Presenters: Muh. Sajjaj Sudirman, Hasnidar
Affiliations: State Islamic Institute Ternate, Halu Oleo University
Room: 1
ICIES NEWS – The 4th International Conference on Islamic Economics Studies (ICIES) 2024 witnessed a significant presentation by Muh. Sajjaj Sudirman and Hasnidar from the State Islamic Institute Ternate and Halu Oleo University, respectively. Held in Room 1, their research titled “An Analysis Of Mudarabah Financing In Minimizing Moral Hazard In Sharia Financial Institutions In Realizing The Welfare Of The Ummah” drew considerable attention from attendees.
Their study delves into the persistent issue of moral hazard within the mudarabah financing system in sharia financial institutions. By employing descriptive qualitative research and library research methods, the authors meticulously reviewed previous studies, reference books, articles, and journals to unravel the complexities of this issue.
The findings reveal that moral hazard remains a significant challenge, arising from non-optimal monitoring and evaluation systems, conflicts of interest, asymmetry of information between fund owners (Shahibul maal) and fund managers (mudharib), and accountability limited to humans rather than God. These factors contribute to inefficiencies and risks in the financial system, ultimately affecting the welfare of the ummah.
To counter these challenges, Sudirman and Hasnidar proposed a multifaceted approach. Their recommendations include enhancing transparency and supervision, conducting due diligence, creating clear contracts, and implementing incentives and sanctions. Additionally, they emphasized the importance of education and training, regular reporting based on applicable accounting standards, and conducting Sharia audits. The accountability framework suggested by the authors covers three dimensions: humans, God, and nature, aiming to create a more holistic and ethical financial system.
The presentation sparked engaging discussions among scholars and practitioners, highlighting the need for robust mechanisms to mitigate moral hazard in sharia financial institutions. The insights provided by Sudirman and Hasnidar are expected to contribute significantly to the development of more effective and ethical financial practices in the Islamic finance industry.
The 4th ICIES 2024 continues to serve as a crucial platform for academics and professionals to share knowledge and foster advancements in Islamic economics, reinforcing the importance of such conferences in driving progress and innovation in the field.