Ascarya and Raditya Sukmana, Dr., SE., M.A. (2018) Modeling Islamic Financial Institution Performance Measurement Based on Maqasid al-Shariah. In: Maqasid Al-Shariah Based Index of Socio Economic Development. IIUM Press, Kuala Lumpur, Malaysia, pp. 466-490. ISBN 978-967-418-400-1

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Abstract

The development of worldwide Islamic finance has reached to US$1.3 Trillion at the end of 2013 with the annual growth (yoy) of 7.8%. In Indonesia, Islamic finance has developed at a faster rate as compare to the average growth worldwide. As an illustration, Islamic bank in Indonesia grows 35% (yoy) as of September 2013 with the total assets of 227.7 Trillion Rupiah. Meanwhile, in the same period. Islamic insurance or takaful grows 48% (yoy) with total assets reach as much as 15.9 Trillion Rupiah. Islamic finance cannot be detached from the Islamic teachings in which the sources are coming from the holy Qur'an and Hadits (the sayings of Prophet Muhammad, peace be upon him). For example, it is explicitly explained in the holy Qur'an that riba (interest) is forbidden, so that all operational aspects of Islamic finance must not involve in riba. So do the other injunction in Islam such as maysir (speculation) and gharar (uncertainty). In short, both sources have to be used as the guidelines in every single transaction in Islamic finance. Those injunctions are heavily stressed to achieved the Shariah objectives namely Maqasid al-Shariah.

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