Islamic Finance and Sustainable Development: A Sustainable Economic Framework for Muslim and Non-Muslim Countries

Foreword
Contents
List of Contributors
List of Figures
List of Tables
1 Introduction
Part I Islamic Finance and Sustainable Development Goals: Two Sides of the Same Coin
2 Need to Redefine Islamic Finance in the Light of Maqasid Al-Shariah
	1 Introduction
	2 Maqasid Al-Shariah in a Nutshell
	3 Need to Redefine Islamic Finance in the Light of Maqasid Al-Shariah
		3.1 Merging Islamic Finance with SDGs
		3.2 Merging Islamic Finance with Circular Economy
		3.3 Merging Islamic Finance with Impact Investing
		3.4 Merging Islamic Finance with Ethics
		3.5 Merging Islamic Finance with Value-Based Intermediation (VBI)
	4 Roadmap to Align Practices of Islamic Finance to Maqasid Al-Shariah
	5 Conclusion
	References
3 Pandemic Crisis, Digitalization and Social Responsibility: An Emerging Role of Islamic Economics and Finance
	1 Introduction
	2 Effect of Covid-19 on Islamic Economics and Finance
	3 Redefining the Scope of Islamic Economics and Finance in the Light of Effects of the Pandemic
	4 Recommendation: Towards Convergence of Digitalization and Social Responsibility in Islamic Economics and Finance
	5 Conclusion
	References
4 Islamic Finance and SDGs: Connecting Dots
	1 Introduction
		1.1 Islamic Banking
		1.2 Islamic Insurance
		1.3 Islamic Capital Markets
	2 Introduction to Sustainable Development Goals (SDGs)
		2.1 History of the Development of SDGs
		2.2 Overview and Progress
	3 Financing Sustainable Development
		3.1 The Economic Aspect of Financing SDGs: A Comparison of Conventional and Islamic Views
	4 Islamic Finance and SDGs
		4.1 Linking Islamic Finance Principles to SDGs
		4.2 Maqasid e Shari’ah in Relation to SDGs
		4.3 The Role of Islamic Finance in Sustainable Developments
			Increasing Financial Sector Stability and Resilience
			Enhancing Financial Inclusion
			Reducing Vulnerability and Mitigating Risk
			Resolving Social and Environmental Problems
			Facilitating Infrastructure Development
		4.4 Resource Mobilization Modes for Sustainable Development
		4.5 Global Examples
	5 Future Outlook
	References
5 Islamic Finance: A Literature Review
	1 Introduction
	2 Review of the Literature
	3 Conclusion
	References
6 The Role of Islamic Finance in Achieving Sustainable Development Goals (SDGs)
	1 Introduction
	2 Overview of Shariah and SDGs
	3 The Role of Islamic Finance in Achieving SDGs
	4 Assessing Islamic Financial Products and Their Contribution in Achieving SDGs
		4.1 Sustainable Development Instruments
		4.2 Case Studies on the Contributions of Islamic Finance Toward SDGs
	5 Conclusion
	References
7 Islamic Finance and SDG 10: Evidence from Selected OIC Countries
	1 Introduction
	2 Nature and Origin of Islamic Banks
	3 State of Islamic Financial Services Industry (IFSI)
		3.1 Inevitable Shift Toward the East
		3.2 What is the Current Outlook of IFSI?
		3.3 IFSI from the Perspective of Microeconomics
		3.4 Has IFSI Fulfilled Its Promises?
	4 Income Inequality in Economic Literature
	5 Empirical Analysis
		5.1 Data and Method
		5.2 Findings
	6 Conclusion
	References
8 The Role of Islamic Financial System in Building Sustainable Infrastructure
	1 Introduction
	2 Characteristics of Infrastructure Projects and Financing Arrangements
	3 Sustainability and Infrastructure
		3.1 Sustainability, Sustainable Development and SDGs 2030
		3.2 The Notion of Sustainability in Infrastructure
	4 Infrastructure Categorization, Investment Needs and Funding Gaps
		4.1 Categorization of Infrastructure
		4.2 Investment Needs and Funding for Building Sustainable Infrastructure
			At the Global and Regional Level
	5 Financing the Sustainable Infrastructure—Investment Options in Conventional Finance
	6 Investment in Sustainable Infrastructure Through Islamic Finance
		6.1 Building and Funding the Infrastructure in Muslim Civilization
		6.2 State of Islamic Financial Services Industry
	7 Shari’ah Compliant Options to Build Sustainable Infrastructure
		7.1 Government
		7.2 Government Linked Companies and State-Owned Enterprises
		7.3 Multilateral Development Institutions
		7.4 Islamic Banks and Development Finance Institutions
		7.5 Islamic Capital Markets—Sukuk, Funds and Equity
		7.6 Public–Private Partnership
		7.7 Islamic Social Finance—Waqf, Zakat and Sadaqat
		7.8 Crowdfunding the Infrastructure
	8 Covid-19 and Impact on Infrastructure Investment
	9 Concluding Remarks and Moving Forward
	References
Part II Islamic Finance and Factors of Environmental, Social and Governance (ESG)
9 Sustainable Finance and a Sharī’ Analysis of Environmental, Social and Governance (ESG) Criteria
	1 Introduction
	2 Literature Review
		2.1 ESG Concepts
	3 Methodology
	4 Findings and Discussion
		4.1 Sharī’ah Principles Related to ESG
		4.2 ESG from the Sharī’ah Perspective
			Synergies and Contradictions of ESG Elements from Sharī’ah Principles
			Synergies and Contradictions of Environmental Elements from Sharī’ah Principles
			Synergies and Contradictions of Social Elements from Sharī’ah Principles
			Synergies and Contradictions of Governance Elements from Sharī’ah Principles
	5 Conclusion and Recommendation
	References
10 Finance as a Source of Ecological Quality: Islamic Ethics of Environment and Empirical Evidence
	1 Introduction
	2 Literature Review
		2.1 Environmental Context of Islam
			Human Beings
			Water
			Air
			Land
			Plants
			Animals
			Other Natural Resources
		2.2 Islamic Finance and Sustainability
		2.3 Environmental Degradation and OIC Countries
		2.4 Environment and Financial Development Nexus: Empirical Evidence
	3 Data, Econometric Specification, and Methodology
		3.1 The Data
		3.2 Econometric Specification and Data Description
		3.3 Construction of the Variables
		3.4 Methodology
		3.5 Descriptive Statistics
	4 Results and Discussion
		4.1 Results of Pooled OLS
		4.2 Results of Fixed Effects
		4.3 Results of Random Effects
		4.4 Results of System GMM
	5 Conclusion
	References
11 Islamic Finance and Sustainable Economy: A New Model of Islamic Financial Ecosystem
	1 Introduction
	2 True Goals of Islamic Finance Existence
	3 The Relevance of SDGs to Islamic Finance
	4 Proposed Islamic Financial Ecosystem Which Supports Sustainable Development Goals
		4.1 Social Inclusion Dimension
		4.2 Economic Growth Dimension
		4.3 Environmental Protection Dimension
		4.4 Proposed Islamic Financial Ecosystem
	5 Concluding Remarks
	References
12 Islamic Finance System as a Catalyst for Sustainability in the Economy
	1 Characteristics of Sustainable Financial System
	2 Main Components of the Sustainable Financial System
	3 Transformation of Sustainable Financial System into Capitalist Form
	4 Sustainable Development in Terms of Islamic Economy
	5 UN’s Sustainable Development Goals (SDGs) and Their Impact on Islamic Finance
		5.1 Market-Driven Transformations
		5.2 Long-Term SDG Transformations
	6 Conclusion
	References
Part III Islamic Financial Institutions and Sustainable Development
13 Qard Hasan (Interest-Free Loan) as a Tool for Sustainable Development—Global Evidence
	1 Introduction
	2 Literature Review and Hypothesis Development
	3 Methodology
		3.1 Data
		3.2 Model Development
	4 Results and Discussion
		4.1 Results
		4.2 Robustness Test
		4.3 Analysis
	5 Conclusion
	Appendix A
	Appendix B
	References
14 Contribution of Islamic Banks on Financial and Economic Stability: An Empirical Comparison Between Conventional and Islamic Banks
	1 Introduction
	2 Comparison of Banks to Financial Stability
	3 Model and Empirical Findings
	4 Conclusion
	Appendix
	References
15 Proposing New Islamic Microfinance Model for Sustainable Islamic Microfinance Institution
	1 Introduction
		1.1 Background
		1.2 Objective
	2 Liteature Reviews
		2.1 Islamic Microfinance
		2.2 Financial Technology
	3 Methodology
	4 New Sustainable Islamic Microfinance Model for Imfi
		4.1 Characteristics of Micro-Fintech Model for IMFI/BMT
		4.2 Robustness
		4.3 Proposed Micro-Fintech Models for IMFI/BMT
		4.4 Discussions
	5 Concluding Remarks
	References
Index