ISLAMIC FINANCIAL INSTITUTIONS
ISLAMIC FINANCIAL INSTITUTIONS
I. INTRODUCTION
Islamic law is basically a standard concept, but the trip did not rule do Ijtihad - Ijtihad in the field are not allowed during a frame out of the Islamic Sharia. Thus Islam was really able to answer all the times. Similarly, the Islamic economic system which is an inseparable part of the Islamic system, was also not spared from the activities of ijtihad. Thus the Islamic economic system is expected to be able to answer and resolve the economic problems faced by humanity, with no out and violating provisions of the law of Allah SWT. This system has the inherent supervision every individual economic actors rooted in faith and faith in Allah SWT. This system also harmonize between individuals with kemashlahatan crowd kemashlahatan.
The concept of Islamic justice in the economy (especially in the distribution of income) requires all elements of production factors earn a reward in accordance with their respective contributions. Factors of capital, labor, material assets, and entrepreneurship, should be fairly. In the Islamic view of capital (money) by itself does not have much meaning, the new capital if there are significant other factors such as labor. Money by itself will not produce anything, but if you want to make the money should be invested in the real sector.
Islam as a religion is a system that provides guidance for mankind to run this life well and correctly. Whether in relation to the things that regulate human relationships with God (worship), and that the set of human relationships with other human beings (mu'amalah). Worship is needed in order to maintain harmony ketaataan and the relationship between human beings and Khaliq, and to continually remind the human task as caliph on earth. Provisions muamalah be reduced to rules of the game in human existence as social beings.
As Muslims we are commanded to assume good faith for the Islamic system. We must believe that Islam (including the economic system) will be able to resolve the various problems faced by humans. This belief must continue to be cultivated and nourished, especially in the Islamic Ummah. With the way open and display the theoretical order to the practical order. If usury is forbidden by any mode, of course, be no way out that can replace his position. If financial institutions are still practicing usury, of course, must be provided a financial institution far from usury. When God forbid something, the real God who justifies the others whose numbers far more and better for his people.
II. ISLAMIC FINANCIAL INSTITUTIONS
Islamic Financial Institutions or the more popular is called Financial Institution Shariah is a financial institution operating principle is based on the principles of Islamic Shari'a. In the operations of Islamic financial institutions must avoid usury, gharar and maisir.
The main objective of establishing Islamic financial institutions is to fulfill God's command in the economic field and muamalah and liberate the Islamic community of the activities prohibited by Islam. To carry out this task and solve problems that traps Muslims today, is not only a task a person or an institution, but it is a duty and the duty of every Muslim. Applying the principles of Islam in society berekonomi and very necessary to treat the disease in the social and economic world faced by the community.
The Mit Ghamr Bank Egypt is a modern Islamic financial institution first established in 1963. The development and progress Mit Ghamr revive the Muslim economists and scientists, was the Islamic system can bring progress. But at the same time it invites the success of jealousy and envy the people who do not like the system of Islam, and eventually closed Mit Ghamr. Mit Ghamr birth was followed by the establishment of Islamic banks in various countries, both in Islamic countries (mostly Islamic) countries, including Indonesia and the non-Muslims.
Rationale for the development of Islamic financial institutions in Indonesia is to provide services to some of the people of Indonesia can not be served by financial institutions that already exist in Indonesia, because the banks operate the system of interest. Some people are predominantly Muslim Indonesia, believes that the activities of financial institutions is a practice incompatible with the interest of Sharia Islamic principles, so that their participation in the financial sector is not optimal. With the development of financial institutions being run by the principles of Sharia are expected throughout the economic potential of Indonesian society that has not been optimized could be optimized.
Issuance of Law No.7 of 1992 on Banking, opening opportunities of financial institutions that operated based on Shariah principles. Capitalize opportunities given these laws, had standing financial institutions of Sharia, which is a commercial bank (Bank Muamalat Indonesia), 52 rural banks (BPRS), 1300 Baitul Maal Wattamwil (BMT), a Sharia Mutual Funds (PT. Danareksa) and an Emerging Markets (BNI-Faisal Islamic Finance). Although quantitatively the volume of business these institutions are still very small compared to the total volume of business of financial institutions nationwide, but the repercussions have been heard almost evenly among Muslims in Indonesia today.
Then the government improve the Act No.7 / 1992 by issuing Law No. 10 in 1998. Law No.10 provides opportunities for the widest possible establishment of Islamic financial institutions. Even in this Law Islamic Financial Institutions and status positions that aligned with its partners who have been there first.
III. FORM OF ISLAMIC FINANCIAL INSTITUTIONS IN INDONESIA
1. BANK ISLAM
Banking as claimed by Alvin Toffler in his book "Third Wave" is the most important institution in the modern financial system. Therefore it can also be said to include usury in the banking system means accepting usury in the financial system and the theories which includes in that field. Banking also has a very strategic position in encouraging business activity and economic growth. Therefore the government must continue to strive to optimize the economic potential of communities, especially Muslims through Islamic banking.
Seeing the huge potential of Indonesian society and still crave banking without interest, the Bank Indonesia's government continues to encourage the development of Shariah banks through improving the provision of banking and dissemination efforts of Sharia Banking System.
To avoid the operation of the bank with interest rate system, Islam introduced mu'amalah principles of Islamic banking as an alternative to the business activities as follows:
A. Gathering Activities Fund
Giro (wadiah)
Savings (Mudharabah)
Savings Deposits (Mudharabah)
B. Disbursement
Sale and Purchase (Al-Buyu ')
* Murabaha
* Greetings
* Istishna '
* Ijarah Muntahiyyah Bittamlik
Partnership (Profit Sharing)
* Musharaka
* Mudaraba
* Mudaraba Muqayyadah
Service (Ujrah) - Fee Based
* Qard
* Rahn
* Hawalah
* Wakalah
* Kafalah
2. ISLAMIC INSURANCE
Basically the concept of insurance is acceptable in Islam as long as not violating the principles and rules which are prohibited by the Shariah. And scholars argued that the insurance is running now contains the ways that are not in accordance with Shariah. Therefore, alternatives need to be made.
Fiqh Academy - Organization of Islamic Countries in the meeting in Jeddah on 22-28 December 1985 concluded about insurance:
The commercial insurance contract, with a fixed periodical premium, which is commonly used by commercial insurance companies is a contract which contains major elements of risks, which voids the contract and therefore is prohibited (haram) according to the Shari'ah.
The alternatives contract which conforms to the principles of Islamic dealings is the contract of cooperative insurance, which is founded on the basis of charity and cooperation, Similarly in the case of reinsurance based on the principles of cooperative insurance.
Malaysian National Fatwa Committee in his fatwa dated June 15, 1972 said:
Life insurance offered by insurance companies today is a business transaction that is not kosher, because contrary to the principles of Islamic business. The deal still contains gharar (uncertainty), maisir (gambling) and riba (interest).
Islam is a insurance means insurance undertaken based on the principle of takaful, a cooperation scheme based on ukhuwah values, solidarity, mutual assistance to provide financial assistance to the takaful participants if needed and they agreed to contribute to the achievement of these goals. Therefore it can be concluded that the basic concept of takaful is: mutual responsibility, cooperation and help each other and protect each other.
Takaful fund management mechanism:
Each participant must pay a regular premium to the manager (insurance companies)
Participants can pay the premium every month, quarter, semester, or yearly according to the agreement.
Great premium depends on the ability of participants, but the manager (insurance companies) can determine the minimum amount.
Payment methods can be done directly or indirectly.
Any premium paid by the participants split into two accounts:
1. Savings Account. These savings in the form of savings mudaraba, as Shahibul Maal participants and organizers as mudarib. Savings and the results will be returned to the participant if the agreement expires, the participant resigns or dies participants.
2. Tabarru account, which is a collection of funds intended by each participant as a good contribution for the purposes of mutual help and mutual support if one of the unfortunate participants. If the agreement had expired and there are surplus funds can be distributed to participants.
Takaful can also run the premium is wholly tabarru (no savings element), but in doing this type should be run with very open and with a good understanding. Participants and organizers should have a high commitment. In practice not to happen maisir and other fraudulent behavior.
3. MUTUAL FUNDS Sharia
According to Indonesian legal sense in mutual funds is the container used to collect funds from public investors to invest further in the portfolio securities by the investment manager.
Delivery of the funds committed by investors need assurance that the fund managers do not act improperly. Therefore, it needs to be an institution that guards the treasure in the form of securities. Custodian is the agency which is a bank, so-called Custodian bank.
All investments made by Mutual funds must follow the Shariah restrictions are strictly Syar'i. Shariah mutual fund will not invest into companies that produce the main business, sell, distribute and trade in:
Food and beverage unlawful
Gambling and gaming with gambling
Financial institutions ribawi
Pornography
and other illicit activities.
4. PENSION FUND FINANCIAL INSTITUTIONS
To obtain a full pension after the task is an ideal expectations for every worker. Especially after so many years of devoted effort, time and thoughts for the development and progress of the company where she worked, and naturally would when she was aged and no longer productive and the company is still considering his services in the form of pension provision. But not all companies provide retirement and only gave the company very little.
In Indonesia the number of companies that make up the pension fund is still very little. Of the approximately 47,000 companies with more than 25 workers and produced 1 million per month salary, only 700 are formed company pension funds. Though the government has already set two models of pension funds to encourage companies to establish retirement programs. Namely Financial Institutions Pension Fund (Pension Fund) and the Employer Retirement Fund (DPKK)
Excellence funds managed by the Pension Fund compared to the savings in the bank are:
1. Tax savings for the participant fees. Participant contributions up to a certain amount can be charged as an expense that will reduce the amount of taxable income. (Article 6 paragraph (1) letter c Act No.10 of 1994 on income taxes, and Article 4 paragraph (3) letter g, Act No.10 of 1994)
2. The principle of tax savings on investment results. The results of pension fund investments in certain investment facility income tax postponement. (Decree of the Minister of Finance No.651/KMK.04/1994, which is a further description of the article 4 paragraph (3) letter g, Act No.10 of 1994)
3. The principle of security of funds from all kinds of confiscated (creditor proof). Article 20 of Law No.11/1992 paragraph 1-2 as follows:
rights to any pension benefits can be paid by the Pension Fund can not be used as collateral for a loan and can not be transferred or seized;
All transactions that resulted in the transfer, loading, binding, pension benefit payments prior to maturity or guarantee retirement benefits from the Pension Fund declared null on the basis of this law.
Financial Institutions Pension Fund Shariah has three advantages in addition to the above of course has other advantages of managed funds with the concept of Sharia and the participants can set their own investment objectives contributions.
So far only one of Shariah Pension Fund Financial Institutions Pension Fund or Pension Fund Muamalat Muamalat.
5. BMT (COOP Sharia)
Financial institutions in Indonesia Baitut Tamwil or Baitu Maal wat Tamwil (BMT) began to be known since the 1980s, namely with the establishment Baitut Tamwil Teknosa in Bandung and BT Ariyo Gusti in Jakarta. Unfortunately these two institutions can not survive long.
BMT is developing right now is BMT, which is located as legally cooperatives operating like banks (BS or BPRS) and the Group of Savings and Loans (KSP) or self-reliance groups (SHGs)
Through role began in 1995 PINBUK BMT growth achieved satisfactory results, which spread almost all over the country numbering tens of thousands of BMT.
Besides the financial institutions mentioned above of course there's more financial institutions that need to be developed so that its role can be felt by the whole society. Financial institutions are likely to be developed is the Institute of Professional Amil Zakat, Ijara (Leasing in Islam), Islamic Pawnshop, and others.
IV. DEVELOPMENT CONSTRAINTS IFI
In this brief paper will be presented several obstacles faced by Sharia banking in Indonesia so that banks can play a role of Sharia not optimal for the financial world and society. Constraints exist in nature external and internal.
External constraints and internal are:
1. Law
Before the year 1998 Shariah banking walk back without a solid legal and regulatory banking operations in accordance with the Shariah and other devices. This situation causes the Shariah Banking trying to adjust its products with the laws and regulations. As a result the special features of Islamic products can not be displayed. Another consequence is that products can not fully accepted by society.
2. Liquidity
Bank Indonesia does not provide zero-interest liquidity facility for banks of Sharia, this is because the BI running No.13/1968 Central Bank Act which states that income is the interest of Bank Indonesia.
3. Earning Assets
BI standard used to measure the collectibility of the Shariah and conventional banking is the same, whereas in the Sharia banking is possible to get zero income. For example, if the business is financed by mudaraba Shariah bank returns zero, this occurs in different views. Shariah banking for this phenomenon as something normal "nature of the business cycle" which resulted in a decline in income, while the central bank will measure the size of conventional bank financing, and put into collectibility.
4. Accounting
Accounting system of banking in Indonesia refers to the provisions of Accounting Standard and Indonesian Banking (SKAPI) with no special provisions of Sharia banking in it. This will make an assessment of the accounting in Sharia banking is not appropriate, because the assumptions used in the conventional banking SKAPI.
5. Taxation
Sharia banking has a product bai '(sale and purchase), in this case the difficulty of Sharia Banking taxation. Product bai 'should be treated as a sale and purchase of real, not the financing, so the tax will be double (double taxation), the tax sale when the transaction and income taxes at the end of the year.
6. Standard Fatwa
The absence of uniformity in the fatwa of some Sharia banking products, although there has been the National Shariah Council, but each of Sharia Supervisory Board at each institution may issue a fatwa itself has a distinct possibility with the others. This sort of thing will be confusing and difficult for the implementing the Ummah in the field.
7. Sharia Bank Network
Sharia Bank network is still very limited, the limitations of these networks is very influential on the ability of Sharia banking services to the community who aspire bank products Sharia.
8. Insani Resources
Still very limited human resources with knowledge and technical skills principles, so that will affect the quality of service.
9. Public perception
In general, society has a limited understanding of the Sharia banking operations; these limitations have led some people the wrong perceptions about Sharia banking operations.
V. IFI DEVELOPMENT STRATEGY
In order to increase the competence and competitiveness of financial institutions of Islam with other financial institutions need to be formulated and taken the strategic steps for the development of Islamic financial institutions. Strategies that will be run must be comprehensively by analyzing the constraints faced, as well as the advantages he had.
Concrete steps for the development of financial institutions has been done by the Government of Indonesia which was pioneered by Bank Indonesia. Law No.10 of 1998 on Banking has been validated and the Act expressly stated by the wider opportunities for the development of Sharia banking. The articles in this Act was followed by Bank Indonesia Regulation governing the bank's operational activities of Sharia.
Bank regulations are issued Decree Bank of Banks Based on Sharia principles, the decree is intended to encourage the expansion of Sharia banking network. SK BI about Giro Wajib Minimum, SK BI of the Inter bank Money Market Sharia, SK wadiah Bank of Bank Indonesia Certificates, SK-decree is intended to overcome the problem of liquidity and monetary instruments in accordance with Sharia principles. Other rules are the rules relating to the central bank task, the provision of accounting and auditing standards, arbitration mu'amalah, standardization fatwa and others.
Law No.10, also has given birth Sharia bank - a bank or branch of a new Shariah Shariah. The existence of new banks has a positive contribution to the development of Sharia Banking. Banks are necessary to expand the reach of services to the community. Socialization of Shariah banking will also become more frequent and widespread. Previously this task is only performed by the Bank Artha Graha of Indonesia as a single player, is now done by colleagues - another colleague. With the growth of Sharia banking is possible for the establishment of cooperation between banks of Sharia. This cooperation is needed among others in terms of inter-bank placement funds needed to overcome liquidity problems. This growth also has significance to increase competition, so that each will try to improve the quality of service and encourage variety of banking products and services of Sharia. Which in turn can contribute to increased efficiency for the operation of Sharia banking.
SDI shortage problems in the banking Sharia in varying degrees are still very limited due to the institution of Sharia banking and training, both inside and outside the country. Short-term urgent needs may be done by trained SDI banks in Sharia banking operations training, workshops, seminars and others. Shariah banking SDI development in the long run not only on the activities of training or technical training and short-term needs, but also directed to research activities and long-term education. With the establishment of Sharia bank - a new Sharia bank, means the demand for graduates who have this background will be a lot, and the demand for formal education in the field of Islamic economy will be a lot. Management education institutions are also required in order to respond to these needs.
VI. SECURITY BANK OF SHARIA
In the conventional monetary system does not happen linkages between the monetary sector and real sector. The monetary sector has grown rapidly in such a way melanglangbuana across the ocean, while the real sector lagged behind. Money is no longer just be simply as a medium of exchange, but has become a commodity item, because of the speculation motive of rich people. Based on the report written by Maurice Allais, 1988 Nobel laureate in economics, from as much as U.S. $ 420M in the world money supply per day, only U.S. $ 12.4M which is used only for transaction purposes and the remainder is for speculation and gambling.
Shariah banking must happen balance between the monetary sector and real sector. Monetary sector should not be walking alone leave the real sector. Attachment to the akad-akad Sharia is absolute, then the asset side will not change the margins (even rate changes) because the price agreed upon at the beginning. While the financial covenant as mudaraba, income (profit sharing) banks will be strongly influenced by the state of the real sector, not the monetary sector.
Sharia banking revenue base rather than interest, so banks do not have a negative Sharia spreads as experienced by conventional banks. New monetary crisis which we experienced can be used as evidence that the bank's Sharia (BMI) with all its faults still can survive.
VII. FROM TO Murabaha Musharaka, OPTIMALISASI EFFORTS TO PROMOTE THE REAL SECTOR
Murabaha portfolio was dominated Islamic banks. Although not to blame in fiqh and banking policy orientation, this policy option contains a number of risks: from deviations in practice that threatens the legitimacy of the Islamic operations, to the difficulty of creating a balance between the financial sector and real sector. The latter - the balance of the monetary sector and riel - is one of the pillars that will ensure a healthy economic growth.
This paper offers a pattern that occurs balance between monetary and real sector through Musharaka applications. This requires some preconditions. Islamic banking portfolio balance proportionately between the financial sector and the riel will ensure growth of movement and the Islamic economic system that coveted of all parties.
It has become a common phenomenon, both at the world, and in Indonesia, that the development of Islamic economics movement occurs unbalance trend in the activities or the financial sector and monoter riel [Adnan, 2003; see also Tohirin, 2003, Karim 2002]. It can be seen from several things, for example, first: that the development of Islamic economics movement is more marked by the establishment of many financial institutions, whether it is banking, and financial institutions of non-bank (if the conventional approach used perspective) such as takaful, capital market, mutual funds , Islamic bonds to mortgage sharia. Second, in accordance with the 'fitrah'nya, these financial institutions are just a lot of deals with the monetary sector, and not too mean to build and develop economic activities in the real sector.
Experience has proved, that the emphasis is too far to the financial sector and ignore the real sector could result in economic paralysis itself. What happened to this nation since a few years ago and culminated with the emergence of the monetary crisis since mid 1997 is a very valuable lesson from the negligence of all parties to consider the importance of balance between the real sector and monetary policy. However, once again, the author is concerned that many people have forgotten the important lesson that, so far, not much sound effort that leads to balance these two economic sectors that support each other, including in the context of Islamic economics movement.
Data indicated by Mujiyanto [2004, 14-5] in reportasenya in Capital magazine, clearly indicates this. For the year 2003 for example, the product portfolio Musharaka financing or financing is 2.86%, and Mudharabah of 14:33%. On the other hand dominate Murabaha financing products to 71.21%. The data presented are Mujiyanto average condition of the portfolio reflects a national Islamic banking products as a whole, and not happen in one of two cases existing Islamic banks. That is, data that directly describe the general tendency of sharia perbakan operating patterns in this country.
It's no coincidence it was, when the Governor of Bank Indonesia Burhanuddin Abdullah expressed the same concerns on that occasion delivered his keynote speech in the meeting of the Convention and the Declaration of the Association of Indonesian Islamic Economist in Jakarta, March 3, 2004 ago in Jakarta.
Data (for the position of November 2004) are reported in Sharia Banking Development Report 2004 released by Bank Indonesia [2004, 14] also confirm the information above, when the new Musharaka reached 10.9%, 17.4% Mudaharabah, while still dominating the Murabaha at position 66.3%.
Depart from this phenomenon, according to the writer to think about a way out so that the movement of Islamic economics does not repeat such mistakes in the national economic system some time ago, which lead to bubble growth, and ultimately disastrous monetary crisis and the emergence of developing into yet multidimenasi also be terminated until now. When it comes to repetition errors in the Islamic economic system is now being promoted, it would appear accusation or question, what difference does it make the Islamic economic system with other systems [conventional] is not able to bring changes in the welfare of society?
VIII. Murabaha AND problem
As already mentioned above, that the reality show Murabaha products already dominate the Islamic banking portfolio, either in the form of Commercial Banks, Rural Bank Syariah (BPRS) and even to the extent of the Baitul Mal wat Tamwil (BMT). Is there something wrong on this Murabaha choices?
The answer of course depends from the point where this issue should be considered. When viewed through the lens of fiqh, there is certainly no rules. Fiqh [in a normative sense], do not ever manage a product portfolio of Islamic financial institutions such as banks. There is no lawful or unlawful proportion in the portfolio setting product or service Islamic banking. Therefore, is legitimate and should be if an Islamic bank prefers to sell products that Murabaha financing. In other languages, it is more of a business policy of the Islamic financial institutions, and depending on the course to the interests of what was behind that policy.
When you then use the institution's point of view the interests of the bank itself, just the choice of Murabaha or Musharaka than mudaraba is the most attractive option, profitable and relatively small risk. Why? There are a number of reasons. First, the Murabaha is probably a simple product with the pattern of banking diekivalenkan [read: credit] conventional. Consequently, this product is easy to understand by the bank and the community as well. Hence also, the products are easily socialized. Second, because of its easy to understand, it is also easy to do calculations, so the Murabaha product is relatively easy to sell, and both contain a small risk in the eyes of the bank. Therefore, it is natural to prefer Islamic banking portfolio and raised in the form of Murabaha product. However, normative view of fiqh and sharia banking purposes only, certainly not enough to assess this Murabaha problem. There are a number of other issues of note in murabah practices, for example:
First, the Murabaha practice has the potential to easily misused. Often heard complaints that the products sold murabaha, Islamic banks act as selling conventional loans. By definition, Murabaha "is the sale price of goods at home with an agreed additional benefits." [Antonio, 2000, 145]. A consequence of Murabaha is banks should make a purchase and then sell back to the agreed margin. But often heard the story, especially from the customers, that [person] to sell Islamic banking is almost no different from the 'selling' conventional loans, for example by providing direct equivalence margin, and did not want to know what products to buy customers, not even view this property that will sell it. Worse again, not uncommon to hear, the term 'interest' still appears as the equivalent term 'margin', but they differ in Islamic glasses [see, eg, Sura Al-Baqarah (2): 275]. For the layman, both pragmatic and idealistic, it certainly raises a big question, and led to accusations that the Islamic banks do only a jacket or change the terms, without changing the substance of its operations in accordance with shari'a procedure itself. In turn, may appear to lose faith in Islamic banks in particular and the Islamic economic system, in general. Questions and accusations emerged stronger, when a set amount of margin sharia banks, was the same or even higher than conventional bank interest. Thus, be very difficult to explain the Islamic bank's shari'a, in the eyes of a certain part of society.
Second, macro, more choice on Murabaha product sales by far Islamic banking makes monetary sense to be more prominent in the activities of Islamic economics movement itself compared to the real sector [however this may not be so absolute], as well as money in the bank credit or conventional financial institutions. Moreover, most of the property being sold in a way far more murabaha that is consumptive rather than productive, such as motorcycles, four-wheel vehicles, houses and the like. In fact, hard to deny how necessary balance between the real sector and monetary policies, so that harmony and economic way to grow a healthy [see Adnan 2003; Tohirin 2003]. Based on the conditions in ataslah then let the swelling portion of Murabaha in Islamic banking portfolio contains the danger that threatens the national economy, and even threaten the success of the movement itself Islamic economics.
IX. Mudaraba OR Musharaka?
Indeed mudaraba and musharaka products are two Islamic banking products are potentially very large in creating the balance of the monetary sector and sharia. Why? Since both these products actually involve two parties who are moving to manage the business sector who do not doubt to give added value to the direct economic movement.
Mudaraba, for example, by definition is a collaboration between two or more parties, which require only one party provides the capital, so-called concerned shohibul Maal, and others simply provide expertise (mudarib). In case of profit, then both sides will share profits according to the agreed proportion of the initial contract or aqad between the two sides, and when the normal losses, the financial losses will be borne by shohibul Maal, while the other losses that are non - non-financial or material will be borne by the mudarib. Conversely, when losses occur due to deliberate negligence mudarib party, then the losses become the responsibility of the relevant completely [see Antonio, 2002; Vogel and Hayes, 1998].
On the other hand, Musharaka can be understood as the cooperation of two or more parties. Each party contributes capital, both financial and expertise. Unlike the mudaharabah, then in terms of Musharaka, either profit or loss [normal] to be enjoyed and borne proportionately between the two parties involved in these shirkah [Antonio, 2002; Vogel and Hayes, 1998].
Two terms on both mudaraba and musharaka show clearly that they can be ascertained is an ideal collaboration involving two economic sectors as well and is very encouraging for developing the real sector. However, as already alluded to in advance and is evident in Table 1, Islamic banking portfolio for both these products is relatively much smaller than the Murabaha, for instance.
There is another irony that a place in the context of socialization during this Islamic banking. Not infrequently, the introduction of Islamic banking activities, and in many Islamic economic discourse, mudaraba position in front of the explanations and examples. Even as if mudaraba a flagship product that will be sold first. However, in reality, the opposite happened. The data above clearly shows the gap between Mudaraba in theory and practice. Is there something wrong with the mudaraba?
Mudaraba is an ideal product. Although not originally developed recognized by Islam itself - because it was known before Islam by Muhammad disyiarkan - mudaraba it was epitomized by Muhammad before he was appointed as the Prophet. As is known, Muhammad mudaraba activities with a rich widow, who later became his wife, namely Siti Khadijah. However, relying on the definition of the following mudaraba provided examples of the Prophet Muhammad, mudaraba basically ideal with some preconditions, like having an honest attitude of the parties involved, the preservation of a good bookkeeping system, accountable, and the attitude of trust, especially from the mudarib.
Riel conditions in Indonesia, despite mudaraba recognized an average 14.33% of total financing committed Islamic banking, it should be understood that mudaraba performed the procedures are very debatable. For example, that almost no funding that does not involve mudaraba capital contribution mudarib parties. This is clearly not in accordance with the basic rules mudaraba itself, because - as stated above - that the treaty mudaraba seseungguhnya the financial capital becomes the responsibility of owners of capital or shohibul maal. Instead, it only mudarib responsible enough on the skills and operational. Therefore, the current mudaraba done more of a quasi mudaraba, pseudo mudaraba, or at least that has changed mudaraba (modified mudaraba). Besides not in accordance with the standard definition mudaraba, this practice has a few more risks, for example:
First, susceptible or vulnerable to distortion, because often the mudarib not equipped with adequate akuntanbilitas with auditable financial statements. This issue is not easy to overcome, because it related to bad accounting culture in many companies in this country.
Second, on the other hand, mudaraba demanding requirements of honesty and openness, especially in the context of mudaraba there is a sense that the parties seemed shohibul Maal will not have the slightest right to intervene in business projects being carried out by the mudarib.
Third, the result of the two cases above, banks often set a ratio for the results that may be relatively large for the banks, and vice versa for smaller customers. When the ratio of these results diekivalenkan with bank interest rates, will feel that the portion to be paid the customer becomes more expensive than conventional bank interest.
Based on the above conditions, the author considers that, indeed, quite a lot of problems to overcome mudaraba. And because of that, for writers, consider Musharaka as a solution to be quite attractive, compared mudaraba.
X. Musharaka and the problem
Above, already alluded to the notion Musharaka. There are similarities musharaka and mudaraba, but there is also a pretty fundamental difference. Among musharaka and mudaraba equation is the first, both involving the bank and the customer in a business project in partnership riels or partnertship. So different from the murabaha merely made between banks and customers as a party and the seller only, so not much different from [the extent] the behavior of conventional banks. Second, both these products tend to strengthen the real sector, and not merely push the monetary sector. Furthermore, for example, both mudaraba and musharaka - for direct contact with the real sector - in turn will be able to bring economic activity in the form of new jobs opening, which led to the birth of purchasing power in society so that the economy rolling in a more healthy and equitable.
However, there is a difference between mudaraba and musharaka, for example in the case:
First: the burden of contributions. If the mudaraba, then there is a clear dividing line between shohibul Maal [the only capital contribution fully] and mudarib [which provides full skills] is in musharaka bersyerikat both parties in a more balanced, meaning that both parties are equally to contribute capital and expertise.
Second, the pattern of operations. There is very strong impression, that the project operations mudaraba, mudarib parties have full authority, as if the shohibul Maal intervention had no rights whatsoever, except wait for final results to be reported. Conversely, in musharaka both sides have a more natural right of intervention and even surgery monitoring. Indirectly, this pattern can reduce one major problem faced by mudaraba, ie, moral hazard made by mudarib against shohibul maal. Another advantage is that both partners are able to supervise, and provide skills limited the ability of each party.
Third, the pattern of results. If the mudaraba happened profit, then the situation is no different from musharaka, except perhaps the amount originally agreed upon ratio. This means that profits will be divided in accordance with the agreement or covenant which has disepakti at the beginning of the project. However, when a loss occurs the project, if this is a normal loss, then the party that will shohibul Maal financially bear the full, while the non-financial losses become the responsibility mudarib. This is totally different from the fully implemented musharaka pattern for results or for profit and or loss (profit and loss sharing). This means that both profits and losses will be distributed proportionally between the two parties. This gives the feeling is more fair for all parties involved.
When compared with mudaraba practice, particularly in the bank's position as the party mudarib, there is still a "deviation" which is still debatable. As commonly known, that so far what Islamic banking in its position as mudarib is revenue sharing, and not profit sharing. In such cases, the values of justice upheld by the Islamic economy can be a problem, because there are always those who "relatively certain" benefit, and there are those who "may" or may be harmed. However, it still seems to be generally accepted, with tactical considerations and the age of Islamic banking is still very young.
XI. EMPIRICAL EXPERIENCE VENTURE CAPITAL
If you want glass, there are important lessons to be drawn from the experience of venture capital. Venture capital is essentially no different substantively than the Musharaka. Experience in many places and many countries, including developed countries, to prove how big and important role contributed by the type of business is venture capital on business development with a more equitable basis, compared to conventional banking practices.
It is well known, how a number of world-class companies like Microsoft and Macintosh computers started his business with capital cooperation with Venture Capital firms. In the western world in general, high enough recognition of the role and contribution of Venture Capital firms as business partners in the capital. It turned out that the businesses assisted, such as Microsoft and Macintosh skyrocketed into world-class giant companies, and the efforts of Venture Capital can still survive in their positions as the company's equity partners.
As disclosed in advance, that in fact there is no difference in substance between the practice of venture capital and Musharaka. Therefore, the question would have been a lesson for the world and Islamic banking, why it does not become insipirasi, so one of the weaknesses in the Islamic banking "potofolio products" as well as the low role of sharia banks in the real sector growth can be overcome. On the other hand, increase the portion of musharaka can also provide the potential benefits far greater for Islamic banks
XII. ALTERNATIVE SOLUTION
If nonexistent a significant breakthrough, then with the current condition occurs, it is difficult to expect any significant change in the Islamic banking portfolio. In the long run, the performance of Islamic banks would not be much different from what is now happening, and it is not impossible, in turn, will mengulangui Islamic banking banking failures.
In a small chance discussion between the author and an Islamic banker, one of the problems uncovered "big" complained when I have to enlarge that portion of the portfolio Musharaka. The banker says how Islamic banks will fuss when the Musharaka, the bank must also contribute to staff skills. Is not this a dilemma also for Islamic banks.
Further Narrated by bankers such that, when a musharaka aqad agreed, and the bank must "plant" people in the project, to - say - a period of three years, then for three years, banks have to give up her lack of expertise. Then, how about the one-year bank serving 100 or more aqad Musharaka?
Complaints the banker would be understandable, and understood as one of the major constraints in increasing portfolio Musharaka. However, according to the opinion of the writer, behind this issue, it was born a great opportunity and promise.
Grounded - for example - to plan and commitment to expand Islamic banking portfolio musharaka, in response to the major problems revealed at the beginning of this paper, it could set up a service company service provider expertise. In this regard, Islamic banks can participate collectively own shares, or individual. This new company, most likely founded, because of the following considerations:
First, the availability of many experts with different experiences in various industry sectors. As a result of the monetary crisis whaling that evolved into a multi-dimensional crisis, has tens or perhaps hundreds of thousands of people who have to deal with termination of employment (FLE). Massive layoffs are not have seen that they do not have the managerial competence. Those who suffer are the potential displacement of managerial power can be utilized for the sake of market expansion Musharaka. Banks that do akad musharaka no longer need to assign their own employees to participate in the project management musharaka, but profersional recruit enough that can be rented or hired from a professional services firm to be established this.
Second, the establishment of professional services companies, requires no investment is too large and complex management. This company's task is to collect the professionals who need jobs and distributing them to various Musharaka financing projects that will or are carried out by Islamic banks. Burden arising from this rekruting can be used as part of the project cost or Musharaka financing.
Many benefits can be expected from the establishment of such companies, among others, namely:
First, opening job opportunities for professionals who had not yet managed to get a job, either because they are experiencing layoffs, as well as a new graduate from education.
Second, Islamic banks opportunities to enlarge portions of Musharaka products. If all this time there may be concerns that banks will run out of stock due to internal manpower to serve in the Musharaka projects with customers, then it does not need to happen, because it can be contracted by the outsourcing of professional managers in accordance with its expertise and background experience respectively. Professionals that will work on the project on behalf of the Musharaka financing Islamic banks, during the project.
Third, banks can make savings or avoid the emergence of the burden of fixed (fixed cost) if the banks do experts oursourcing contract system. Banks do not need an expensive rekruting costs and costs of supervision as well as possible the burden remains a long-term options. Once the contract is terminated Musharaka, Islamic banking experts simply return it to the parent company again.
Fourth, the most important benefit is that the growing Musharaka products and is expected to provide a multiplier effect in a more macro. For example: customer - with Musharaka financing can be enlarged scale of its business, expands opportunity to increase the customer's business profits resulting in at least two things, namely getting the company sejahteranya stakeholders, and the growing amount of zakat funds generated by the additional income. In addition, the enlargement also attempt to create new jobs, or reduce the unemployment rate. Reduced unemployment will result in more sejahteranya society in the broadest sense: economic and financial sense of the emergence of safer or reduced crime rates.
Fifth, with growing Musharaka products that in fact is closely related to the real sector, then in addition to economic value-added occurs in the activities of everyday society, then there is also the balance of the financial sector and real sector, which in turn makes the economy move into a more solid and more healthy.
XIII. IKHTITAM
God is fair by creating all kinds of creatures in pairs: day - night, small - large, high - low, profit - loss, men - women, old - young and so on. The changes that occurred between the two couples that make nature a dynamic move from time to time. Movement would be nice if there was a dynamic balance between the two pairs of living creatures, and both will be a dynamic movement very uncomfortable when the two pairs being experienced tremendous inequality.
Learn from it in ataslah, it is necessary to balance such mencintakan between the financial sector (finance) and the real sector. Monoter crisis and the emergence of economic crises since 1997, among others, is because of an imbalance of development and economic development at that time and before. Difficult to deny that there is development of the finance sector and at the same extraordinary distance behind the real sector. Among the consequences is the occurrence of the crisis. Not easy to deny that the financial sector development is also remarkable is triggered by the system of capitalism that swept the world in general and Indonesia in particular. Learning from that case, all parties should learn to not get stuck in the same hole twice.
What this paper offers, in part an attempt to take advantage of important lessons that imbalance. Whether coincidence or not, while symptoms shown by the movement of Islamic economics are driven by Islamic banks showed the same symptoms, when the portion murabaha dominate Islamic banking portfolio. Hopefully this simple idea can be a bidder for the economic problems that can happen again, to see the trend so far.
I. INTRODUCTION
Islamic law is basically a standard concept, but the trip did not rule do Ijtihad - Ijtihad in the field are not allowed during a frame out of the Islamic Sharia. Thus Islam was really able to answer all the times. Similarly, the Islamic economic system which is an inseparable part of the Islamic system, was also not spared from the activities of ijtihad. Thus the Islamic economic system is expected to be able to answer and resolve the economic problems faced by humanity, with no out and violating provisions of the law of Allah SWT. This system has the inherent supervision every individual economic actors rooted in faith and faith in Allah SWT. This system also harmonize between individuals with kemashlahatan crowd kemashlahatan.
The concept of Islamic justice in the economy (especially in the distribution of income) requires all elements of production factors earn a reward in accordance with their respective contributions. Factors of capital, labor, material assets, and entrepreneurship, should be fairly. In the Islamic view of capital (money) by itself does not have much meaning, the new capital if there are significant other factors such as labor. Money by itself will not produce anything, but if you want to make the money should be invested in the real sector.
Islam as a religion is a system that provides guidance for mankind to run this life well and correctly. Whether in relation to the things that regulate human relationships with God (worship), and that the set of human relationships with other human beings (mu'amalah). Worship is needed in order to maintain harmony ketaataan and the relationship between human beings and Khaliq, and to continually remind the human task as caliph on earth. Provisions muamalah be reduced to rules of the game in human existence as social beings.
As Muslims we are commanded to assume good faith for the Islamic system. We must believe that Islam (including the economic system) will be able to resolve the various problems faced by humans. This belief must continue to be cultivated and nourished, especially in the Islamic Ummah. With the way open and display the theoretical order to the practical order. If usury is forbidden by any mode, of course, be no way out that can replace his position. If financial institutions are still practicing usury, of course, must be provided a financial institution far from usury. When God forbid something, the real God who justifies the others whose numbers far more and better for his people.
II. ISLAMIC FINANCIAL INSTITUTIONS
Islamic Financial Institutions or the more popular is called Financial Institution Shariah is a financial institution operating principle is based on the principles of Islamic Shari'a. In the operations of Islamic financial institutions must avoid usury, gharar and maisir.
The main objective of establishing Islamic financial institutions is to fulfill God's command in the economic field and muamalah and liberate the Islamic community of the activities prohibited by Islam. To carry out this task and solve problems that traps Muslims today, is not only a task a person or an institution, but it is a duty and the duty of every Muslim. Applying the principles of Islam in society berekonomi and very necessary to treat the disease in the social and economic world faced by the community.
The Mit Ghamr Bank Egypt is a modern Islamic financial institution first established in 1963. The development and progress Mit Ghamr revive the Muslim economists and scientists, was the Islamic system can bring progress. But at the same time it invites the success of jealousy and envy the people who do not like the system of Islam, and eventually closed Mit Ghamr. Mit Ghamr birth was followed by the establishment of Islamic banks in various countries, both in Islamic countries (mostly Islamic) countries, including Indonesia and the non-Muslims.
Rationale for the development of Islamic financial institutions in Indonesia is to provide services to some of the people of Indonesia can not be served by financial institutions that already exist in Indonesia, because the banks operate the system of interest. Some people are predominantly Muslim Indonesia, believes that the activities of financial institutions is a practice incompatible with the interest of Sharia Islamic principles, so that their participation in the financial sector is not optimal. With the development of financial institutions being run by the principles of Sharia are expected throughout the economic potential of Indonesian society that has not been optimized could be optimized.
Issuance of Law No.7 of 1992 on Banking, opening opportunities of financial institutions that operated based on Shariah principles. Capitalize opportunities given these laws, had standing financial institutions of Sharia, which is a commercial bank (Bank Muamalat Indonesia), 52 rural banks (BPRS), 1300 Baitul Maal Wattamwil (BMT), a Sharia Mutual Funds (PT. Danareksa) and an Emerging Markets (BNI-Faisal Islamic Finance). Although quantitatively the volume of business these institutions are still very small compared to the total volume of business of financial institutions nationwide, but the repercussions have been heard almost evenly among Muslims in Indonesia today.
Then the government improve the Act No.7 / 1992 by issuing Law No. 10 in 1998. Law No.10 provides opportunities for the widest possible establishment of Islamic financial institutions. Even in this Law Islamic Financial Institutions and status positions that aligned with its partners who have been there first.
III. FORM OF ISLAMIC FINANCIAL INSTITUTIONS IN INDONESIA
1. BANK ISLAM
Banking as claimed by Alvin Toffler in his book "Third Wave" is the most important institution in the modern financial system. Therefore it can also be said to include usury in the banking system means accepting usury in the financial system and the theories which includes in that field. Banking also has a very strategic position in encouraging business activity and economic growth. Therefore the government must continue to strive to optimize the economic potential of communities, especially Muslims through Islamic banking.
Seeing the huge potential of Indonesian society and still crave banking without interest, the Bank Indonesia's government continues to encourage the development of Shariah banks through improving the provision of banking and dissemination efforts of Sharia Banking System.
To avoid the operation of the bank with interest rate system, Islam introduced mu'amalah principles of Islamic banking as an alternative to the business activities as follows:
A. Gathering Activities Fund
Giro (wadiah)
Savings (Mudharabah)
Savings Deposits (Mudharabah)
B. Disbursement
Sale and Purchase (Al-Buyu ')
* Murabaha
* Greetings
* Istishna '
* Ijarah Muntahiyyah Bittamlik
Partnership (Profit Sharing)
* Musharaka
* Mudaraba
* Mudaraba Muqayyadah
Service (Ujrah) - Fee Based
* Qard
* Rahn
* Hawalah
* Wakalah
* Kafalah
2. ISLAMIC INSURANCE
Basically the concept of insurance is acceptable in Islam as long as not violating the principles and rules which are prohibited by the Shariah. And scholars argued that the insurance is running now contains the ways that are not in accordance with Shariah. Therefore, alternatives need to be made.
Fiqh Academy - Organization of Islamic Countries in the meeting in Jeddah on 22-28 December 1985 concluded about insurance:
The commercial insurance contract, with a fixed periodical premium, which is commonly used by commercial insurance companies is a contract which contains major elements of risks, which voids the contract and therefore is prohibited (haram) according to the Shari'ah.
The alternatives contract which conforms to the principles of Islamic dealings is the contract of cooperative insurance, which is founded on the basis of charity and cooperation, Similarly in the case of reinsurance based on the principles of cooperative insurance.
Malaysian National Fatwa Committee in his fatwa dated June 15, 1972 said:
Life insurance offered by insurance companies today is a business transaction that is not kosher, because contrary to the principles of Islamic business. The deal still contains gharar (uncertainty), maisir (gambling) and riba (interest).
Islam is a insurance means insurance undertaken based on the principle of takaful, a cooperation scheme based on ukhuwah values, solidarity, mutual assistance to provide financial assistance to the takaful participants if needed and they agreed to contribute to the achievement of these goals. Therefore it can be concluded that the basic concept of takaful is: mutual responsibility, cooperation and help each other and protect each other.
Takaful fund management mechanism:
Each participant must pay a regular premium to the manager (insurance companies)
Participants can pay the premium every month, quarter, semester, or yearly according to the agreement.
Great premium depends on the ability of participants, but the manager (insurance companies) can determine the minimum amount.
Payment methods can be done directly or indirectly.
Any premium paid by the participants split into two accounts:
1. Savings Account. These savings in the form of savings mudaraba, as Shahibul Maal participants and organizers as mudarib. Savings and the results will be returned to the participant if the agreement expires, the participant resigns or dies participants.
2. Tabarru account, which is a collection of funds intended by each participant as a good contribution for the purposes of mutual help and mutual support if one of the unfortunate participants. If the agreement had expired and there are surplus funds can be distributed to participants.
Takaful can also run the premium is wholly tabarru (no savings element), but in doing this type should be run with very open and with a good understanding. Participants and organizers should have a high commitment. In practice not to happen maisir and other fraudulent behavior.
3. MUTUAL FUNDS Sharia
According to Indonesian legal sense in mutual funds is the container used to collect funds from public investors to invest further in the portfolio securities by the investment manager.
Delivery of the funds committed by investors need assurance that the fund managers do not act improperly. Therefore, it needs to be an institution that guards the treasure in the form of securities. Custodian is the agency which is a bank, so-called Custodian bank.
All investments made by Mutual funds must follow the Shariah restrictions are strictly Syar'i. Shariah mutual fund will not invest into companies that produce the main business, sell, distribute and trade in:
Food and beverage unlawful
Gambling and gaming with gambling
Financial institutions ribawi
Pornography
and other illicit activities.
4. PENSION FUND FINANCIAL INSTITUTIONS
To obtain a full pension after the task is an ideal expectations for every worker. Especially after so many years of devoted effort, time and thoughts for the development and progress of the company where she worked, and naturally would when she was aged and no longer productive and the company is still considering his services in the form of pension provision. But not all companies provide retirement and only gave the company very little.
In Indonesia the number of companies that make up the pension fund is still very little. Of the approximately 47,000 companies with more than 25 workers and produced 1 million per month salary, only 700 are formed company pension funds. Though the government has already set two models of pension funds to encourage companies to establish retirement programs. Namely Financial Institutions Pension Fund (Pension Fund) and the Employer Retirement Fund (DPKK)
Excellence funds managed by the Pension Fund compared to the savings in the bank are:
1. Tax savings for the participant fees. Participant contributions up to a certain amount can be charged as an expense that will reduce the amount of taxable income. (Article 6 paragraph (1) letter c Act No.10 of 1994 on income taxes, and Article 4 paragraph (3) letter g, Act No.10 of 1994)
2. The principle of tax savings on investment results. The results of pension fund investments in certain investment facility income tax postponement. (Decree of the Minister of Finance No.651/KMK.04/1994, which is a further description of the article 4 paragraph (3) letter g, Act No.10 of 1994)
3. The principle of security of funds from all kinds of confiscated (creditor proof). Article 20 of Law No.11/1992 paragraph 1-2 as follows:
rights to any pension benefits can be paid by the Pension Fund can not be used as collateral for a loan and can not be transferred or seized;
All transactions that resulted in the transfer, loading, binding, pension benefit payments prior to maturity or guarantee retirement benefits from the Pension Fund declared null on the basis of this law.
Financial Institutions Pension Fund Shariah has three advantages in addition to the above of course has other advantages of managed funds with the concept of Sharia and the participants can set their own investment objectives contributions.
So far only one of Shariah Pension Fund Financial Institutions Pension Fund or Pension Fund Muamalat Muamalat.
5. BMT (COOP Sharia)
Financial institutions in Indonesia Baitut Tamwil or Baitu Maal wat Tamwil (BMT) began to be known since the 1980s, namely with the establishment Baitut Tamwil Teknosa in Bandung and BT Ariyo Gusti in Jakarta. Unfortunately these two institutions can not survive long.
BMT is developing right now is BMT, which is located as legally cooperatives operating like banks (BS or BPRS) and the Group of Savings and Loans (KSP) or self-reliance groups (SHGs)
Through role began in 1995 PINBUK BMT growth achieved satisfactory results, which spread almost all over the country numbering tens of thousands of BMT.
Besides the financial institutions mentioned above of course there's more financial institutions that need to be developed so that its role can be felt by the whole society. Financial institutions are likely to be developed is the Institute of Professional Amil Zakat, Ijara (Leasing in Islam), Islamic Pawnshop, and others.
IV. DEVELOPMENT CONSTRAINTS IFI
In this brief paper will be presented several obstacles faced by Sharia banking in Indonesia so that banks can play a role of Sharia not optimal for the financial world and society. Constraints exist in nature external and internal.
External constraints and internal are:
1. Law
Before the year 1998 Shariah banking walk back without a solid legal and regulatory banking operations in accordance with the Shariah and other devices. This situation causes the Shariah Banking trying to adjust its products with the laws and regulations. As a result the special features of Islamic products can not be displayed. Another consequence is that products can not fully accepted by society.
2. Liquidity
Bank Indonesia does not provide zero-interest liquidity facility for banks of Sharia, this is because the BI running No.13/1968 Central Bank Act which states that income is the interest of Bank Indonesia.
3. Earning Assets
BI standard used to measure the collectibility of the Shariah and conventional banking is the same, whereas in the Sharia banking is possible to get zero income. For example, if the business is financed by mudaraba Shariah bank returns zero, this occurs in different views. Shariah banking for this phenomenon as something normal "nature of the business cycle" which resulted in a decline in income, while the central bank will measure the size of conventional bank financing, and put into collectibility.
4. Accounting
Accounting system of banking in Indonesia refers to the provisions of Accounting Standard and Indonesian Banking (SKAPI) with no special provisions of Sharia banking in it. This will make an assessment of the accounting in Sharia banking is not appropriate, because the assumptions used in the conventional banking SKAPI.
5. Taxation
Sharia banking has a product bai '(sale and purchase), in this case the difficulty of Sharia Banking taxation. Product bai 'should be treated as a sale and purchase of real, not the financing, so the tax will be double (double taxation), the tax sale when the transaction and income taxes at the end of the year.
6. Standard Fatwa
The absence of uniformity in the fatwa of some Sharia banking products, although there has been the National Shariah Council, but each of Sharia Supervisory Board at each institution may issue a fatwa itself has a distinct possibility with the others. This sort of thing will be confusing and difficult for the implementing the Ummah in the field.
7. Sharia Bank Network
Sharia Bank network is still very limited, the limitations of these networks is very influential on the ability of Sharia banking services to the community who aspire bank products Sharia.
8. Insani Resources
Still very limited human resources with knowledge and technical skills principles, so that will affect the quality of service.
9. Public perception
In general, society has a limited understanding of the Sharia banking operations; these limitations have led some people the wrong perceptions about Sharia banking operations.
V. IFI DEVELOPMENT STRATEGY
In order to increase the competence and competitiveness of financial institutions of Islam with other financial institutions need to be formulated and taken the strategic steps for the development of Islamic financial institutions. Strategies that will be run must be comprehensively by analyzing the constraints faced, as well as the advantages he had.
Concrete steps for the development of financial institutions has been done by the Government of Indonesia which was pioneered by Bank Indonesia. Law No.10 of 1998 on Banking has been validated and the Act expressly stated by the wider opportunities for the development of Sharia banking. The articles in this Act was followed by Bank Indonesia Regulation governing the bank's operational activities of Sharia.
Bank regulations are issued Decree Bank of Banks Based on Sharia principles, the decree is intended to encourage the expansion of Sharia banking network. SK BI about Giro Wajib Minimum, SK BI of the Inter bank Money Market Sharia, SK wadiah Bank of Bank Indonesia Certificates, SK-decree is intended to overcome the problem of liquidity and monetary instruments in accordance with Sharia principles. Other rules are the rules relating to the central bank task, the provision of accounting and auditing standards, arbitration mu'amalah, standardization fatwa and others.
Law No.10, also has given birth Sharia bank - a bank or branch of a new Shariah Shariah. The existence of new banks has a positive contribution to the development of Sharia Banking. Banks are necessary to expand the reach of services to the community. Socialization of Shariah banking will also become more frequent and widespread. Previously this task is only performed by the Bank Artha Graha of Indonesia as a single player, is now done by colleagues - another colleague. With the growth of Sharia banking is possible for the establishment of cooperation between banks of Sharia. This cooperation is needed among others in terms of inter-bank placement funds needed to overcome liquidity problems. This growth also has significance to increase competition, so that each will try to improve the quality of service and encourage variety of banking products and services of Sharia. Which in turn can contribute to increased efficiency for the operation of Sharia banking.
SDI shortage problems in the banking Sharia in varying degrees are still very limited due to the institution of Sharia banking and training, both inside and outside the country. Short-term urgent needs may be done by trained SDI banks in Sharia banking operations training, workshops, seminars and others. Shariah banking SDI development in the long run not only on the activities of training or technical training and short-term needs, but also directed to research activities and long-term education. With the establishment of Sharia bank - a new Sharia bank, means the demand for graduates who have this background will be a lot, and the demand for formal education in the field of Islamic economy will be a lot. Management education institutions are also required in order to respond to these needs.
VI. SECURITY BANK OF SHARIA
In the conventional monetary system does not happen linkages between the monetary sector and real sector. The monetary sector has grown rapidly in such a way melanglangbuana across the ocean, while the real sector lagged behind. Money is no longer just be simply as a medium of exchange, but has become a commodity item, because of the speculation motive of rich people. Based on the report written by Maurice Allais, 1988 Nobel laureate in economics, from as much as U.S. $ 420M in the world money supply per day, only U.S. $ 12.4M which is used only for transaction purposes and the remainder is for speculation and gambling.
Shariah banking must happen balance between the monetary sector and real sector. Monetary sector should not be walking alone leave the real sector. Attachment to the akad-akad Sharia is absolute, then the asset side will not change the margins (even rate changes) because the price agreed upon at the beginning. While the financial covenant as mudaraba, income (profit sharing) banks will be strongly influenced by the state of the real sector, not the monetary sector.
Sharia banking revenue base rather than interest, so banks do not have a negative Sharia spreads as experienced by conventional banks. New monetary crisis which we experienced can be used as evidence that the bank's Sharia (BMI) with all its faults still can survive.
VII. FROM TO Murabaha Musharaka, OPTIMALISASI EFFORTS TO PROMOTE THE REAL SECTOR
Murabaha portfolio was dominated Islamic banks. Although not to blame in fiqh and banking policy orientation, this policy option contains a number of risks: from deviations in practice that threatens the legitimacy of the Islamic operations, to the difficulty of creating a balance between the financial sector and real sector. The latter - the balance of the monetary sector and riel - is one of the pillars that will ensure a healthy economic growth.
This paper offers a pattern that occurs balance between monetary and real sector through Musharaka applications. This requires some preconditions. Islamic banking portfolio balance proportionately between the financial sector and the riel will ensure growth of movement and the Islamic economic system that coveted of all parties.
It has become a common phenomenon, both at the world, and in Indonesia, that the development of Islamic economics movement occurs unbalance trend in the activities or the financial sector and monoter riel [Adnan, 2003; see also Tohirin, 2003, Karim 2002]. It can be seen from several things, for example, first: that the development of Islamic economics movement is more marked by the establishment of many financial institutions, whether it is banking, and financial institutions of non-bank (if the conventional approach used perspective) such as takaful, capital market, mutual funds , Islamic bonds to mortgage sharia. Second, in accordance with the 'fitrah'nya, these financial institutions are just a lot of deals with the monetary sector, and not too mean to build and develop economic activities in the real sector.
Experience has proved, that the emphasis is too far to the financial sector and ignore the real sector could result in economic paralysis itself. What happened to this nation since a few years ago and culminated with the emergence of the monetary crisis since mid 1997 is a very valuable lesson from the negligence of all parties to consider the importance of balance between the real sector and monetary policy. However, once again, the author is concerned that many people have forgotten the important lesson that, so far, not much sound effort that leads to balance these two economic sectors that support each other, including in the context of Islamic economics movement.
Data indicated by Mujiyanto [2004, 14-5] in reportasenya in Capital magazine, clearly indicates this. For the year 2003 for example, the product portfolio Musharaka financing or financing is 2.86%, and Mudharabah of 14:33%. On the other hand dominate Murabaha financing products to 71.21%. The data presented are Mujiyanto average condition of the portfolio reflects a national Islamic banking products as a whole, and not happen in one of two cases existing Islamic banks. That is, data that directly describe the general tendency of sharia perbakan operating patterns in this country.
It's no coincidence it was, when the Governor of Bank Indonesia Burhanuddin Abdullah expressed the same concerns on that occasion delivered his keynote speech in the meeting of the Convention and the Declaration of the Association of Indonesian Islamic Economist in Jakarta, March 3, 2004 ago in Jakarta.
Data (for the position of November 2004) are reported in Sharia Banking Development Report 2004 released by Bank Indonesia [2004, 14] also confirm the information above, when the new Musharaka reached 10.9%, 17.4% Mudaharabah, while still dominating the Murabaha at position 66.3%.
Depart from this phenomenon, according to the writer to think about a way out so that the movement of Islamic economics does not repeat such mistakes in the national economic system some time ago, which lead to bubble growth, and ultimately disastrous monetary crisis and the emergence of developing into yet multidimenasi also be terminated until now. When it comes to repetition errors in the Islamic economic system is now being promoted, it would appear accusation or question, what difference does it make the Islamic economic system with other systems [conventional] is not able to bring changes in the welfare of society?
VIII. Murabaha AND problem
As already mentioned above, that the reality show Murabaha products already dominate the Islamic banking portfolio, either in the form of Commercial Banks, Rural Bank Syariah (BPRS) and even to the extent of the Baitul Mal wat Tamwil (BMT). Is there something wrong on this Murabaha choices?
The answer of course depends from the point where this issue should be considered. When viewed through the lens of fiqh, there is certainly no rules. Fiqh [in a normative sense], do not ever manage a product portfolio of Islamic financial institutions such as banks. There is no lawful or unlawful proportion in the portfolio setting product or service Islamic banking. Therefore, is legitimate and should be if an Islamic bank prefers to sell products that Murabaha financing. In other languages, it is more of a business policy of the Islamic financial institutions, and depending on the course to the interests of what was behind that policy.
When you then use the institution's point of view the interests of the bank itself, just the choice of Murabaha or Musharaka than mudaraba is the most attractive option, profitable and relatively small risk. Why? There are a number of reasons. First, the Murabaha is probably a simple product with the pattern of banking diekivalenkan [read: credit] conventional. Consequently, this product is easy to understand by the bank and the community as well. Hence also, the products are easily socialized. Second, because of its easy to understand, it is also easy to do calculations, so the Murabaha product is relatively easy to sell, and both contain a small risk in the eyes of the bank. Therefore, it is natural to prefer Islamic banking portfolio and raised in the form of Murabaha product. However, normative view of fiqh and sharia banking purposes only, certainly not enough to assess this Murabaha problem. There are a number of other issues of note in murabah practices, for example:
First, the Murabaha practice has the potential to easily misused. Often heard complaints that the products sold murabaha, Islamic banks act as selling conventional loans. By definition, Murabaha "is the sale price of goods at home with an agreed additional benefits." [Antonio, 2000, 145]. A consequence of Murabaha is banks should make a purchase and then sell back to the agreed margin. But often heard the story, especially from the customers, that [person] to sell Islamic banking is almost no different from the 'selling' conventional loans, for example by providing direct equivalence margin, and did not want to know what products to buy customers, not even view this property that will sell it. Worse again, not uncommon to hear, the term 'interest' still appears as the equivalent term 'margin', but they differ in Islamic glasses [see, eg, Sura Al-Baqarah (2): 275]. For the layman, both pragmatic and idealistic, it certainly raises a big question, and led to accusations that the Islamic banks do only a jacket or change the terms, without changing the substance of its operations in accordance with shari'a procedure itself. In turn, may appear to lose faith in Islamic banks in particular and the Islamic economic system, in general. Questions and accusations emerged stronger, when a set amount of margin sharia banks, was the same or even higher than conventional bank interest. Thus, be very difficult to explain the Islamic bank's shari'a, in the eyes of a certain part of society.
Second, macro, more choice on Murabaha product sales by far Islamic banking makes monetary sense to be more prominent in the activities of Islamic economics movement itself compared to the real sector [however this may not be so absolute], as well as money in the bank credit or conventional financial institutions. Moreover, most of the property being sold in a way far more murabaha that is consumptive rather than productive, such as motorcycles, four-wheel vehicles, houses and the like. In fact, hard to deny how necessary balance between the real sector and monetary policies, so that harmony and economic way to grow a healthy [see Adnan 2003; Tohirin 2003]. Based on the conditions in ataslah then let the swelling portion of Murabaha in Islamic banking portfolio contains the danger that threatens the national economy, and even threaten the success of the movement itself Islamic economics.
IX. Mudaraba OR Musharaka?
Indeed mudaraba and musharaka products are two Islamic banking products are potentially very large in creating the balance of the monetary sector and sharia. Why? Since both these products actually involve two parties who are moving to manage the business sector who do not doubt to give added value to the direct economic movement.
Mudaraba, for example, by definition is a collaboration between two or more parties, which require only one party provides the capital, so-called concerned shohibul Maal, and others simply provide expertise (mudarib). In case of profit, then both sides will share profits according to the agreed proportion of the initial contract or aqad between the two sides, and when the normal losses, the financial losses will be borne by shohibul Maal, while the other losses that are non - non-financial or material will be borne by the mudarib. Conversely, when losses occur due to deliberate negligence mudarib party, then the losses become the responsibility of the relevant completely [see Antonio, 2002; Vogel and Hayes, 1998].
On the other hand, Musharaka can be understood as the cooperation of two or more parties. Each party contributes capital, both financial and expertise. Unlike the mudaharabah, then in terms of Musharaka, either profit or loss [normal] to be enjoyed and borne proportionately between the two parties involved in these shirkah [Antonio, 2002; Vogel and Hayes, 1998].
Two terms on both mudaraba and musharaka show clearly that they can be ascertained is an ideal collaboration involving two economic sectors as well and is very encouraging for developing the real sector. However, as already alluded to in advance and is evident in Table 1, Islamic banking portfolio for both these products is relatively much smaller than the Murabaha, for instance.
There is another irony that a place in the context of socialization during this Islamic banking. Not infrequently, the introduction of Islamic banking activities, and in many Islamic economic discourse, mudaraba position in front of the explanations and examples. Even as if mudaraba a flagship product that will be sold first. However, in reality, the opposite happened. The data above clearly shows the gap between Mudaraba in theory and practice. Is there something wrong with the mudaraba?
Mudaraba is an ideal product. Although not originally developed recognized by Islam itself - because it was known before Islam by Muhammad disyiarkan - mudaraba it was epitomized by Muhammad before he was appointed as the Prophet. As is known, Muhammad mudaraba activities with a rich widow, who later became his wife, namely Siti Khadijah. However, relying on the definition of the following mudaraba provided examples of the Prophet Muhammad, mudaraba basically ideal with some preconditions, like having an honest attitude of the parties involved, the preservation of a good bookkeeping system, accountable, and the attitude of trust, especially from the mudarib.
Riel conditions in Indonesia, despite mudaraba recognized an average 14.33% of total financing committed Islamic banking, it should be understood that mudaraba performed the procedures are very debatable. For example, that almost no funding that does not involve mudaraba capital contribution mudarib parties. This is clearly not in accordance with the basic rules mudaraba itself, because - as stated above - that the treaty mudaraba seseungguhnya the financial capital becomes the responsibility of owners of capital or shohibul maal. Instead, it only mudarib responsible enough on the skills and operational. Therefore, the current mudaraba done more of a quasi mudaraba, pseudo mudaraba, or at least that has changed mudaraba (modified mudaraba). Besides not in accordance with the standard definition mudaraba, this practice has a few more risks, for example:
First, susceptible or vulnerable to distortion, because often the mudarib not equipped with adequate akuntanbilitas with auditable financial statements. This issue is not easy to overcome, because it related to bad accounting culture in many companies in this country.
Second, on the other hand, mudaraba demanding requirements of honesty and openness, especially in the context of mudaraba there is a sense that the parties seemed shohibul Maal will not have the slightest right to intervene in business projects being carried out by the mudarib.
Third, the result of the two cases above, banks often set a ratio for the results that may be relatively large for the banks, and vice versa for smaller customers. When the ratio of these results diekivalenkan with bank interest rates, will feel that the portion to be paid the customer becomes more expensive than conventional bank interest.
Based on the above conditions, the author considers that, indeed, quite a lot of problems to overcome mudaraba. And because of that, for writers, consider Musharaka as a solution to be quite attractive, compared mudaraba.
X. Musharaka and the problem
Above, already alluded to the notion Musharaka. There are similarities musharaka and mudaraba, but there is also a pretty fundamental difference. Among musharaka and mudaraba equation is the first, both involving the bank and the customer in a business project in partnership riels or partnertship. So different from the murabaha merely made between banks and customers as a party and the seller only, so not much different from [the extent] the behavior of conventional banks. Second, both these products tend to strengthen the real sector, and not merely push the monetary sector. Furthermore, for example, both mudaraba and musharaka - for direct contact with the real sector - in turn will be able to bring economic activity in the form of new jobs opening, which led to the birth of purchasing power in society so that the economy rolling in a more healthy and equitable.
However, there is a difference between mudaraba and musharaka, for example in the case:
First: the burden of contributions. If the mudaraba, then there is a clear dividing line between shohibul Maal [the only capital contribution fully] and mudarib [which provides full skills] is in musharaka bersyerikat both parties in a more balanced, meaning that both parties are equally to contribute capital and expertise.
Second, the pattern of operations. There is very strong impression, that the project operations mudaraba, mudarib parties have full authority, as if the shohibul Maal intervention had no rights whatsoever, except wait for final results to be reported. Conversely, in musharaka both sides have a more natural right of intervention and even surgery monitoring. Indirectly, this pattern can reduce one major problem faced by mudaraba, ie, moral hazard made by mudarib against shohibul maal. Another advantage is that both partners are able to supervise, and provide skills limited the ability of each party.
Third, the pattern of results. If the mudaraba happened profit, then the situation is no different from musharaka, except perhaps the amount originally agreed upon ratio. This means that profits will be divided in accordance with the agreement or covenant which has disepakti at the beginning of the project. However, when a loss occurs the project, if this is a normal loss, then the party that will shohibul Maal financially bear the full, while the non-financial losses become the responsibility mudarib. This is totally different from the fully implemented musharaka pattern for results or for profit and or loss (profit and loss sharing). This means that both profits and losses will be distributed proportionally between the two parties. This gives the feeling is more fair for all parties involved.
When compared with mudaraba practice, particularly in the bank's position as the party mudarib, there is still a "deviation" which is still debatable. As commonly known, that so far what Islamic banking in its position as mudarib is revenue sharing, and not profit sharing. In such cases, the values of justice upheld by the Islamic economy can be a problem, because there are always those who "relatively certain" benefit, and there are those who "may" or may be harmed. However, it still seems to be generally accepted, with tactical considerations and the age of Islamic banking is still very young.
XI. EMPIRICAL EXPERIENCE VENTURE CAPITAL
If you want glass, there are important lessons to be drawn from the experience of venture capital. Venture capital is essentially no different substantively than the Musharaka. Experience in many places and many countries, including developed countries, to prove how big and important role contributed by the type of business is venture capital on business development with a more equitable basis, compared to conventional banking practices.
It is well known, how a number of world-class companies like Microsoft and Macintosh computers started his business with capital cooperation with Venture Capital firms. In the western world in general, high enough recognition of the role and contribution of Venture Capital firms as business partners in the capital. It turned out that the businesses assisted, such as Microsoft and Macintosh skyrocketed into world-class giant companies, and the efforts of Venture Capital can still survive in their positions as the company's equity partners.
As disclosed in advance, that in fact there is no difference in substance between the practice of venture capital and Musharaka. Therefore, the question would have been a lesson for the world and Islamic banking, why it does not become insipirasi, so one of the weaknesses in the Islamic banking "potofolio products" as well as the low role of sharia banks in the real sector growth can be overcome. On the other hand, increase the portion of musharaka can also provide the potential benefits far greater for Islamic banks
XII. ALTERNATIVE SOLUTION
If nonexistent a significant breakthrough, then with the current condition occurs, it is difficult to expect any significant change in the Islamic banking portfolio. In the long run, the performance of Islamic banks would not be much different from what is now happening, and it is not impossible, in turn, will mengulangui Islamic banking banking failures.
In a small chance discussion between the author and an Islamic banker, one of the problems uncovered "big" complained when I have to enlarge that portion of the portfolio Musharaka. The banker says how Islamic banks will fuss when the Musharaka, the bank must also contribute to staff skills. Is not this a dilemma also for Islamic banks.
Further Narrated by bankers such that, when a musharaka aqad agreed, and the bank must "plant" people in the project, to - say - a period of three years, then for three years, banks have to give up her lack of expertise. Then, how about the one-year bank serving 100 or more aqad Musharaka?
Complaints the banker would be understandable, and understood as one of the major constraints in increasing portfolio Musharaka. However, according to the opinion of the writer, behind this issue, it was born a great opportunity and promise.
Grounded - for example - to plan and commitment to expand Islamic banking portfolio musharaka, in response to the major problems revealed at the beginning of this paper, it could set up a service company service provider expertise. In this regard, Islamic banks can participate collectively own shares, or individual. This new company, most likely founded, because of the following considerations:
First, the availability of many experts with different experiences in various industry sectors. As a result of the monetary crisis whaling that evolved into a multi-dimensional crisis, has tens or perhaps hundreds of thousands of people who have to deal with termination of employment (FLE). Massive layoffs are not have seen that they do not have the managerial competence. Those who suffer are the potential displacement of managerial power can be utilized for the sake of market expansion Musharaka. Banks that do akad musharaka no longer need to assign their own employees to participate in the project management musharaka, but profersional recruit enough that can be rented or hired from a professional services firm to be established this.
Second, the establishment of professional services companies, requires no investment is too large and complex management. This company's task is to collect the professionals who need jobs and distributing them to various Musharaka financing projects that will or are carried out by Islamic banks. Burden arising from this rekruting can be used as part of the project cost or Musharaka financing.
Many benefits can be expected from the establishment of such companies, among others, namely:
First, opening job opportunities for professionals who had not yet managed to get a job, either because they are experiencing layoffs, as well as a new graduate from education.
Second, Islamic banks opportunities to enlarge portions of Musharaka products. If all this time there may be concerns that banks will run out of stock due to internal manpower to serve in the Musharaka projects with customers, then it does not need to happen, because it can be contracted by the outsourcing of professional managers in accordance with its expertise and background experience respectively. Professionals that will work on the project on behalf of the Musharaka financing Islamic banks, during the project.
Third, banks can make savings or avoid the emergence of the burden of fixed (fixed cost) if the banks do experts oursourcing contract system. Banks do not need an expensive rekruting costs and costs of supervision as well as possible the burden remains a long-term options. Once the contract is terminated Musharaka, Islamic banking experts simply return it to the parent company again.
Fourth, the most important benefit is that the growing Musharaka products and is expected to provide a multiplier effect in a more macro. For example: customer - with Musharaka financing can be enlarged scale of its business, expands opportunity to increase the customer's business profits resulting in at least two things, namely getting the company sejahteranya stakeholders, and the growing amount of zakat funds generated by the additional income. In addition, the enlargement also attempt to create new jobs, or reduce the unemployment rate. Reduced unemployment will result in more sejahteranya society in the broadest sense: economic and financial sense of the emergence of safer or reduced crime rates.
Fifth, with growing Musharaka products that in fact is closely related to the real sector, then in addition to economic value-added occurs in the activities of everyday society, then there is also the balance of the financial sector and real sector, which in turn makes the economy move into a more solid and more healthy.
XIII. IKHTITAM
God is fair by creating all kinds of creatures in pairs: day - night, small - large, high - low, profit - loss, men - women, old - young and so on. The changes that occurred between the two couples that make nature a dynamic move from time to time. Movement would be nice if there was a dynamic balance between the two pairs of living creatures, and both will be a dynamic movement very uncomfortable when the two pairs being experienced tremendous inequality.
Learn from it in ataslah, it is necessary to balance such mencintakan between the financial sector (finance) and the real sector. Monoter crisis and the emergence of economic crises since 1997, among others, is because of an imbalance of development and economic development at that time and before. Difficult to deny that there is development of the finance sector and at the same extraordinary distance behind the real sector. Among the consequences is the occurrence of the crisis. Not easy to deny that the financial sector development is also remarkable is triggered by the system of capitalism that swept the world in general and Indonesia in particular. Learning from that case, all parties should learn to not get stuck in the same hole twice.
What this paper offers, in part an attempt to take advantage of important lessons that imbalance. Whether coincidence or not, while symptoms shown by the movement of Islamic economics are driven by Islamic banks showed the same symptoms, when the portion murabaha dominate Islamic banking portfolio. Hopefully this simple idea can be a bidder for the economic problems that can happen again, to see the trend so far.
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