Airlangga International Journal of Islamic Economics and Finance

DOES ZAKAT AS AN ISLAMIC SOCIAL FINANCE INSTRUMENT, MAINTAIN PUBLIC PURCHASING POWER?

2025-04-22T13:44:59+07:00

The decrease in public purchasing power within Indonesian society in 2024 has emerged as a critical issue that may precipitate a broader economic crisis. This study aims to examine the function of zakat in enhancing public purchasing power and fostering economic stability through wealth redistribution. Zakat, as an Islamic social financial mechanism, has the potential to mitigate income inequality by augmenting the financial resources of marginalized groups, thereby increasing their aggregate expenditure. This study utilizes a literature review approach, adhering to the PRISMA model to systematically identify and analyse relevant articles. The findings suggest that productive zakat, which prioritizes economic empowerment through the allocation of business capital and training, exerts a substantial influence on the long-term economic independence of its beneficiaries. Moreover, zakat operates as an automatic stabilizer within the economy, aiding in the maintenance of public purchasing power, particularly during periods of economic strain. This study corroborates the hypothesis that zakat functions as a mechanism for income redistribution and has a multiplier effect that increases demand for goods and services, thereby promoting inclusive economic growth. Therefore, zakat has the potential to function as a strategic solution for enhancing public purchasing power, maintaining economic stability, and strengthening overall socio-economic resilience.

Keywords: Zakat, Purchasing Power, Economic Stability, Economic Empowerment, Islamic Economics.

OPTIMIZING SHARIA INVESTMENT PORTFOLIOS USING MODERN PORTFOLIO THEORY: A CASE STUDY OF ICBP AND SIDO IN INDONESIA STOCK MARKET

2025-07-25T15:12:48+07:00

This study evaluates the benefits of portfolio diversification by examining the relationship between the returns of Sido Muncul Tbk (SIDO) and Indofood CBP Sukses Makmur Tbk (ICBP) using Modern Portfolio Theory (MPT). Daily closing prices from October 1, 2023, to September 30, 2024, were analyzed. Daily returns were calculated and assessed using descriptive statistics, Pearson correlation, and mean–variance optimization to construct the efficient frontier and identify the optimal allocation. The results show ICBP offers a lower return (6.25%) and lower risk (1.92), while SIDO provides a higher return (7.35%) with slightly higher risk (1.97). Portfolio optimization suggests a 50/50 allocation yields the most balanced outcome, minimizing risk (1.46) while maintaining a solid return (6.80%). The low correlation (0.13) between the two stocks highlights significant diversification benefits. Practical implications include providing Shariah-compliant investors with empirical guidance to build efficient portfolios that balance return and risk. The study is limited by its use of only two stocks and a one-year observation period, which may affect the generalizability of results to broader market conditions.

Keywords: Modern Portfolio Theory, Portfolio Optimization, Efficient Frontier, Islamic Investment, Investment Decision-Making

DIGITAL TRANSFORMATION OF ISLAMIC FINANCIAL SERVICES: THE DIRECT IMPACT OF ISLAMIC DIGIBANK AND FINTECH ON TRUST AND INVESTMENT INTEREST

2025-07-10T10:52:18+07:00

This study investigates the influence of Islamic Digital Banking and Islamic Fintech on trust and investment interest, while also testing the mediating role of trust within these relationships. Employing a quantitative approach with path analysis through the Partial Least Squares (SmartPLS) method, the research involved 123 student members of the Islamic Economic Studies Forum (FoSSEI) in East Java as respondents. The results indicate that both Islamic Digital Banking and Islamic Fintech significantly enhance trust and directly increase investment interest, with trust functioning as a crucial mediator that connects the adoption of sharia-based digital financial services with investment behavior among young Muslims. Theoretically, these findings enrich the body of knowledge in Islamic digital finance by illustrating the interaction between technological innovation and spiritual values in shaping financial decision-making, while practically, they provide recommendations for regulators, financial institutions, and fintech developers to prioritize sharia digital literacy and design inclusive, ethical, and youth-oriented financial platforms. Despite these contributions, the study is limited by its relatively small and localized sample and by the use of cross-sectional data, which may restrict the generalizability of results and prevent observation of behavioral changes over time. Accordingly, future research is encouraged to adopt larger and more diverse samples, employ longitudinal or experimental methods, and consider additional variables such as religiosity, literacy, or risk perception to deepen understanding of Islamic digital finance. Overall, the research highlights that trust serves as a strategic cornerstone in linking Sharia-compliant financial technology with sustainable investment participation.

Keywords: Investment Interest, Islamic Digital Banking, Islamic Fintech, Path Analysis, Trust

DO SHARIA MUTUAL FUNDS, SHARIA BONDS (SUKUK), AND SHARIA STOCKS AFFECT INDONESIA'S ECONOMIC GROWTH?

2025-08-12T10:53:07+07:00

The growth of investment instruments is not always in line with national economic growth. This phenomenon raises questions about how much real influence Islamic capital market instruments have on Indonesia's economic growth. This study aims to examine the influence of sharia mutual funds, sharia bonds (sukuk), and sharia stock on Indonesia's economic growth from 2011-2024. This study uses a quantitative approach with Ordinary Least Squares (OLS) methods, multiple linear regression. The data used is quarterly time series data, with the sharia mutual fund indicator represented by the Net Asset Value (NAB), sukuk by the total issuance of corporate sukuk, and sharia stocks by the market capitalization of the Jakarta Islamic Index (JII). The results of the study show that, partially, sharia mutual funds and sharia stocks have a positive and significant effect on economic growth. However, Islamic bonds (sukuk) do not have a significant impact on economic growth.

Keywords: Sharia Mutual Funds, Sharia Bonds, Sukuk, Sharia Stocks, Economic Growth

HOW SHARIA MICROFINANCE INFLUENCES INFORMAL SECTOR ENTREPRENEURSHIP IN INDONESIA?

2025-09-26T10:31:40+07:00

This study examines the impact of Islamic microfinance on informal businesses in Indonesia, controlling for conventional bank credit, education, population density, and per capita income. Using panel data from 34 provinces (2013–2024) and a Fixed Effects regression model, the analysis shows that Islamic microfinance has a positive but insignificant effect on informal business numbers. Conventional credit also has an insignificant negative effect, while higher education significantly promotes informal entrepreneurship. Population density has a negative but insignificant impact. The findings suggest that education is the key driver of informal sector dynamics, whereas financial access—both Islamic and conventional—faces structural limitations. Strengthening human capital, expanding inclusive financing, and supporting the formalization of informal enterprises are crucial for inclusive development in line with Islamic economic principles.

Keywords: Islamic Microfinance, Informal Sector, Education, Population Density