International Journal of Islamic Economics and Finance (IJIEF)

Understanding The Behavior of Paying Professional Zakat: A Perspective on The Extended Theory of Planned Behavior

2024-06-12T21:34:30+07:00

The main objective of this research is to explore the factors that impact individuals' willingness to pay Zakat on their employment income or professional Zakat based on the Extended Theory of Planned Behavior (ETPB). The research approach employed in this study was quantitative research based on primary data. To gather the necessary data, a survey of civil servants (PNS) was conducted in five departments of the Yogyakarta City government, namely the Health Department, Environmental Department, Tourism Department, Education Department, and Agriculture Department. 145 valid questionnaires were analyzed using the partial least squares structural equation modelling (PLS-SEM). The findings of the research indicate that subjective norms, the credibility of Zakat Institutions, and information from Zakat management institutions positively impact the intention to pay Zakat. Nevertheless, the intention to pay Zakat was not positively influenced by attitude, perceived behavioral control, or understanding of the profession. This study's implications may assist regulators and policymakers in increasing public awareness of Zakat contributions. To achieve this, Zakat institutions could make efforts to improve dissemination, issue circulars, improve services, and promote transparency, particularly in the collection and distribution of Zakat funds

The Empowerment of MSMEs through Islamic P2P Financing: A Value-Based Social Entrepreneurship Framework

2025-07-21T09:34:52+07:00

Islamic Peer-to-Peer (P2P) financing has become a promising alternative to overcome capital barriers faced by Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. This study aims to examine the empowerment role of Islamic P2P financing through two complementary approaches. First, a descriptive qualitative method was employed to analyze the business models of Islamic P2P platforms and their integration with social entrepreneurship values. Second, a Systematic Literature Review was conducted to specifically assess the role of Islamic fintech in supporting MSME capitalization. The descriptive findings indicate that leading platforms such as ALAMI and Ammana integrate sharia contracts mudharabah, musyarakah, wakalah, and qardh to combine commercial goals with social impact. These practices reflect the principles of social entrepreneurship by enhancing inclusivity, ethical finance, and community empowerment. The SLR, based on 20 eligible articles published between 2019 and 2025, identified three main themes. First, models and financing schemes, including musyarakah, mudharabah, qardh al-hasan, and smart contracts that expand outreach and efficiency. Second, key success factors, such as trust, sharia compliance, literacy, technological innovation, and transparent information that drive adoption. Third, impact on financial inclusion and empowerment, highlighting contributions to MSME growth, poverty alleviation, inequality reduction, and integration with halal certification and community-based initiatives. Overall, the study confirms that Islamic P2P financing functions not merely as a financial intermediary but also as a driver of socio-economic transformation. Theoretically, it advances discourse on value-based financial innovation, while practically, it provides insights for policymakers, regulators, and practitioners to strengthen sharia fintech as a catalyst for MSME development and sustainable Islamic economic ecosystems.

The Effect of Macroeconomic and Internal Bank Factors on Distribution of Sharia Banking Mortgage in Indonesia

2024-10-25T09:04:19+07:00

Sharia mortgage financing growth in Indonesia is shaped by both macroeconomic conditions and internal banking performance. This study aims to examine the influence of macroeconomic variables, Industrial Production Index, inflation, BI rate and internal bank factors, Third-Party Funds, Non-Performing Financing of Sharia mortgages, and total assets on the distribution of Sharia mortgage financing in Indonesia. The research employs the Autoregressive Distributed Lag method. The results indicate that in the short term, all variables have a significant effect on Sharia mortgage financing. Industrial Production Index, inflation, Third-Party Funds, mortgage Non-Performing Financing, and total assets have a significant positive impact, while the BI rate has a significant negative effect. In the long term, only IPI and mortgage Non-Performing Financing show a significant positive influence on the distribution of Sharia mortgage financing. Inflation, the BI rate, and total assets have a positive but insignificant effect, while Third-Party Funds has a negative and insignificant effect. This study suggests that the government should implement appropriate macroeconomic policies, and Islamic banks should consistently maintain internal banking factors to optimize the distribution of Sharia mortgage financing. This will facilitate home ownership through Sharia mortgages and contribute to strengthening Indonesia’s economy, as the housing sector plays a strategic role with its capital and labour-intensive industries

Determinants of Economic Growth in OIC Countries: Comparative Analysis by Income Level

2025-07-17T14:41:00+07:00

Economic growth disparities among OIC member states remain a persistent challenge that demands nuanced, data-driven policy responses. This study investigates the determinants of economic growth in OIC member states from 2010 to 2022. This study offers new insights by analysing four macroeconomic variables, explicitly distinguishing between high and low-income nations. The study's approach provides an in-depth understanding of how each variable impacts different stages of development, supporting more adaptive monetary and fiscal strategies. Panel regression analysis was employed, with a random effects model applied to the low-income country group and a common effects model used for the high-income group. The findings reveal a consistent negative impact of private debt on economic growth across both income groups. In contrast, inflation exhibited no significant influence on economic development in either category. FDI has shown a positive effect on the economic development of high-income countries, while no significant effect was observed for low-income countries. Conversely, trade openness has significantly stimulated economic growth in low-income nations, whereas no significant impact has been observed in high-income countries. Based on these findings, policy recommendations for OIC member states should prioritize debt reduction strategies across all income levels. Policies to enhance FDI in developed economies and promote trade openness are essential for economic growth in low-income OIC member countries.

Determinants of Islamic Financial Institutions on Poverty Reduction: A Systematic Review

2025-07-17T15:03:25+07:00

This study explores the multifaceted determinants of Islamic Financial Institutions (IFIs) in alleviating poverty by employing a qualitative meta-synthesis approach guided by the ENTREQ protocol. The research synthesizes findings from 23 scholarly articles indexed in Scopus to identify key internal and external factors influencing IFI performance in poverty alleviation. These determinants are systematically categorized into a strategic quadrant model: internal-structural, internal-behavioural, external-structural, and external-behavioural. Internal-structural elements such as institutional capacity, operational models, access to capital, and adherence to Islamic values significantly affect the success of IFIs, while internal-behavioural dimensions highlight the roles of innovation, religiosity, and community-based initiatives. Externally, the legal and policy environment, cultural dynamics, public perception, and economic conditions emerge as critical influences on IFIs’ outreach and effectiveness. The findings reveal that IFIs often face challenges in maintaining their developmental focus due to resource limitations, regulatory gaps, and competitive financial landscapes. Nonetheless, when grounded in Islamic ethical principles and supported by appropriate institutional frameworks, IFIs demonstrate a strong potential to deliver inclusive financial services and uplift marginalized communities. The novelty of this study lies in its integrative approach to consolidating diverse themes into a coherent analytical framework, offering actionable insights for practitioners, regulators, and scholars. It emphasizes that successful poverty alleviation through IFIs requires a synchronized interplay of ethical commitment, institutional readiness, policy support, and grassroots participation. The results contribute to the development of strategic recommendations for enhancing the role of Islamic finance in addressing poverty across different socio-economic and regulatory contexts.

The Role of Religious-Based Empowerment in Enhancing Asnaf Entrepreneurs’ Success: Evidence from Jogokariyan Mosque, Indonesia

2025-07-07T07:50:12+07:00

Mosque-based Islamic microfinance uniquely combines religious values with community economic empowerment. This study examined the business success of Micro, Small, and Medium Enterprises (MSMEs) that receive financing and mentoring from Jogokaryan Mosque. The measurement of business success was viewed from the perspective of Maqasid Sharia, which includes business experience, business justice, business welfare, financial wisdom, and one additional variable: the quality of worship. The research method used was the Asnaf Muslimpreneur Success Index (AMSi) to gauge the level of business success among MSME actors. The study population consisted of MSME actors who received financing and participated in a series of programs organised by Jogokaryan Mosque. A sample of 56 respondents was obtained using a purposive sampling technique. The result showed that the level of business success among MSMEs associated with Jogokaryan Mosque was categorised as medium-high success. This success was beneficial for MSME actors and could be further enhanced through a series of supporting programs with consistent intensity. The implication of this study was to evaluate the empowerment program offered by Jogokaryan Mosque and enhance the quality of both program delivery and financing. In fact, the goal was to boost business success and empower MSME actors in their entrepreneurial endeavours