Cultural Integration in Islamic Financial Innovation: Implementation of Istishlahi Principles in Musyarakah Mutanaqishah Contracts in Multicultural Indonesia
Abstract
This research analyzes the implementation of the istishlahi (public benefit) principle in the DSN-MUI fatwa concerning Musyarakah Mutanaqishah (Diminishing Partnership) and its application within Indonesia's multicultural context. Employing a qualitative approach with content analysis and systematic literature review, this study examines primary sources, including DSN-MUI Fatwa No.73/DSN-MUI/XI/2008, and secondary sources from academic literature spanning 2015-2024. The findings demonstrate that the implementation of the istishlahi principle in the DSN-MUI fatwa successfully integrates nine fundamental principles (al-’adl, al-maslahah, al-yusr, al-barakah, al-yaqin, al-muwazah, al-istiqraar, al-taysir, and al-amanah) within an adaptive regulatory framework. Comparative analysis of implementation across various regions in Indonesia reveals significant variations in success rates and challenges encountered, with key factors including structural and operational adaptations according to local contexts. Case studies in Aceh, East Java, Makassar, and Sorong highlight the importance of integration with local value systems and active community involvement in successful implementation. This research provides theoretical contributions in developing a new understanding of the istishlahi principle's function as a bridge between Shariah compliance and the practical needs of a multicultural society, as well as practical implications for developing more inclusive and adaptive Islamic financial products.
References
Abedifar, P., Molyneux, P., & Tarazi, A. (2013). Risk in Islamic Banking. Review of Finance, 17(6), 2035–2096. https://doi.org/10.1093/rof/rfs041
Ahmad, A. U. F. (2011). Shari’ah Parameters of Musharakah Mutanaqisah in Islamic Finance: The Experience of Australian Institutions Offering Islamic Financial Services. ISRA International Journal of Islamic Finance, 3(2), 7–40. https://doi.org/10.55188/ijif.v3i2.130
Aisyah, E. N. (2023). The Implementation of Telemarketing Strategy on Refinancing Products in Bank Panin Dubai Syariah Malang. Al-Muhasib: Journal of Islamic Accounting and Finance, 3(2), 18–35. https://doi.org/10.30762/almuhasib.v3i2.1065
Akhmadi, S. (2019). Hukum Musyarakah Mutanaqhisah dan Implementasinya pada Perbankan Syariah. Volksgeist: Jurnal Ilmu Hukum Dan Konstitusi, 2(1), 53–61. https://doi.org/10.24090/volksgeist.v2i1.2283
Alia, N., Subli, M., Apriyanti, & Nadzar. (2024). Understanding and Implementing Islamic Law: Challenges and Solutions in Modern Contexts. Antmind Review: Journal of Sharia and Legal Ethics, 1(2), 72–82.
Amin, H. (2022). Maqasid-based consumer preference index for Islamic home financing. International Journal of Ethics and Systems, 38(1), 47–67.
Amin, H., Rahim Abdul Rahman, A., & Abdul Razak, D. (2014). Consumer acceptance of Islamic home financing. International Journal of Housing Markets and Analysis, 7(3), 307–332.
Ananda, M. R., Aliamin, A., & Mulyany, R. (2023). The Effect of Capital Adequacy, Non-Performing Financing, Efficiency, And Liquidity on Financial Performance in Sharia Commercial Banks in Indonesia. International Journal of Current Science Research and Review, 06(12). https://doi.org/10.47191/ijcsrr/V6-i12-51
Aspers, P., & Corte, U. (2019). What is Qualitative in Qualitative Research. Qualitative Sociology, 42(2), 139–160. https://doi.org/10.1007/s11133-019-9413-7
Asyiqin, I. Z., & Alfurqon, F. F. (2024). Musyarakah Mutanaqisah: Strengthening Islamic Financing in Indonesia and Addressing Murabahah Vulnerabilities. Jurnal Media Hukum, 31(1), 1–18. https://doi.org/10.18196/jmh.v31i1.20897
Azwar, Z., & Rinaldi, F. A. (2024). Consistency of the Indonesian Ulama Council in Using Istiṣlāḥ as a Method for Legal Istinbath. Al-Istinbath: Jurnal Hukum Islam, 9(1). https://doi.org/10.29240/jhi.v9i1.7680
Bakhtiar, B., Nelli, F., & Firdaus, F. (2022). Disclosure of Ijtihad: The Changes of the Early Time of Dawn as a Sharia and Science Integration Effort. Jurnal Ilmiah Al-Syir’ah, 20(1), 16. https://doi.org/10.30984/jis.v20i1.1803
Beck, T., Demirgüç-Kunt, A., & Merrouche, O. (2013). Islamic vs. conventional banking: Business model, efficiency and stability. Journal of Banking & Finance, 37(2), 433–447. https://doi.org/10.1016/j.jbankfin.2012.09.016
Calzolari, T., Genovese, A., & Brint, A. (2022). Circular Economy indicators for supply chains: A systematic literature review. Environmental and Sustainability Indicators. https://doi.org/10.1016/j.indic.2021.100160
Deng, S., Fu, K., Xu, J., & Zhu, K. (2021). The supply chain effects of trade credit under uncertain demands. Omega (United Kingdom), 98. https://doi.org/10.1016/j.omega.2019.102113
Elo, S., & Kyngäs, H. (2008). The qualitative content analysis process. Journal of Advanced Nursing, 62(1), 107–115.
Fauziah, Ramayah, T., & Abdul Razak, D. (2008). Factors influencing intention to use diminishing partnership home financing. International Journal of Islamic and Middle Eastern Finance and Management, 1(3), 235–248. https://doi.org/10.1108/17538390810901168
Feenstra, R. C., Inklaar, R., & Timmer, M. P. (2015). The next generation of the penn world table. American Economic Review, 105(10), 3150 – 3182. https://doi.org/10.1257/aer.20130954
Ghisellini, P., Cialani, C., & Ulgiati, S. (2016). A review on circular economy: The expected transition to a balanced interplay of environmental and economic systems. Journal of Cleaner Production, 114, 11 – 32. https://doi.org/10.1016/j.jclepro.2015.09.007
Gurvich, M. R. (2021). Reliability-driven analysis, design and characterization of rotorcraft structures: Decision-making framework. 77th Annual Vertical Flight Society Forum and Technology Display, FORUM 2021: The Future of Vertical Flight. https://doi.org/10.4050/f-0077-2021-16900
Hanafi, H. (2012). Critical perspectives on musharakah mutanaqisah home financing in Malaysia: exploring legal, regulative and financial challenges. Durham University.
Husnah, I. (2024). Efektivitas Penerapan Akad Musyarakah Mutanaqisah (MMQ) Pada Pembiayaan Griya Hasanah Di Bank Syariah Indonesia KCP Makassar Veteran. Journal of Institution and Sharia Finance, 7(2), 14–27.
Mahmood, S. (2015). Religious difference in a secular age: A minority report. In Religious Difference in a Secular Age: A Minority Report.
Mansori, S., Sambasivan, M., & Md-Sidin, S. (2015). Acceptance of novel products: the role of religiosity, ethnicity and values. Marketing Intelligence & Planning, 33(1), 39–66. https://doi.org/10.1108/MIP-03-2013-0050
Mergaliyev, A., Asutay, M., Avdukic, A., & Karbhari, Y. (2021). Higher Ethical Objective (Maqasid al-Shari’ah) Augmented Framework for Islamic Banks: Assessing Ethical Performance and Exploring Its Determinants. Journal of Business Ethics, 170(4), 797–834. https://doi.org/10.1007/s10551-019-04331-4
Morgan, H. (2022). Conducting a Qualitative Document Analysis. Qualitative Report. https://doi.org/10.46743/2160-3715/2022.5044
Mubarrak, H. (2017). Istiṣlāḥī Reasoning in Contemporary Jurisprudence: A Case Study of the Fatwa on Immunization Law in Aceh; [Penalaran Istiṣlāḥī dalam Kajian Fikih Kontemporer: Studi Kasus Fatwa Hukum Imunisasi di Aceh]. Ahkam: Jurnal Ilmu Syariah, 17(1), 199 – 222. https://doi.org/10.15408/AJIS.V17I1.6225
Muqorobin, A., & Alafianta, N. F. (2023). Financing by Instalment in Indonesian Islamic Bank: a Maqasidic-Analycal Study. Malaysian Journal of Syariah and Law, 11(2), 271 – 289. https://doi.org/10.33102/mjsl.vol11no2.503
Murray, A., Skene, K., & Haynes, K. (2017). The Circular Economy: An Interdisciplinary Exploration of the Concept and Application in a Global Context. Journal of Business Ethics, 140(3), 369 – 380. https://doi.org/10.1007/s10551-015-2693-2
Nienhaus, V. (2011). Islamic finance ethics and Shari’ah law in the aftermath of the crisis: Concept and practice of Shari’ah compliant finance. Ethical Perspectives, 18(4), 591–623.
Qureshi, F., & Hidayat, S. E. (2016). Challenges in Implementing Musharakah Mutanaqisah Islamic Home Financing in Malaysia. Journal of Islamic Financial Studies, 2(02).
Razak, D. A., & Fauziah. (2011). Consumers’ perception on Islamic home financing. Journal of Islamic Marketing, 2(2), 165–176. https://doi.org/10.1108/17590831111139875
Ruba’i, N. H. (2022). Pengaruh Persepsi Masyarakat Muslim, Kualitas Pelayanan dan Produk Pembiayaan Terhadap Keputusan Menjadi Nasabah Bank Syari’ah Kotabumi. IAIN Metro.
Shaikh, I. M. (2019). Determinants of Consumer Intention to Accept Musharakah Mutanaqisah Home Financing: Empirical Evidence from Malaysia and Pakistan. University of Malaya (Malaysia).
Teece, D. J. (2018). Business models and dynamic capabilities. Long Range Planning, 51(1), 40 – 49. https://doi.org/10.1016/j.lrp.2017.06.007
Warde, I. (2010). Islamic finance in the global economy. In Islamic Finance in the Global Economy. Edinburgh University Press.
Yan, N., He, X., & Liu, Y. (2019). Financing the capital-constrained supply chain with loss aversion: Supplier finance vs. supplier investment. Omega (United Kingdom), 88, 162 – 178. https://doi.org/10.1016/j.omega.2018.08.003
Copyright (c) 2024 Bimo Nugroho, Anwar Ma’rufi, Fathudin Fathudin, Dainora Jankauskienė, Sérgio António Neves Lousada
This work is licensed under a Creative Commons Attribution 4.0 International License.
