Evaluation of some key features of Islamic finance in non-Islamic economies

Bulgarian perspective

Authors

  • Miroslav Kamdzhalov University of Economics Varna

DOI:

https://doi.org/10.13135/2421-2172/6504

Keywords:

Islamic finance, Fuzzy AHP, Social responsibility, Social impact financing

Abstract

In recent years Islamic finance has steadily increased in popularity. In this respect, the research sets itself a task to evaluate some key features of Islamic finance in the Bulgarian financial market. To achieve this Fuzzy AHP method and deductive, inductive reasoning are used. The results show that the understanding of Islamic banking principles in Bulgaria has social banking characteristics. These characteristics are related to consumer expectations that can be defined as fundamental or basic such as the provision of a financial product or service, interest-free loans and securities with a social function for stakeholders. The results are unique and representative of the Bulgarian experts’ opinions, processed scientifically to showcase the potential of Islamic finance in the local financial market. Hitherto, presumably, no other research concerning Bulgaria has done such an evaluation. The main limitation of this research is the lack of Islamic financial institutions operating in the Bulgarian market. The research relies on the knowledge of local banking experts on Islamic finance principles. The findings can be applied in the decision-making process in the Islamic finance context.

Author Biography

Miroslav Kamdzhalov, University of Economics Varna

"International Economic Relations" Department

References

[1] Khavarinezhad, S., Biancone, P., & Jafari-Sadeghi, V. “Financing in the Islamic System and Sustainable Economic Development of Selected Islamic Countries”. European Journal of Islamic Finance, (19), 2021, 18-23.

[2] Afshari, A.R., Saeidi, H. and Hatami, P. "Identifying and Ranking Financial Parameters of Banks Using FUZZY AHP Method". Journal of Engineering Management and Competitiveness (JEMC) vol. 11, no. 1, 2021, 3-12.

[3] Hachami, K. E., Alaoui, Y. L. and Tkiouat, M.. "Sectorial evaluation of Islamic banking contracts: a fuzzy multi-criteria-decisionmaking approach". Investment Management and Financial Innovations, 16(2), 2019, 370-382. doi:10.21511/imfi.16(2).2019.31

[4] Ishizaka, A. and Hoang, N. "Calibrated Fuzzy AHP for current bank account selection". Expert Systems with Applications, 2013.

[5] Shapiro, A. and Koissi, M-C. „Fuzzy logic modifications of the Analytic Hierarchy Process“, Insurance: Mathematics and Economics 75, 2017, pp. 189–202.

[6] Ishizaka, A. and Nguyen, N.H. “Calibrated fuzzy AHP for current bank account selection”, Expert Systems with Applications 40, 2013, 3775–3783.

[7] Klir, G and Bo Yuan. “Fuzzy sets and fuzzy logic: theory and applications”, Prentice Hall PTR, 1995.

[8] Zadeh, L. A. “Fuzzy sets”, Information and Control 8, 1965, pp. 338-35.

[9] Calabrese, A., Costa, R., and Menichini, T. "Using Fuzzy AHP to manage Intellectual Capital assets: An application to the ICT service industry", Expert Systems with Applications 40, 2013, pp. 3747–3755.

[10] Brekke, T. "Halal Money: Financial inclusion and demand for Islamic banking in Norway". Research & Politics, 2018. https://doi.org/10.1177/2053168018757624

[11] Jan, S., Khan, Z. and Ullah, K. "Institutionalising Justice in Islamic Finance". Journal of Islamic Economics, Banking and Finance (JIEBF), Vol. 14, No. 1, 2018, Available at SSRN: https://ssrn.com/abstract=3182306

[12] Dzulkepli, S. and Barom, M. N. "Financial Inclusion and the Goal of Distributive Justice in Islamic Economics". The Journal of Muamalat and Islamic Finance Research, 18(1), 2021, 66-77. https://doi.org/10.33102/jmifr.v18i1.330

[13] Mirakhor, A.,and Iqbal, Z. "Financial Inclusion: Islamic Finance Perspective". Journal of Islamic Business and Management, 2(1), 2012, 35-64.

[14] Mahmood, H. "Impact of Islamic Microfinance on orrower’s Income in Pakistan- A Case Study of Akhuwat". European Journal of Islamic Finance, 2020.

[15] Nabi, M. G., Islam, M. A., Bakar, R., and Nabi, R. "Islamic microfinance as a tool of financial inclusion in Bangladesh", 2018. https:// doi.org/10.12816/0051154

[16] Belouafi, A., Bourakba, C. A. and Saci, K. "Islamic Finance and Financial Stability: A Review of the Literature". Journal of King Abdulaziz University: Islamic Economics, Vol. 28, No. 2, 2015, Available at SSRN: https://ssrn.com/abstract=3063842

[17] Franzoni S, Ait Allali A. “Principles of Islamic Finance and Principles of Corporate Social Responsibility: What Convergence?”, Sustainability. 2018; 10(3):637. https://doi.org/10.3390/su10030637

[18] Platonova, E. "Corporate Social Responsibility from an Islamic Moral Economy Perspective: A Literature Survey" . Afro Eurasian Studies 2, 2013, 272-297 https://dergipark.org.tr/en/pub/afes/issue/44783/557009

[19] Forte, G. and Miglietta, F. “A comparison of socially responsible and islamic equity investments”, Journal of Money, Investment and Banks, Issue 21, 2011, pp. 116-132

[20] Ait Allali, A. “Corporate governance and Corporate Social Responsibility in Islamic Banking: The case of the Moroccan banks in Italy”. European Journal of Islamic Finance, (4), 2016.

[21] Alkhan, A.M. and Hassan, M.K. “Does Islamic microfinance serve maqāsid al-shari'a?”, Borsa Istanbul Review Volume 21, Issue 1, March 2021, pp. 57-68.

[22] Litardi, I., Fiorani, G. and Harb, D. „Corporate Social Responsibility in Islamic Culture. Comparison between Western CSR and Islamic CSR: Focus on Islamic Reporting Initiative and Islamic Financial Institution”, European Journal of Islamic Finance, 2019.

[23] OECD “Understanding Social Impact Bonds”, 2016. Available from: https://www.oecd.org/cfe/leed/UnderstandingSIBsLux-WorkingPaper.pdf. Accessed at 15th Aug 2021.

[24] Lanzara, F. “Islamic finance and Sustainable Development Goals. A bibliometric analysis from 2000 to 2021”. European Journal of Islamic Finance, (18). 2021. https://doi.org/10.13135/2421-2172/5765

[25] Biancone, P., & Radwan, M. “ Social Finance and Financing Social Enterprises: An Islamic Finance Prospective”. European Journal of Islamic Finance. 2019. https://doi.org/10.13135/2421-2172/3176

[26] Sulayman, H. "Values-based Curriculum Model: A Practical Application of Integrated ‘Maqasid Al-Sharia’ for Wholeness Development of Mankind", Procedia - Social and Behavioral Sciences 123. 2014. Pp. 477 – 484.

[27] Alkhana, A.M. and Hassan, M.K. "Does Islamic microfinance serve maqāsid al-shari'a?". Borsa Istanbul Review Volume 21, Issue 1, 2021, Pages 57-68

[28] Campra, M., Brescia, V., Jafari-Sadeghi, V., & Calandra, D. “Islamic countries and Maqasid al-Shariah towards the circular economy. The Dubai case study”. European Journal of Islamic Finance, (17), 2021. https://doi.org/10.13135/2421-2172/4560

[29] Sileryte, R., Sabbe, A., Bouzas, V., Meister, K. Wandl, A. and Arjan van Timmeren, A. "European Waste Statistics data for a Circular Economy Monitor: Opportunities and limitations from the Amsterdam Metropolitan Region", Journal of Cleaner Production, 2022, 131767, https://doi.org/10.1016/j.jclepro.2022.131767.

[30] Castro, C.G., Trevisan, A.H., Pigosso, D. and Mascarenhas, J. "The rebound effect of circular economy: Definitions, mechanisms and a research agenda", Journal of Cleaner Production, Volume 345, 2022, 131136, https://doi.org/10.1016/j.jclepro.2022.131136.

[31] Kris Hartley, K., van Santen, R., and Kirchherr, J. "Policies for transitioning towards a circular economy: Expectations from the European Union (EU)", Resources, Conservation and Recycling, Volume 155, 2020, 104634, https://doi.org/10.1016/j.resconrec.2019.104634.

[32] Andrikopoulos, A. “Delineating social finance”. International Review of Financial Analysis 70. 2020.

[33] Iannaci, D., & Gideon Mekonnen, J. “Islamic finance and social finance, an opportunity for social enterprises”. European Journal of Islamic Finance. 2020. https://doi.org/10.13135/2421-2172/4242

[34] Hartono, S. and Sobari, A. "Sharia Maqashid Index as a Measuring Performance of Islamic Banking: a more holistic approach". Corporate Ownership & Control / Volume 14, Issue 2, 2017.

[35] Asutay, M. and Harningtyas, A.F. "Developing Maqasid al-Shari’ah Index to Evaluate Social Performance of Islamic Banks: A Conceptual and Empirical Attempt". International Journal of Islamic Economics and Finance Studies, 2015, Volume:1, Number:1

[36] Salman, K. “ Islamic Governance, Maqashid Syariah, and Islamic Social Reporting: The Case of Islamic Banks in Indonesia”. European Journal of Islamic Finance, (19), 2021, 24-34. https://doi.org/10.13135/2421-2172/6116

[37] Hamed, M. “The Role of Islamic Social Finance in Mitigating Humanitarian Crises”. European Journal of Islamic Finance, (16), 2020. https://doi.org/10.13135/2421-2172/4937

[38] Qoyum, A., Sakti, M., Thaker, H. and AlHashfi, R. "Does the islamic label indicate good environmental, social, and governance (ESG) performance? Evidence from sharia-compliant firms in Indonesia and Malaysia". Borsa Istanbul Review 22-2, 2022, 306-320.

[39] Campra, M., Pucci, S., & Brescia, V. “Can the Dow Jones Sustainable Index be useful for evaluating Dow Jones Islamic Market companies?”. European Journal of Islamic Finance. 2020. https://doi.org/10.13135/2421-2172/4156

[40] Radwan, M., & DRISSI, S. “ANALYSIS OF THE TRANSMISSION ASYMMETRY OF MONETARY POLICY IN A DUAL BANKING SYSTEM: ECONOMETRIC MODELLING (CASE OF TURKEY)”. European Journal of Islamic Finance. 2020. https://doi.org/10.13135/2421-2172/4227

[41] Biancone, P., & Radwan, M. “EUROPEAN COMPANIES: EVALUATION FOR SHARIA COMPLIANCE “OPPORTUNITIES AND CHALLENGES””. European Journal of Islamic Finance, (5). 2016. https://doi.org/10.13135/2421-2172/1803

[42] Darusa, F. Shukrib, N. H. A., Yusoffa, H., Ramlia, A., Zaina, M. and Abu Bakarc, N. A. "Empowering social responsibility of Islamic organizations through Waqf". Research in International Business and Finance 42, 2017, 959–965.

[43] Yesuf, A. J. and Aassouli, D. "Exploring synergies and performance evaluation between Islamic funds and socially responsible investment (SRIs) in light of the Sustainable Development Goals (SDGs)". Heliyon 6 , 2020, e04562.

[44] Bananuka, J., Kaawaase, T. K., Kasera, M. and Nalukenge, I. "Determinants of the intention to adopt Islamic banking in a non-Islamic developing country The case of Uganda". ISRA International Journal of Islamic Finance, 2019. DOI 10.1108/IJIF-04-2018-0040

[45] Hunjra, A. I., Islam, F., Verhoeven, P. and Hassan, M. K. "The impact of a dual banking system on macroeconomic efficiency", Research in International Business and Finance, Volume 61, 2022, 101647, https://doi.org/10.1016/j.ribaf.2022.101647.

[46] Kamdzhalov, M. “Islamic Finance and the New Technology Challenges”. European Journal of Islamic Finance. 2020. https://doi.org/10.13135/2421-2172/3813

[47] Kalimullina, M. "Islamic finance in Russia: A market review and the legal environment". Global Finance Journal, 46, 2020. https://doi.org/10.1016/j.gfj.2020.100534

[48] Secinaro, S., Calandra, D., Petricean, D. and Chmet, F. "Social Finance and Banking Research as a Driver for Sustainable Development: A Bibliometric Analysis". Sustainability, 2021, 13, 330. https://doi.org/10.3390/su13010330

[49] Bollani, L., & Chmet, F. "Bibliometric Analysis of Islamic Finance". European Journal of Islamic Finance. 2020. https://doi.org/10.13135/2421-2172/4936

[50] Antoniazzi, S. "Islamic Banks and the European Banking Union: An Overview of Critical Issues and Perspectives". European Journal of Islamic Finance, 9(1), 2022, 37-55. https://doi.org/10.13135/2421-2172/6424

[51] Kamdzhalov, M. "Legal aspects in implementing Islamic finance in conventional banking systems". The Law and the Business in the Contemporary Society, Varna, 2019, 270-279. ISSN 2603-5073

Downloads

Published

2022-07-19

How to Cite

Kamdzhalov, M. (2022). Evaluation of some key features of Islamic finance in non-Islamic economies: Bulgarian perspective. European Journal of Islamic Finance, 9(2), 9–17. https://doi.org/10.13135/2421-2172/6504

Issue

Section

Peer-reviewed Articles

Similar Articles

<< < 8 9 10 11 12 13 14 15 > >> 

You may also start an advanced similarity search for this article.