Islamic Finance Performance during Pandemic and Future Agenda

Dear Colleagues,

COVID-19 has interrupted the entire financial landscape, with everyone from academics to policymakers attempting to mitigate the economic impact whilst upholding a solid and sustainable financial system. Even though the nature of the ongoing crisis differs from that of 2008, Islamic finance's optimism will be critical in re-establishing the Islamic economy as a substitute mechanism to conventional finance. Digital disruption, including Islamic Fintech, allows Islamic banking to compete and prosper on an equitable basis.

At the individual and corporate levels, Islamic banking can help resolve challenges brought by economic upheavals. Social instruments of Islamic finance such as qardh-al-hasan, zakat, sukuk, and waqf are attractive choices for the Islamic banking system to utilize during and after this pandemic. These instruments assist vulnerable communities, SMEs, and corporate entities by providing immediate cash transfers and providing healthcare coverage and educational resources (Haider et al., 2020). Islamic finance is founded on the principles of social equality and the equitable distribution of wealth, which are aspects that make it a viable option in times of crisis.

The year 2020 was marked by digital transition, with the deployment of technological advances reaching new highs for individuals and businesses. Among the advancements preparing the ground for the next generation of data are artificial intelligence (AI), the internet of things, and virtual and augmented reality. Islamic banking institutions can use such innovations to achieve Environmental, Social, and Governance (ESG) goals. The integration of corporate strategy with ESG goals is critical for the Islamic financial services industry, as unusual changes in climate and uncertainties affect individuals and their surroundings.

As deposit-taking entities, Islamic banks as well as other Islamic financial institutions need to abide by a slew of regulations governing their risk-taking behavior. They are unable to entice micro, small, and medium-sized enterprises (MSMEs), which are extremely risky but are the backbone of an economic system. The pandemic has harmed MSMEs, as millions of people in this sector have lost their employment and the threat of poverty has risen. In contrast, during this period, most Islamic banks set a benchmark in terms of deposits and assets. This has huge ramifications for Islamic banking and finance, as being categorized as "Islamic" elevates significant concerns about their contribution during the pandemic era. It appears that the Islamic banking system is colliding with the traditional paradigm rather than relocating toward and drifting away from set targets. Now is the time to reassess the advancement of the Islamic banking industry.

Notably, Islamic finance, with its underlying social identity, has enormous potential to eliminate poverty and become the best alternative in the post-pandemic context. To fully realize its potential, Islamic social finance should use advanced technologies and rely on Islamic financial institutions in the post-pandemic era. Nowadays, the mix of social finance, digitization, and ESG is critical for Islamic banking and finance. The Islamic banking industry could indeed accomplish sustainable growth by integrating these identified forces. This mix can help Islamic banks initiate innovation activities, customer-centric, MSMEs-centric, and investment-based solutions. In this direction, the Islamic financial system will be able to achieve both Maqasid Al-Shariah and ESG goals.

Call for papers

Irrespective of the ongoing debate and discussion among academics, this Special Issue intends to address problems regarding the future route map of Islamic banking in the post-pandemic era. The Special Issue will specifically address, but will not be limited to, the following sub-themes:

• The evaluation of Islamic banking institutions in the post-pandemic context;
• Islamic finance and ESG goals;
• Socioeconomic concerns and the role of Islamic banks;
• The power of Islamic social finance in the post-pandemic era;
• Islamic finance industry digitalization;
• Banking revolution Industry 4.0;
• Islamic Fintech developments and prospects;
• Accounting, governance, and legal challenges in the Islamic banking sector;
• The resilience and growth of Islamic capital market in the post-pandemic era; 
• Islamic cryptocurrency;
• The importance of value-based intermediation in the post-pandemic era;
• A blockchain-based scheme for zakat, qardh-al-hasan, and other charitable contributions;
• Smart Islamic banking;
• Innovations in Islamic blended finance;
• Disruptive innovations and technologies for Islamic finance integration;
• Islamic social finance and sustainable development framework and evaluation;
• The digitalization of zakat and waqf collection and dissemination;
• Micro-takaful and Islamic microfinance in the digital world;
• Deposit insurance for Islamic microfinance – issues, regulatory oversights, and sustainable development.

Dr. Ahmed Imran Hunjra
Prof. Dr. Muhammad Ishaq Bhatti
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. International Journal of Financial Studies is an international peer-reviewed open access quarterly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1800 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

• Islamic business
• Islamic banking and finance
• ESG goals
• accounting
• governance
• Islamic social safety net
• Islamic financial inclusion
• Islamic microfinance
• Islamic capital markets
• sustainability
• digitalization of Islamic finance
• Islamic social finance
• Islamic Fintech
• banking revolution industry 4.0
• Islamic blended finance