SEMINAR EKONOMI ISLAM PERINGKAT KEBANGSAAN 2009 (SEIPK ’09)
“KE ARAH PENGUKUHAN DAN PEMAHAMAN APLIKASI SISTEM EKONOMI ISLAM DI MALAYSIA”
1
Islamic Finance Programmes in Malaysian Universities: An
Assessment of Content1
Shahida Shahimi, PhD*
Suhaili Alma’amun**
Mehmet Asutay, PhD***
Abstract
The changing landscape of Islamic financial services has been very influential not only in
Malaysia but also at the international level. To facilitate this industry’s participation in the
fast changing environment due to globalization and financial liberalization, the need to
upgrade and equip the industry is becoming more apparent. Today, many universities report
record numbers of students enrolling in Islamic finance and related courses. The Islamic
financial industry shows strong interest in hiring qualified graduates, and the latter see
exciting employment opportunities. This paper is intended to give the reader an insight into
existing Islamic finance and related programmes offered by Malaysian universities. By
evaluating the relevance and effectiveness of their contents, this paper is carried out in order
to examine to what extend does Malaysian universities are capable of nourishing the Islamic
financial industry with quality human capital, locally and internationally. Relevant policy
implications are also proffered in the paper.
Keywords: education, higher learning institutions, human capital, Islamic finance.
1. Introduction
The efforts to develop the nation and to provide education to the people is a continuous
process made possible for the Malaysian government through increasing number of higher
learning institutions. The main challenge in provisions of higher learning is transforming the
field to facilitate changes imposed by, among others, the forces of globalization and
internalization, rapid technological innovation, access and equity concerns and the changing
nature of the marketplace of higher learning. 2 Higher learning institutions in Malaysia as in
most other countries are operating both in the public and private sector. To ensure long-term
survival in the local and international markets, these institutions have to offer programmes
competitively based on demand.
One of the demands in the marketplace today is Islamic economics, banking and finance due
to the emergence of Islamic banking and finance industry. In other words, most universities in
Malaysia, if not all, need to offer at least a course and teach on Islamic economics, banking
1
Paper presented at Seminar Ekonomi Islam Peringkat Kebangsaan organised by the Dept. Of Shariah
and Economics, Academy of Islamic Studies, UM, 10-11 January 2009 at Balai ILMU APIUM.
*
Senior lecturer of Islamic Economics, Banking & Finance (corresponding author).
**
Lecturer of Islamic Economics, School of Economics & PhD candidate of Durham Islamic Finance
Programme, Institute of Middle Eastern and Islamic Studies, Durham University.
***
Lecturer in Political Economy of the Middle East, SGIA, Durham University, UK.
2
In order to improve the quality of education and to speed up reforms in the field, the government of
Malaysia through its Ministry of Higher learning (MOHE) has launched two national level plans in
2007, namely, the National Strategic Plan for Higher learning 2007-2057, and the National Action Plan
for Higher learning 2007-2010. The former has acknowledged internationalization of higher learning as
one of the key strategic thrusts for laying the foundation of higher learning beyond 2020.
2
SEMINAR EKONOMI ISLAM PERINGKAT KEBANGSAAN 2009 (SEIPK ’09)
“KE ARAH PENGUKUHAN DAN PEMAHAMAN APLIKASI SISTEM EKONOMI ISLAM DI MALAYSIA”
and finance, as well as Islamic business and accounting as a response to the demand (Wan
Sulaiman, 2008). This is might be the reason why the government chooses Islamic finance as
one of the niche areas for internationalization of its higher learning. By choosing Islamic
finance, Malaysia is confident with the ability to compete effectively with the international
players, and through its establishment as an international Islamic finance education hub for
the region (world), it is hoped that leading universities in this area be positioned here.
The Islamic financial industry is potential in creating vast employment and job opportunities
for the country given the growing demand for graduates of Islamic finance and related
programmes from local and international industries. However, there are serious deficiencies
in producing the next generation of banking and finance professionals. Most significantly,
there is a shortage of scholars who are well versed both in shariah as well as modern
economics, banking and finance. As a matter of fact, majority of the personnel involved in
this industry have limited knowledge and skills, are not very familiar with Islamic financial
products, and lack the necessary caliber. These drawbacks will limit the ability of staff to
design and structure new innovative and sophisticated financial products which require new
expertise and skills. This is crucial not only for the future development of the industry
following the increase demand of professionals practitioners but also to provide a pool of
competent scholars and who will be able to serve the shariah supervisory boards of Islamic
financial institutions both locally and internationally.
Hence, the development of human capital in Islamic finance is a major challenge. It is more
pronounced in the nascent global Islamic banking and finance industry, and becoming an
increasingly critical issue in academic, industry and policy making circles. The challenges
faced by higher learning institutions in strengthening their Islamic finance programmes
involved call for an active interaction of university and industry in research and education,
together with government action policy, which are the main concern of this paper. The
objective of the paper is to assess the content of Islamic finance programmes offered by
Malaysian higher learning institutions. This study contributes to the literature by providing a
good documentation of available degrees in Islamic finance programmes offered by various
Malaysian universities, i.e., Diploma, Bachelor, Post-Graduate Diploma, Master and PhD.
The findings will serve as valuable direction and guidance for the existing and interested
academic community to formulate a more dynamic and effective Islamic finance programmes
to attract potential students, and to enhance Malaysia as international Islamic finance
educational hub.
The rest of the paper is organized as follows. Section two briefly discusses approaches
employed in developing the content of Islamic finance programmes at university level.
Section three will review Islamic finance programmes widely offered by Malaysia
universities. Section four discusses challenges facing the existing Islamic finance
programmes, and section five concludes and recommends policies to enhance the future
provisions of quality and relevant Islamic finance programmes.
2. Approaches in Content Development of the Programmes
The practice of segregating Islamic and modern education (from school to university level)
has made Islamic knowledge appears to be inadequate. The eclectic model as suggested by
Jabir (1987) has become a popular way of addressing the dichotomy between tradition and
modernity in Muslim educational institutions. This approach holds that one must select both
from traditional thought as well as from modern contemporary thought that which is most
sound and useful. Hence, it is important to integrate the two to form an intellectual structure
that will provide the basis for achieving the required objectives.
The strategy of integrating Islamic knowledge with modern and progressive knowledge or
‘the Islamization of knowledge’ has become the prime objective and challenge. The
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SEMINAR EKONOMI ISLAM PERINGKAT KEBANGSAAN 2009 (SEIPK ’09)
“KE ARAH PENGUKUHAN DAN PEMAHAMAN APLIKASI SISTEM EKONOMI ISLAM DI MALAYSIA”
International Institute of Islamic Thought (IIIT), the Institute of Islamic Thought and
Civilization (ISTAC), the International Islamic University of Malaysia (IIUM) and the
Muslim Students’ Association in America (MSA) are among the institutions in the forefront
of this effort. With this theoretical foundation (epistemology) in Islamic education, human
capital development in the Muslim world can play positive roles in the process of nation
building. Since integration and Islamization are processes, Muslim scholars and teachers must
address pressing issues on the basis of solid conceptual and philosophical foundations. In
addition, they must evaluate the capability of their institutions of higher learning to utilize
modern teaching-learning techniques for producing knowledgeable students for both sound
akhlaq as well as thinking.
A number of universities offering Islamic studies in Malaysia have responded positively to
this eclectic model. The Academy of Islamic Studies of University of Malaya (APIUM) has
introduced a major and minor in Islamic studies, in both its undergraduate and postgraduate
levels. The subject of shariah as major, for example, is now offered in conjunction with the
study of politics, law, economics and management. The Islamic Science University of
Malaysia (USIM) is adopting the same approach. The study of muamalah is combined with
the study of economics, the study of da’awah is offered concurrently with management, while
the study of shariah complements the study of conventional law.
3. Current State of the Islamic Finance Programmes
In recent observations on the teaching of Islamic banking and finance at the undergraduate
level in selected Muslim countries, Tahir (2008) classifies the Islamic finance curriculum
(content) into four categories, namely, full-fledged bachelor’s programmes, minor in Islamic
banking and finance, Islamic banking as a part of the economics and/or Islamic economics
package, and single Islamic banking and finance course as part of bachelor’s degree
programmes in economics, finance or business administration. Meanwhile, several
universities in Western and Muslim countries allow for a specialization in Islamic finance
studies within their general graduate or postgraduate programmes in economics, accounting,
banking and finance, while others have integrated the Islamic perspective into the general
economics, business administration and finance programmes.
The Malaysian universities differ in terms of which schools or faculties are responsible in
offering the programmes and conferring the degrees. Only in two universities; UM and UKM,
the programmes are handled by Faculty of Islamic Studies, whereas the rest are handled by
Faculty of Economic, Business, Finance, Management or Muamalat respectively. In many
universities, either official or unofficial collaboration between faculties has been established
for a quite long period to meet the teaching need. For the past few years, the availability of
manpower is limited to lecturers borrowed from the Islamic Studies as well as Economic,
Banking and Finance Faculties of the same or from different universities who were hired as
part-timers. Currently they are trying to develop in-house manpower for teaching the
economics, business and finance subjects, and vice-versa. The need emerged due to the past
experience, e.g. for the case of IIUM in which the teachers of Shariah and the Islamic Studies
faculties are trained in the classical tradition in the sense that they are good at the details but
not on the substance necessary for Islamic economics and finance. They can generate
familiarity with the shariah terminology and concepts, but they cannot prepare the students
for thinking along the Shariah lines (Tahir, 2008).
The Islamic finance programmes offered by the universities could be possibly described by
three different approaches, i.e. integrated study, field of specialization, and modules or
elective courses. Firstly, an integrated study in which the combination of the syllabus implies
the elements of Islamic studies, economics, banking and finance, or the eclectic model as of
Jabir’s (1987). IIUM and APIUM were among the pioneers of this approach of the Islamic
finance or related university programmes. Subsequently, the same approach was followed by
SEMINAR EKONOMI ISLAM PERINGKAT KEBANGSAAN 2009 (SEIPK ’09)
“KE ARAH PENGUKUHAN DAN PEMAHAMAN APLIKASI SISTEM EKONOMI ISLAM DI MALAYSIA”
4
the UKM, Universiti Utara Malaysia (UUM) and USIM. Apart from these, some of
Malaysian universities introduce and include the modules or courses (from now on modules)
of Islamic economics, banking and finance as the elective in their syllabus to broaden the
student’s knowledge and give them an early exposure towards the corresponding areas.
Following the tremendous growth of the Islamic banking and finance industry, several
universities in Malaysia have taken another step forward by offering the undergraduates and
postgraduates study with specialization in the Islamic economics, banking and finance.
Altogether, there are eleven Diploma, twelve Bachelor, fourteen Master, fourteen PhD
degrees in Islamic economics, finance, banking or muamalat (excluding programmes which
only offer the Islamic economics and finance modules as elective) as depicted by Table 1
below.3
Table 1: Statistics of Islamic Finance Programmes offered by Malaysian Universities
According to Underlying Approach
Public Institutions
Private Institutions
Level of study
Level of study
Approach
Diplom
a
Undergraduate
MA/MSc
/MBA
Ph
D
Diplom
a
Undergraduat
e
MA/MSc
/MBA
Ph
D
Integrated
(valueoriented)
2
10
5
6
10
-
-
-
Modules or
Electives
3
5
3
-
2
3
-
-
Field of
Specializatio
n
-
6
7
6
2
-
2
1
By looking into the nature of these different approaches, some advantages and disadvantages
of each approach can be highlighted here, and thus leading to rooms for improvement. The
aim of integrated approach is to produce capable human resources which are competent not
only in Islamic studies that related to the economics and finance subjects but also capable
with both conventional and Islamic sides of economics, banking and finance studies. The
significance of this approach is that the Islamic economic, banking and finance courses are
offered together with a good grounding of Islamic studies, particularly in usul fiqh and the
fiqh for economics, banking and finance (Tahir, 2008). Moreover, students are given in depth
taught programme of Arabic language to the extent that passing the Arabic language modules
is a requirement to obtain the degree. The importance of knowledge of the Arabic language is
recognized as it is the language of the Qur’an and the sunnah. Possessing functional
knowledge of the Arabic language is crucial as they have to keep referring to these main
sources of the Islamic jurisprudence and for the purpose of studying of fiqh (Tahir, 2006:19).
Therefore, the syllabus structure itself is designed to provide a comprehensive knowledge of
Islamic studies besides the study of Islamic and conventional economics, banking and
finance.
3
Refer to Appendix A for a complete list of degrees offered by Malaysian higher learning institutions.
5
SEMINAR EKONOMI ISLAM PERINGKAT KEBANGSAAN 2009 (SEIPK ’09)
“KE ARAH PENGUKUHAN DAN PEMAHAMAN APLIKASI SISTEM EKONOMI ISLAM DI MALAYSIA”
The most common Islamic studies and Islamic economics and finance subjects available in
the syllabus are: usul fiqh, fiqh al-muamalat, Islamic legal maxims, Islamic economics,
Islamic banking and finance, takaful, Islamic economic thoughts, Islamic management,
Islamic accounting. On the other hand, the following subjects are less common or only
offered currently by the universities: principles and practices of zakat and tax, zakat
accounting, accounting for Islamic banking, fiqh al- zakat, fiqh al-mawarith and management
of baitulmal, waqaf and faraid.
In the case of the Islamic economics, banking and finance modules offered as elective
subjects, students are only given foundations of Islamic economics, banking and finance
knowledge as basic exposure. Subjects offered in so far, among others; Introduction to
Islamic economics, Islamic banking, finance or business. Even though students do not possess
a sound and strong knowledge of the corresponding subject, it is hoped that the exposure will
initiate and encourage them to expand their knowledge in Islamic economics, banking and
finance further later on.
Currently, many universities have started to offer degrees specializing in the Islamic banking
and finance field, in which the Islamic and conventional economics, banking and finance
constitute the major part of the syllabus. A few related Islamic studies subjects are included,
among others, foundation of Arabic language for muamalat, usul fiqh for finance and
banking, qawaid fiqh for finance and banking, Islamic jurisprudence and Islamic legal maxim
for muamalat, and Arabic language for muamalat. All of the degrees so far are offered by the
Faculties of Economics, Business, Banking, Finance or Management. Contrary to the
integrated approach, without strong foundation in shariah and Arabic language, the
programmes that are asserted specializing in the respective field are vulnerabe and
questionable. However, the early initiative to construct the programmes to meet the demand
of human resource should be appreciated. Recently, most of the higher learning institutions in
Malaysia follow the same pattern of rebranding the name of the programmes using
‘muamalat’ term.
With reference to the diverse name of each degree as well as the course content, it can be
concluded that Islamic finance programmes in Malaysian universities are dynamic and
comprehensive both at the undergraduate or postgraduate levels. Most of the syllabuses
contain subjects which emphasize and give in depth knowledge on Islamic studies which is
very much related to Islamic muamalat. These universities also have evolved by offering
more specific courses of Islamic economic, banking and finance such as takaful, baitul mal,
waqf and faraid, zakah accounting and Islamic entrepreneurship. The system and structure are
constantly changing to meet the growing needs of professionals in the industry as well as
teachers in the higher learning institutions.
4. The Islamic Finance Programmes in Malaysia: Challenges
4.1 The academic programmes
In a knowledge-based economy, the university becomes a key element of the innovation
system as human capital provider. The higher learning institutions should be able to meet the
demand of the human resources in the sense that they should keep improving all aspects of the
programmes. This consists of the followings:
a)
Aims of Programmes
Universities are facing a dilemma either their aims is shariah learning or executive
banking and finance learning as UK universities have to remain with the executive
and technical learning. While in Malaysia the same dilemma is facing by the
integrated study of Islamic Finance and Banking running by the Faculties of Islamic
6
SEMINAR EKONOMI ISLAM PERINGKAT KEBANGSAAN 2009 (SEIPK ’09)
“KE ARAH PENGUKUHAN DAN PEMAHAMAN APLIKASI SISTEM EKONOMI ISLAM DI MALAYSIA”
Studies. The programmes have been questioning of their aims either they want to
produce shariah students or economic and finance students. There is a necessity of
having a clear mission statement as to the aims of each of the programmes for the
robust progress of the industry. The aim of programmes regarding academic,
professional and training aspects, skills learning with the idea of developing talents or
academic learning should be properly clarified to develop talented individuals for
various requirements of the industry. Universities should not be expected to produce
programmes which can individually directly respond all the requirements of the
industry; some may specialize in legal dimensions; some other in developing skills
oriented programmes and some others may develop entirely academic programmes;
each of these should be perceived as important for the development industry in their
own particular way in responding to the specialized needs and labour division.
b)
The content issues
The usual debate on the developments taking place in Islamic finance shapes the
content issues. Therefore, mostly, programmes are devoid of the value system and
teach mostly technical dimensions of Islamic finance. PhD research is becoming
more repetitive due to lack of creative and original thinking. These content issues are
segregated as follows:
i.
General modules of Islamic Finance studies
Graduates from the best universities offering best Islamic Finance studies
programmes are preferred and highly demanded by the industry. In order to
offer the best programmes in the corresponding field will take such a great
effort in constructing balanced, right blend of rigorous and up-to-date
curriculum. After screening the syllabus and the programmes offered so far,
the following components of the general modules should be included besides
the conventional economics, banking and finance. They are Islamic
Microeconomics and Macroeconomics, Islamic Finance, Islamic Banking,
Islamic Economics Thought, Usul Fiqh for Finance and Banking, Qawaid
Fiqh for Finance and Banking, Islamic Jurisprudence and Islamic Legal
Maxims for Muamalat. The key point to keep updated in terms of the
curriculum is that the universities should be able to cope with the current
development and changes in Islamic banking and finance industry. Taking
into account the current developments in the industry, therefore the following
modules should be or have started to be introduced in several universities;
Risk Management in Islamic Financial Institutions, Islamic Entrepreneurship,
Zakat Accounting, Islamic Wealth Management. The lack of comprehensive
modules which are the combination of Shari’ah and finance need to be
addressed when the each module are being constructed.
ii.
The teaching of Shari’ah
The teaching of Shari’ah which is commonly conducted in a traditional
manner within the confinement of the classical schools of the fiqh does not
really stimulate the students. Tahir (2008) suggests the reviewing of the
Shari’ah teaching methodology in the sense that the curriculum design should
not only be able to produce students who are conversant in the existing fiqhi
thought on issues related to economics, business and finance but at the same
time be able to think independently on the same topics in terms of the Qur’an
and the Sunnah rather than the fiqh. In regards to fiqh studies, the students
may be taught the principles for interpretation of the Qur’an and the Hadith
and general linguistic rules for interpretation of the texts. He, in addition says
that there is need to groom the students in Usul Al-Fiqh in which the
following aspects should be emphasized; an introduction to the classical
schools of the fiqh, issues in the modern age and how the process of ijtihad is
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SEMINAR EKONOMI ISLAM PERINGKAT KEBANGSAAN 2009 (SEIPK ’09)
“KE ARAH PENGUKUHAN DAN PEMAHAMAN APLIKASI SISTEM EKONOMI ISLAM DI MALAYSIA”
working today. It should be noted that is approach suggested by Tahir (2008)
is really important in any universities that opt for the holistic approach.
iii.
The teaching of Arabic Language
Eventhough the teaching of Shari’ah could be conducted in English as a
medium of instruction, Arabic Language has its special position in any
programmes claimed to be a part of Islamic studies including the Islamic
Finance studies itself. The significance of having Arabic Language module in
the Islamic Finance studies is because it is much related to the Shari’ah study
as well in the sense that students equipped with the Arabic Language skill
would find it is useful for them when they have to refer to any Arabic texts.
Apart of that, it would be better for the students in the future in case if they
want to bring themselves up to the international level or when they have to
work and communicate with the people from the Middle East. Including an
evidence of functional knowledge of Arabic as part of the admission
requirements will limit the number of the students enroll for the particular
programmes. So, it is strongly suggested here that Arabic Language module
should be at least given at the foundation level but having in depth module
could be an option for the students. What has been done by the International
Institute of Islamic Economics (IIIE) of the International Islamic University
Pakistan is one of the good examples. The students lacking of functional
knowledge of Arabic are required to pass a separate six-course package for
18 credits. Successful completion of the above package entitles the students
to a Certificate in Arabic Language, in addition to the bachelor’s degree with
honours in Islamic Banking and Finance. The students also have the option of
claiming a Diploma in Arabic Language after completion of the following
two additional courses for 6 credits. The above target of achieving functional
literacy in Arabic is achieved without compromising on the contents of the
main program while at the same time, keeping the length of the academic
program 4 years. This, in turn, requires the students to spend a summer
semester during the course of their studies (Tahir, 2008).
iv.
The industrial attachment/Practical training
Most of the undergraduate programmes are required the students to undertake
practical training meanwhile others give flexibility for the students to opt for
the practical training or research paper. The exposure to the real world of the
industry through the means of practical training should be retained in the
curriculum as it is good for the soft skills development.
International and national collaboration between various programmes are also very
important in terms of course contents and research.
c)
The materials
Lack of material in the libraries is again an important issue, which leaves students
using Internet extensively. One cannot see Islamic Economic Studies or the Review
of Islamic Economics in their libraries. Limited and scattered sources available have
created another constraint in terms of the teaching materials. While the conventional
studies of the economics, banking and finance have easy access to a large number of
books, journals even teaching softwares, the study of Islamic economics, banking and
finance seems to be lacking of and left behind by the technology. Uniformity of the
teaching materials can be achieved if the scholar and academicians unite altogether
producing the textbooks and setting up our own e-journals. For this purpose,
collaborations between IRTI, Islamic Foundation UK, IBFIM, YAPEM, IKIM,
ISTAC, Islamic Economics and Finance Centre in the universities such as EKONIS
and IIiBF are welcomed.
SEMINAR EKONOMI ISLAM PERINGKAT KEBANGSAAN 2009 (SEIPK ’09)
“KE ARAH PENGUKUHAN DAN PEMAHAMAN APLIKASI SISTEM EKONOMI ISLAM DI MALAYSIA”
8
d)
The human resources
Apparently in Malaysia, universities have started to develop human resource in the
corresponding field by sending them for training and further their study. But, the
number of teachers who are fully capable of both shariah and economics/finance
knowledge is limited. In addition, available teachers tend to teach and impart the
knowledge instead of educate the students to be dependent and think critically.
Internship should be fully supported by the university in order to link the
academicians with the industry. The fact that the lacking of the talented and highly
qualified teachers due to the imminent retirement of many of the existing expert or
leaving the universities to join the industry is inevitable. Many academic posts in
Malaysian universities in this field are now being filled by new and young lecturers
and in certain higher learning institutions such as IIUM and INCEIF, scholars from
abroad has been hired. This approach is actually good for bringing in and transferring
the ideas from the outside. However it would be better to find people from our own
resources to take up these positions. On the other hand, in the UK, since this
programmes are shaped around individual academics, who have interest in the
subject, they remained the main staff and the resource person in their universities to
supervise research and teach the subject. In other words, each programme became
‘individual’ programme. Examples for this: again Professor Archer in Sussex,
Professor Presley (and later Dr H. Dar), Dr Seif Tag El-Din in MIHE, etc. Thus, one
individual doing everything related to Islamic banking and finance in their
departments due to shortcomings in the financial issues. Reading and Bangor
programmes do not have this shortcoming but they are again shaped around an
‘individual’. This again is related to institutionalisation; as a conventional MA/MSc
cannot be run with one person, this should be acknowledged to Islamic finance related
programmes. Thus, institutionalisation is crucial for the perpetuation and
sustainability of these programmes, so that they can remain functioning even after the
individuals who established those programmes leaves.
e)
The network between academia and the industry
It is important that academic institutions should also be able to engage with the
professional sector to enhance innovation in the Islamic finance sector, as financial
innovation results in economic growth as empirically have been shown. Think tanks
and universities play a number of critical roles in financial innovations, including
identifying; articulating, and evaluating current or emerging issues and needs,
problems or proposals and providing a constructive forum for the exchange of ideas
and information. Collaborations with the industry is essential; as research on financial
engineering cannot be conducted without establishing direct communication and
institutional relationship between industry and academic and training institutions.
Such collaborations will be useful in determining the needs of the sector rather than
providing education and training with ‘blind eyes’ without knowing the requirements
of the industry. Such collaborations will also overcome repetition of research,
improve efficiency in resource allocation and hence identify potential issues related
accredited programmes. Developing networks with the industry are also important for
the purpose of student’s practical training and internship.
f)
The fragility of being small departments, sub-departments or units responsible
handling the programmes
Being small departments, sub-departments or units have several disadvantages in
certain aspects. For instance, their roles in the respective school or universities
sometimes are neglected due to the small size of the departments or units. To the large
extent, it is hard to get the fully approval of the research funding application. In
Malaysia, the existence of two different schools having similar departments/subdepartment/units with almost similar functions has led to an inefficient and
SEMINAR EKONOMI ISLAM PERINGKAT KEBANGSAAN 2009 (SEIPK ’09)
“KE ARAH PENGUKUHAN DAN PEMAHAMAN APLIKASI SISTEM EKONOMI ISLAM DI MALAYSIA”
9
underutilization of human resource. For instance, the co-existence of Muamalat
department under Islamic Studies School and Islamic Economics department under
Economics and Business school of the respective university. In the UK, the noninstitutionalized programmes suffer from financial resources and therefore, for
instance, they cannot expand their staff bases, such as MIHE, and also available
material in their libraries. This is an issue for universities in the UK, where monetary
resources are rather scarce. It would be better and more efficient if the roles and
functions of the similar departments/sub-department/units collaborates between each
other and thus, facilitate the administrations, research funding and human resource
matters.
g)
The students from non-Muslims community
Taking into account that the study of the Islamic Economics, Banking and Finance
has started to attract non-Muslims, academicians in this field should begin to figure
out on how to structure the syllabus that would enable them to follow.
h)
Political circumstances
This challenge is facing by the UK universities only. With reference to MIHE, it is
exception to individual legacies; as Islamic Foundation, which is the main structure of
which MIHE is part, established its Islamic Economics Unit as back as in 1979.
Islamic Foundation has the mission and the experience to run successful programmes.
However, political circumstances in the UK and also the political positioning of the
Islamic Foundation undermines the academic reputation of MIHE, which brought the
MIHE to disrepute through adverse newspaper coverage a number of times. This will
be repeated again in the coming days. The closure of Loughborough programmes is
also related to political reasons alongside Professor Presley’s early retirement. In
order to overcome the adverse impact of the political developments, the mission, aim
and objectives of Islamic financial programmes should be properly developed.
4.2 Other challenges
Among the most important challenge faced by the government is to internationalize Islamic
finance programmes of Malaysian universities in term of teaching, research and services, i.e.
cross-border education.4 The government has initiated a number of proactive actions to
promote Malaysia as a leading centre for higher learning in the region, but fail to recognize
the urgent need of improving the standard of teaching, research and services in Islamic
finance at all levels in its overall scheme. The teaching faculties in many cases are short of the
needed academic staff, teaching materials, knowledge, scholarship, as well as support and
commitment from their respective administrators.
The promotion of international strategic alliances through smart partnerships can create
greater synergy that will bring about new approaches, new technologies, and new areas of
specialization. Such collaborative efforts amongst Islamic financial institutions would
strengthen the ability to leverage on the industry’s expertise. The introduction of innovative
Islamic financial products in a specific jurisdiction can be expanded to other jurisdictions,
which in turn, will contribute to broaden and deepen Islamic financial markets and thus
strengthen the overall development of the Islamic financial industry. In addition, collaboration
between academic researchers and the practitioners will enable the practical application of
such research findings.
4
Internationalization of higher education is the process of integrating an international/intercultural dimension into
the teaching, research and service functions of the institution.
SEMINAR EKONOMI ISLAM PERINGKAT KEBANGSAAN 2009 (SEIPK ’09)
“KE ARAH PENGUKUHAN DAN PEMAHAMAN APLIKASI SISTEM EKONOMI ISLAM DI MALAYSIA”
10
Commercialization of education has been gaining around the world over since around the
close of last century. Profit, not the quality of final product - the human being – tends to
become the driving force of the education industry. There are hundreds of private colleges
providing higher learning in Malaysia, but only a few have shown special interest in the area
of Islamic finance. Furthermore, with the government now restraining available scholarships
to British universities, and given limited highly regarded Islamic finance programmes
elsewhere, it seems to make very good sense for Malaysian universities to encourage potential
government sponsored students, mainly universities’ teachers, to enroll to their Islamic
finance programmes.
However, a number of issues remain, such as regional (world) recognition or well-establish
reputation. Increased transnational education activity and new legal trade rules require that
more attention be given to the question of quality assurance and accreditation of cross-border
education programs and providers. It is clear that national quality assurance schemes are
being challenged by the complexities of the international education environment. Not only is
it important to have domestic or national policy and mechanisms, it is equally important that
attention be given to developing an international policy approach to quality assurance and
accreditation. Can coherence between a domestic or national system and an international
policy framework actually strengthen national quality schemes rather than weaken them?
Clearly there are risks and opportunities associated with this issue, but to do nothing is a risk
in itself. Quality assurance of higher learning is in some countries regulated by the sector and
in others by the government, to a greater or lesser degree. The key point is that authority for
quality assurance, regulation, and accreditation for cross-border delivery needs to be
examined and guided by stakeholders and bodies related to the education sector and not left in
the hands of trade officials or the market.
Last but not least, the ultimate challenge for the government is limited budget capacity to
allocate funds to meet the escalating costs of higher learning. Education funding is an
important strategic investment towards nation’s capacity building. Malaysian government has
allocated RM11.252billion in the Eight Malaysian Plan 2001-2005 for higher learning
development programmes. For year 2004, the allocation was equivalent to 4.4% of total
public expenditure and has contributed to 2.1% of growth domestic product (GDP). The
Islamic finance and the associated areas are of major strategic and economic interest to
Malaysia, and investment in research and development (R&D) is important for Islamic
finance education. Since universities continue to be mainly government funded, and the
private sector operators in this field do not have long enough time perspectives to get
involved in any substantial basis in supporting this field of study, the funding largely remains
of the government responsibility. 5 Without a commensurate increase in public expenditure to
fund the necessary infrastructure and resources, the development or reformation of higher
learning service industry will be hindered.
Most of the reform measures recommended in higher learning institutions centre around two
major propositions – improving efficiency in the functioning of public universities on the one
hand, and mobilizing resources from non-governmental sources, on the other. The former
category of reform measures focus on efficiency in resource use so that more resources are
available even when additional resources are not allocated to the sector. Measures to diversify
the sources of funding or develop alternative arrangements to provide higher learning belong
to the latter category of reforms. A general trend in these reform measures is to shift the
burden of cost from the public to private sector, especially the Islamic banking and financial
5
The government did allocate a significant funding for the Islamic finance education but only to
limited recipient, such as BNM-linked institution, INCEIF.
SEMINAR EKONOMI ISLAM PERINGKAT KEBANGSAAN 2009 (SEIPK ’09)
“KE ARAH PENGUKUHAN DAN PEMAHAMAN APLIKASI SISTEM EKONOMI ISLAM DI MALAYSIA”
11
institutions, so that within a reasonable time period, the financial strain of the government can
be reduced. 6
In this regard, the government should also encourage government-linked companies (GLCs)
and private sector to create and fund Research Chairs in specific areas like muamalat, Islamic
economics, Islamic banking, Islamic finance, Islamic accounting, Islamic management, and
Islamic entrepreneurship in public universities and take the lead in research and teachings of
Islamic finance sector which is of national importance. This move will certainly increase
funding in research and development (R&D) and teaching. Besides, more Muslim
philanthropists should also be approached to fund or sponsor activities of the faculties,
centers, department chairs and lectureships offering platforms for further enhancement of the
field.
6. Conclusion
The Islamic finance programmes in Malaysian universities, as well as the challenges facing
by the government, industry and the academic community summarized in this paper suggest
that a pressing need of transformation of Islamic finance curriculum in the universities to
overcome the shortage of qualified and skilled human capital in the Islamic financial industry.
The specific human resource requirements of the industry include the need both for shariah
graduates to have an adequate knowledge of banking and finance, and for economics, banking
and finance graduates to have an adequate knowledge of the applicable shariah rules and
principles. The challenges faced by local higher learning institutions to improve the curricular
involved call for an active interaction of university and industry in research and education,
together with government action policy to facilitate the provision of Islamic finance at the
higher learning level, as well as map the way forward in sustaining development in higher
learning. The government should view higher learning as a strategic investment in the human
capital development, and should continue to finance it, the funding should be increased to
strengthen and spur the growth of higher education so as to boost the quality and quantity of
human capital.
6
There may be a role for government to act to provide scholarships, or to encourage the private sector
to provide scholarships, which might constitute incentives to make choices in this field.
12
SEMINAR EKONOMI ISLAM PERINGKAT KEBANGSAAN 2009 (SEIPK ’09)
“KE ARAH PENGUKUHAN DAN PEMAHAMAN APLIKASI SISTEM EKONOMI ISLAM DI MALAYSIA”
References:
Jabir, Taha. Outline of a Cultural Strategy. (Herndon, USA: IIIT, 1987).
Tahir, S. 2008. Islamic finance – Undergraduate level, International Islamic Finance
Education Symposium “Enhancing Human Capital to Facilitate Growth of Islamic
Finance”, April, 29-29, Kuala Lumpur, Malaysia.
Wan Sulaiman Wan Yusoff Alfattani. 2008. Malaysian experiences on the development of
Islamic
economics,
banking
and
finance,
http://islamiccenter.kaau.edu.sa/7iecon/English/English%20Papers/%5B28%5D%20
Wan%20Sulaiman.pdf (20 Nov 2008).
http://enm.iiu.edu.my
http://www.apium.um.edu.my
http://www.iic.edu.my
http://www.iiu.edu.my
http://www.inceif.org
http://www.iuctt.edu.my
http://www.kal.ums.edu.my/spkal
http://www.kiperak.edu.my
http://www.kipsas.edu.my
http://www.kliuc.edu.my
http://www.kuin.edu.my
http://www.kuis.edu.my
http://www.udm.edu.my
http://www.uitm.edu.my
http://www.ukm.my
http://www.um.edu.my
http://www.uniten.edu.my
http://www.upm.edu.my
http://www.upsi.edu.my
http://www.usim.edu.my
http://www.usm.my
http://www.utar.edu.my
Appendix A: List of Malaysian Higher Education Institutions Offering Islamic Finance and Related Programmes
A) Programmes with
Diploma Level
integrated study of
University
Name of Degree
Field of
Islamic Economics,
Specialization
Banking and Finance 1.
Kuliyyah of Muamalat, INSANIAH Diploma in Islamic Banking
and Islamic Studies
University College
2.
Kuliyyah of Muamalat, INSANIAH Diploma in Insurance and
University College
Takaful
3.
School of Management and Muamalat, Diploma in Islamic Banking
KUIS
4.
Kolej Islam Johor
Diploma in Islamic Studies
(Islamic Economics)
Kolej Islam Johor
Diploma in Islamic Banking
5.
School of Management Studies, Diploma in Accounting
KIPSAS
6.
School of Management Studies, Diploma in Banking and
KIPSAS
Finance
7.
School of Management Studies, Diploma in Business Studies
KIPSAS
8.
Faculty of Management, Kolej Islam Diploma in Islamic Banking and
Darul Ridzuan
Finance
9.
Department of Islamic Finance and Diploma in Accounting
Muamalat, Kolej Dar al-Hikmah
10.
Department of Islamic Finance and Diploma in Islamic Studies
Muamalat, Kolej Dar al-Hikmah
(Muamalat)
11.
Department of Islamic Finance and Diploma in Islamic Finance
Muamalat, Kolej Dar al-Hikmah
Undergraduate Level
12.
Department
of
Syariah
& Bachelor
in
Muamalat
Management, API, UM
Management
13.
Department of Syariah & Economics, Bachelor in Syariah
Major in Syariah and
API, UM
Economics
14.
KEMNS, IIUM
Bachelor of Economics
Specialization in:
Mode of Study
a) Islamic
Economics
b) Finance
c) International
Economics
d) Development
Economics
15.
16.
KEMNS, IIUM
KEMNS, IIUM
17.
Department of Shariah, Faculty of
Islamic Studies, UKM
Faculty of Economics and Muamalat,
USIM
18.
19.
20.
Department
of
Business
Administration,
Kuliyyah
of
Muamalat, INSANIAH University
College
Department
of
Business
Administration,
Kuliyyah
of
Muamalat, INSANIAH University
College
Bachelor of Accounting
Bachelor
of
Business Specialization in:
Administration
a) Finance
b) General
Management
c) Marketing
d) Information
Technology
Course
Bachelor of Islamic Studies with Major in Muamalat
Honour (Syariah)
and Islamic Finance
Bachelor
of
Muamalat Specialization in:
Administration (Hons)
a) Islamic Banking
and Takaful
b) Corporate
Administration
c) Investment and
Financial
Services
Bachelor of Business
Administration (Islamic
Banking and Finance)Hons
Bachelor of Business
Administration (Islamic
Financial Management) Hons
21.
22.
23.
Department
of
Business Bachelor of Business
Administration,
Kuliyyah
of Administration (Risk
Muamalat, INSANIAH University Management and Takaful) Hons
College
Postgraduate Level: MA/MSc/MBA
Department of Syariah & Economics, Master in Syariah
Specialization in:
API, UM
a) Syariah
and
Economy
b) Syariah
and
Management
Department of Shariah, Faculty of Master of Syariah
Major in Muamalat
Islamic Studies, UKM
and Islamic Finance
24.
KEMNS, IIUM
Master of Economics
25.
KEMNS, IIUM
Master of Science in Accounting
26.
KEMNS, IIUM
Master of Science in Finance
27.
Department of Syariah & Economics,
API, UM
Postgraduate Level: PhD
PhD in Syariah
Either
by
research
coursework
dissertation.
full
or
and
Either
by
full
research
or
coursework
and
dissertation.
3 options given:
a) Coursework
and thesis.
b) Coursework
and
research
paper.
c) Coursework
only.
Coursework
and
dissertation.
2 options:
a) Coursework
and research
paper.
b) Coursework
only.
Specialization in:
By research
c) Syariah
and
Economy
28.
29.
Department of Shariah, Faculty of
Islamic Studies, UKM
KEMNS, IIUM
30.
KEMNS, IIUM
31.
KEMNS, IIUM
32.
The Institute of Islamic Banking and
Finance (IIiBF), IIUM
d) Syariah
and
Management
PhD ( Syariah)
Major in Muamalat By research.
and Islamic Finance
PhD in Economics
Dissertation and a
comprehensive
examination.
PhD in Accounting
Coursework
and
thesis.
PhD in Business Administration
Coursework
and
thesis.
PhD in Islamic Banking and
By research.
Finance
B) Programmes with
Islamic Economics,
Banking and Finance
as modules or
electives
University
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Faculty of Business Management,
UiTM
Faculty of Business Management,
UiTM
Faculty of Business Management,
UiTM
Diploma Level
Name of Degree
Diploma in Banking
Diploma in Investment Analysis
Diploma in Business Studies
(Insurance)
School of Business Infrastructure, Diploma in Accounting
KLIUC
School
of
Business
Studies, Diploma in Business Studies
International Islamic College
Undergraduate Level
School of Social Sciences, USM
Bachelor of Economics
Faculty
of
Economics
and Bachelor of Economics
Management, UPM
Department of Economics, Faculty of Bachelor of Economics
Economics and Administration, UM
Labuan School of International Bachelor of International and
Business and Finance, UMS
Offshore Banking
Labuan School of International Bachelor
of
International
Business and Finance, UMS
Financial Economics
Department of Accounting, College of Bachelor of Accounting (Hons)
Business
Management
and
Accounting, UNITEN
Department of Finance, Faculty of Bachelor of Finance (Hons)
Accounting and Management, UTAR
Department of Finance, Faculty of Bachelor
of
Business
Accounting and Management, UTAR
Administration (Hons) Banking
and Finance
Postgraduate level: MA/MSc/MBA
Field of
Specialization
Mode of Study
14.
15.
16.
Graduate School of Management,
UPM
Department of Management, Faculty
of
Management
and
Human
Development, UTM
Institute of Graduate Studies, UPSI
MBA
Master
of
(Technology)
By coursework.
Management
Master of Accounting
By coursework.
No
information
available.
C) Programmes with
specialization in the
Islamic Economics,
Banking and Finance
University
Diploma Level
Name of Degree
1.
Faculty of Business and Finance,
IUCTT
Diploma in Islamic Banking
2.
Faculty of Business and Finance,
IUCTT
Diploma in Takaful
3.
Department of Accounting and
Finance, College of Business, UUM
Undergraduate Level
Bachelor of Islamic Finance and
Banking (with Honours)
4.
Department of Accounting and
Finance, College of Business, UUM
Bachelor
of
Muamalat
Administration with Honours
5.
School of Economics, Faculty of
Economics and Business, UKM
Faculty of Business Management,
UiTM
Bachelor of Economics
6.
7.
8.
9.
Field of
Specialization
Module of Islamic
Economics
Bachelor
of
Business
Administration (Hons) Islamic
Banking
Bachelor
of
Business
Management (Islamic Finance)
with Honour
Bachelor of Islamic Finance
Department of Banking and Finance,
Faculty of Business Management and
Accounting, UDM
Labuan School of International
Business and Finance, UMS
Postgraduate Level: MA/MSc/MBA
School of Economics, Faculty of Master of Economics
Module of Islamic
Economics and Business, UKM
Economics.
3 options given:
a)
Coursework
and
Mode of Study
10.
School
of
Distance
Education, USM
11.
Graduate Studies and Research,
Faculty of Business and Economics,
UPSI
The Management Centre, IIUM
Master
13.
Research and Innovation
College of Business, UUM
Office,
MSc (Islamic Banking)
By research.
14.
Research and Innovation
College of Business, UUM
Office,
MSc (Islamic Finance)
By research.
15.
INCEIF
Master in Islamic Finance
16.
Either coursework
or coursework and
dissertation.
Coursework.
INCEIF & International Capital MSc in Investment Banking and
market Association (ICMA), Reading Islamic Finance
University, UK
School of Social Sciences, USM
Master of Social Sciences One of the research By research.
(Economics)
areas
is
Islamic
Political Economy.
Postgraduate Level: PhD
School of Economics, Faculty of PhD in Economics
Module of Islamic Either coursework
Economics and Business, UKM
Economics.
and thesis or thesis
12.
17.
18.
Learning
Master of
(Economics)
Social
academic
paper
b)
Coursework
and
dissertation
c)
Thesis only
Science One of the research
areas
is
Islamic
Economics.
One of the research
areas
is
Islamic
Finance.
One of the research
areas
is
Islamic
Banking
and
Finance.
MBA
By research.
By research.
Coursework
research.
and
19.
School
of
Distance
Education, USM
Learning
20.
School of Social Sciences, USM
PhD
of
Social
(Economics)
21.
Graduate Studies and Research,
Faculty of Business and Economics,
UPSI
PhD
22.
Graduate School of Management,
UPM
PhD
23.
Research and Innovation
College of Business, UUM
PhD
24.
INCEIF
Office,
PhD (Economics)
PhD in Islamic Finance
only.
One of the research By research.
areas
is
Islamic
Economics.
Science One of the research By research.
areas
is
Islamic
Political Economy.
One of the research By research.
areas
is
Islamic
Finance.
One of the research By research.
areas
is
Islamic
Finance.
Areas of supervision: By research.
Muamalat
Management
Islamic Finance
Islamic Insurance
By research or
coursework
and
dissertation.
API
= Akademi Pengajian Islam
(Academy of Islamic Studies), UM
IIUM
= International Islamic University of Malaysia
INCEIF
= International Centre for Education in Islamic Finance
KUIN
= Kolej Universiti INSANIAH
(INSANIAH University College)
IUCTT
= International University College of Technology Twintech
KEMNS = Kuliyyah of Economics and Management Sciences, IIUM
KIPSAS
= Kolej Islam Pahang Sultan Ahmad Shah
(Sultan Ahmad Shah Islamic College)
KLIUC
= Kuala Lumpur Infrastructure University College
KUIS
= Kolej Universiti Islam Antarabangsa Selangor
(Selangor International Islamic University College)
UDM
= Universiti Darul Iman Malaysia
(Universiti of Darul Iman Malaysia)
UiTM
= Universiti Teknologi MARA
(University of Technology MARA)
UKM
= Universiti Kebangsaan Malaysia
(National University of Malaysia)
UM
= University Malaya
(University of Malaya)
UMS
= Universiti Malaysia Sabah
(Labuan School of International Business and Finance - LSIBF)
UPM
= Universiti Putra Malaysia
(University of Putra Malaysia)
UPSI
= Universiti Pendidikan Sultan Idris
(Sultan Idris University of Education)
USIM
= Universiti Sains Islam Malaysia
(Islamic Science University of Malaysia)
USM
= Universiti Sains Malaysia
(University of Science, Malaysia)
UTAR
= Universiti Tunku Abdul Rahman
(Tunku Abdul Rahman University)
UTM
= Universiti Teknologi Malaysia
(University of Technology Malaysia)