banking, whereas trust partially mediates the relationship between relative advantage and adoption of Islamic banking.

Practical implication- Islamic bank operators should utilize the study's findings to create marketing efforts that will boost the integrity of Islamic banking. To increase client trust, Islamic bank management should prioritize implementing Islamic principles.

Originality- The role of trust in mediating compatibility, relative advantage, and adoption of Islamic banking has not been extensively explored. Thus, this study discovered that trust is important in the adoption of Islamic banking due to the trust deficit recorded among some Islamic bank operators.

Towards an Inclusive Risk Management Alternative: An Exploration of Cultural Responsivity of Pakistani Takāful Market

2025-03-19T05:32:57+00:00

Purpose: This study is conducted to explore the factors that affect the intention of people from different faiths in adopting Takāful. For this purpose, relevant literature was reviewed, and a pre-empirical conceptual framework was developed. The framework included the relevant and important constructs, according to which the interview questions were designed and fine-tuned.

Method: This study used two of Non-Probability sampling techniques i.e., convenience sampling and purposive sampling. This research is conducted qualitatively; 10 interviews are conducted from policyholders with minority religions and faiths and 5 interviews from Takāful practitioners and experts, a total of 15 interviews, contributed to a substantial amount of data. However, the data was reduced for the purpose of analysis in this piece.

Results: The findings of the study revealed that Consumer Awareness, Perceived Behavioral Control and Complexity directly affects the intention of minorities in adopting Takāful. Furthermore, all these factors along with Agent’s Behavior, Effective Marketing, Customer Experience and Needs of Customers were also identified as moderators. Security of Capital and Transparency in Takāful Process were the two new factors identified during data collection.

Impact of Islamic Finance and Islamic Banking on Financial Stability: A Systematic Literature Review

2025-05-26T01:07:15+00:00

Purpose: Islamic Finance has emerged as a significant tool for financial development, with a 12% annual increase. It is regarded as a prominent component in achieving financial stability, grounded in the concepts of risk-sharing and profit-sharing. With its rapid expansion, previous research has sought to ascertain its impact on financial stability. However, there has been considerable uncertainty regarding which areas or concepts warrant further focus. This review responds to gaps left by Belouafi et al., (2015) and others, offering a comprehensive synthesis of recent studies (2016–2023) to re-evaluate Islamic finance's contribution to financial stability.

Research Design: The authors conduct an in-depth analysis of existing journals to create a systematic review of Islamic finance and its impact on financial stability, with a focus on studies published from 2016 to 2023.

Findings: The review reveals that Islamic banking, underpinned by principles such as profit-sharing, risk-sharing and the prohibition of interest (Ribā), offers distinctive advantages in fostering financial stability. These characteristics have positioned Islamic banks as resilient entities, especially during periods of economic distress, aligning with previous findings that highlight their robust performance in times of crisis.

Significance: The findings emphasize Islamic finance's value in promoting global banking resilience and ethical finance.

Future Research: Future research should aim to deepen the understanding of Islamic finance’s unique characteristics, explore its adaptability to diverse economic environments, and develop strategies for integrating it into a more cohesive and resilient global financial system.