Leveraging Islamic Finance to Overcome COVID-19 Challenges in South Asia

Closes:
Journal
South Asian Journal of Business Studies
Guest editor(s)
Kabir Hassan, Aishath Muneeza,

Submit your paper here!

Introduction

We invite submissions that explore the impact of COVID-19 on Islamic finance within the South Asian context. Our goal is to understand how the pandemic has influenced Islamic financial practices, institutions, and stakeholders in this region. "Islamic finance" is broadly defined to include all financial transactions and economic activities governed by Shariah principles (Hassan et al., 2022). 

Islamic finance has grown significantly in South Asia, driven by large Muslim populations and increasing interest in Shariah-compliant products. Countries like Pakistan, Bangladesh, Sri Lanka, and the Maldives have developed Islamic finance sectors in banking, capital markets, and insurance within dual financial systems (Hassan et al., 2024). In 2022, Pakistan began transitioning its banking system to an interest-free model following a Federal Shariat Court ruling, with MCB Bank converting 39 branches to Islamic operations (MCB, 2024). Similarly, Faysal Bank became a full-fledged Islamic bank with a 700-branch network (Business Recorder, 2022).  

Bangladesh's Ministry of Finance plans to raise Tk 50 billion through Sukuk, reflecting Islamic finance's potential (Islam, 2024). Sri Lanka is advancing its Islamic capital market, with sukuk listing on the Colombo Stock Exchange and the establishment of an accredited Shariah scholar list (Fernando, 2024). The Maldives aims to become South Asia's Islamic finance hub (Muneeza, 2015-2018). However, India faces legislative barriers that hinder Islamic finance adoption. Afghanistan's Islamic finance sector is in its infancy, and Nepal and Bhutan have minimal Islamic finance presence, requiring significant development efforts. 

The COVID-19 pandemic posed unprecedented challenges to Islamic finance in South Asia, affecting its growth and resilience. The pandemic impacted the region's economies, with varying government responses and economic outcomes (Irfan et al., 2023; Rasul et al., 2021). Bangladesh saw the highest increase in COVID-19 cases, followed by the Maldives and India, straining their healthcare systems and economies. Unemployment surged, with Nepal and India experiencing significant increases, while Afghanistan and Pakistan were less affected. Economic decline was severe in the Maldives and India, with large GDP decreases, while Pakistan and Bangladesh showed better resilience. The Maldives, reliant on tourism, was hit hardest by travel restrictions. 

Government responses varied, with Pakistan implementing targeted lockdowns, minimizing economic damage, while Nepal and India faced higher unemployment and economic decline due to prolonged lockdowns. Post-pandemic, South Asia faces challenges like economic recovery and unemployment. Islamic finance, with its principles of risk-sharing and ethical investing, offers potential solutions for economic stability and sustainable development. Integrating Islamic finance into recovery strategies could help South Asia mitigate the pandemic's economic impact and build resilient financial systems. 

List of Topic Areas

Proposed papers may address, but are not limited to, the following topics: 

  • The impact of COVID-19 on Islamic finance growth in South Asia. 
  • The role of Islamic financial institutions in providing economic relief during the pandemic. 
  • The intersection of fintech and blockchain with Islamic finance during COVID-19. 
  • Challenges and opportunities for Islamic microfinance in maintaining financial inclusion amid the crisis. 
  • The adaptive responses of Islamic finance to evolving regulatory standards post-COVID-19. 
  • Performance and resilience of Islamic investment vehicles, like Sukuk and Takaful, during the pandemic. 
  • Strategies for digital banking and remote service delivery by Islamic banks in response to the pandemic. 
  • Support mechanisms provided by Islamic banks to SMEs during economic uncertainty. 
  • Evolving risk management paradigms in Islamic finance due to pandemic-induced volatility. 
  • The advisory role of Shariah councils in navigating ethical and compliance issues during the crisis. 
  • Operational impacts and strategic responses of Islamic finance institutions to public health measures. 
  • Key lessons and insights for future growth and sustainability in Islamic finance post-pandemic. 

This call is open to papers using qualitative or quantitative methodologies that examine Islamic finance and its responses to COVID-19 in South Asia. Theoretical papers that further our understanding of Islamic finance issues in the context of the pandemic are also welcome. 

Submissions Information

Submissions are made using ScholarOne Manuscripts. Registration and access are available here.
Author guidelines must be strictly followed. Please see here.
Authors should select (from the drop-down menu) the special issue title at the appropriate step in the submission process, i.e. in response to ““Please select the issue you are submitting to”. 
Submitted articles must not have been previously published, nor should they be under consideration for publication anywhere else, while under review for this journal.

Key Deadlines

Submission Opening Date: September 20th, 2024 
Submission Deadline: August 20th, 2025 

Guest Editors

Professor Kabir Hassan, University of New Orleans, [email protected]
Professor Aishath Muneeza, INCEIF University, [email protected]

References

Business Recorder. (2022). Faysal Bank becomes full-fledged Islamic bank. Retrieved from https://www.brecorder.com/news/40217621 
Fernando, N. (2024). Colombo bourse to include sukuk products by end-May. Retrieved from https://www.dailymirror.lk/business-news/Colombo-bourse-to-include-suku…(CSE,underlying%20asset%20(normally%20tangible). 
Hassan, M. K., Mohamed, I., Shakib, S., Mubarak, M., Muneeza, A., & Biancone, P. (2024). Islamic finance in South Asian Association for Regional Cooperation (SAARC) Countries. In M. K. Hassan, P. Biancone, & A. Muneeza (Eds.), Islamic finance in Eurasia (pp. 45-79). Edward Elgar Publishing.
Hassan, M. K., & Muneeza, A. (2022). COVID-19 and Islamic Finance. Cambridge: Cambridge University Press.  
Irfan FB, Telford B, Hollon N, Dehghani A, Schukow C, Syed AY, Rego RT, Waljee AK, Cunningham W, Ahmed FS. (2023). Coronavirus pandemic in the South Asia region: Health policy and economy trade-off. Journal of Global Health. 5;13:06014. doi: 10.7189/jogh.13.06014. PMID: 37141526 
Islam, S. (2024). Govt plans raising Tk 50b with Sukuk to supplement bonds. Retrieved from https://today.thefinancialexpress.com.bd/first-page/govt-plans-raising-…;
MCB. (2024). Notice to Customers Of 39 Branches of MCB Bank Limited. Retrieved from https://www.mcb.com.pk/assets/documents/Print-Ad%E2%80%93Notice-to-Cust…;
Muneeza, A. (2015). Maldives aspires to become Islamic finance hub in South Asia via establishment of Maldives Center For Islamic Finance. Islamic Finance News, 12(47), p. 18. 
Muneeza, A. (2018). Maldives: the hub for Islamic finance in South Asia. Islamic Banker, 26, (March 2018). Retrieved from https://www.islamicbanker.co/2018/02/04/maldives-the-hub-for-islamic-fi…;
Rasul G, Nepal AK, Hussain A, Maharjan A, Joshi S, Lama A, Gurung P, Ahmad F, Mishra A, Sharma E. (2021). Socio-Economic Implications of COVID-19 Pandemic in South Asia: Emerging Risks and Growing Challenges. Frontiers in Sociology. 24;6:629693. doi: 10.3389/fsoc.2021.629693.