MALAYSIA ISLAMIC FINANCE EDUCATION REPORT

(MIFER 2016) Printed by UUM Press, Universiti Utara Malaysia

06010 UUM Sintok, Kedah

Shaping the Future for Islamic Finance Educators

First Edition 2016

Copyright © ICIFE 2016/1438H. All rights reserved.

Published by the International Council of Islamic Finance Educators

(ICIFE)

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, whether electronic, mechanical, photocopying, recording, or otherwise without prior written permission of the publisher, nor be otherwise circulated in any form of binding or cover other than that in which it is published and without a similar condition including this condition being imposed on the subsequent purchaser.

MALAYSIA ISLAMIC FINANCE EDUCATION REPORT (MIFER) 2016 ISBN: 978-967-13714-5-9

International Council of Islamic Finance Educators Level 3, Kulliyyah of Economics and Management Sciences

International Islamic University Malaysia P.O Box 10, 50728 Kuala Lumpur

MALAYSIA Tel: +603-6196 4694 / 3636

Website: www.icife.net

Printed in Malaysia by UUM Press

i

TABLE OF CONTENTS

FOREWORD VII

PREFACE IX

ACKNOWLEDGEMENTS XI

ICIFE EXECUTIVE COMMITTEE XII

LIST OF RESEARCHERS XIII

RESEARCHERS FROM PARTICIPATING INSTITUTIONS XV

EXECUTIVE SUMMARY XVII

INTRODUCTION 1

GENERAL BACKGROUND 1

PROJECT EPP7 AND ISLAMIC FINANCE EDUCATION IN MALAYSIA 1

Initiatives Under EPP7 3

The International Council of Islamic Finance Educators (ICIFE) 3

VISION AND MISSION OF ICIFE 4

SCOPE AND PURPOSE OF MIFER 2016 5

METHODS AND PROCEDURES 6

Online Data Search 6

Focus Group Discussions 6

Surveys 7

Content Analysis 7

Round Table Discussion 7

PART ONE: PROGRAMS AND EMPLOYABILITY 8

RESEARCH BACKGROUND 8

PROGRAM 8

EMPLOYABILITY 10

RESEARCH ON PROGRAM AND EMPLOYABILITY 12

RESEARCH OBJECTIVES 13

RESEARCH METHODOLOGY 13

MUAMALAT & ISLAMIC FINANCE (MIF) PROGRAMS OFFERED IN

MALAYSIA 15

DEMAND AND SUPPLY OF MIF GRADUATES 18

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Background of the MIF Graduates 18

Demand for Muamalat and Islamic Finance (MIF) Graduates 22

Supply of MIF Graduates 24

MIF Graduates Respondents Acquired Skills and Competencies 27

Employers’ Perceptions on Quality of MIF Graduates 28

Feedback from Employers 29

VIEWS OF EXPERTS IN FOCUS GROUP DISCUSSION 30

Views on MIF graduates 31

Future needs of the industry with respect to MIF graduates 33

The Way Forward for MIF Program Delivery 34

GAP ANALYSIS ON MIF EDUCATION 35

PART TWO: ISLAMIC FINANCE CURRICULUM DEVELOPMENT 44

RESEARCH BACKGROUND 44

RESEARCH SCOPE 44

RESEARCH OBJECTIVES 44

REVIEW OF MQA MUAMALAT & ISLAMIC FINANCE STANDARD 44

PROPOSED EPP7: DOMAINS FOR ISLAMIC FINANCE 50

Towards Developments of a ‘Domains’ Construct in Islamic Finance 50

PROPOSED EPP7: CURRICULUM STRUCTURE 53

MIFER EMPIRICAL SURVEY AND RESULTS ON CURRICULUM 59

FINDINGS OF MIFER SURVEY ON CURRICULUM 60

MQA MIF STANDARD WITH CURRICULUM GUIDELINE 61

PART THREE: TALENT DEVELOPMENT 63

CURRENT STATUS AND INITIATIVES FOR IMPROVEMENT 63

RESEARCH BACKGROUND 63

DATABASE DEVELOPMENT 64

General Criteria for categorization of experts into the domains 66

Talent Distribution by University and Domain 67

Observations on talent distribution by domain 68

Distribution by University and Seniority/Position 69

Observations on talent distribution by seniority 70

Distribution by Seniority, Gender and Domain 71

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Observations on talent distribution by seniority, gender and domain 72

Overall observations about the database findings 72

MODULES DEVELOPMENT 73

Observations on modules development in phase I 77

Observations on modules development in phase II 78

CONTINUOUS EDUCATION PROGRAMS (CEPs) 78

What the CEPs have to address 78

Why the CEPs have not taken place 79

Moving forward 79

Planned CEPs for 2016 80

GENERAL CONCLUSION AND STRATEGIC DIRECTION 81

GENERAL CONCLUSION 81

PART ONE: PROGRAM AND EMPLOYABILITY 81

Summary of major findings on programs study 81

PART TWO: ISLAMIC FINANCE CURRICULUM 82

Summary of major findings on curriculum study 82

PART THREE: TALENT DEVELOPMENT 83

Summary of major findings on the talent study 83

POLICY IMPLICATIONS AND STRATEGIC DIRECTION 84

PART ONE: PROGRAM AND EMPLOYABILITY 84

Policy Implications from the programs study 84

PART TWO: ISLAMIC FINANCE CURRICULUM 85

Policy Implications from the curriculum study 85

PART THREE: TALENT DEVELOPMENT 86

Policy Implications from the talent study 86

REFERENCES 88

iv

List of Tables

Table 2.1: Components of Questionnaire for Graduates and Company ...................... 14

Table 2.2: Number of Items for Skills ......................................................................... 14

Table 2.3: List of MIFER-FGR Panelists .................................................................... 14

Table 2.4: ICIFE Domains Based on Approaches ....................................................... 16

Table 2.5: Levels of Program based on ICIFE Domains ............................................. 16

Table 2.6: ICIFE Domains Based on Level ................................................................. 18

Table 2.7: MIF Graduates Gender Based on Highest Qualification Level Achieved .. 19

Table 2.8 MIF Graduates Gender Based on Employment in Job Sectors .................... 19

Table 2.9 Highest Qualification Level Achieved by MIF Graduates based on

Employment in Job Sectors ......................................................................................... 20

Table 2.10 MIF Graduates by Gender Based on Salaries Earned ................................ 20

Table 2.11 Highest Qualification Level of MIF Graduates Based on Salaries Earned 21

Table 2.12 Job Sectors of MIF Graduates Based on Salaries Earned .......................... 21

Table 2.13: Measurement Scale for Skills and Competencies .................................... 24

(with reference to Figure 2.12) .................................................................................... 24

Table 2.14 Gaps Analysis: MIF Graduates Skills Acquired and Market Required ..... 35

Table 2.15: Gap Analysis ............................................................................................. 37

Table 3.1: Comparative Analysis MQA MIF Certification Levels .............................. 45

Table 3.2: MIF Programme Structure Component Analysis ....................................... 48

Table 3.3: EPP 7 Proposed Bachelor Programme Structure Credit Hour Allocation .. 52

Table 3.4: Comparative Curriculum Analytics of MQA Muamalat and Islamic Finance

Standard with EPP 7 .................................................................................................... 53

Table 3.5: Distribution of credits per domain and percentage of total course credit .. 56

Table 3.6: Comparative Programme Structures with Islamic Finance Domains ......... 59

Table 4.1. Distribution by institution and domain ....................................................... 67

Table 4.2: Distribution by Institution and Position ...................................................... 69

Table 4.3. Distribution by Seniority, Gender and Domain .......................................... 71

Table 4.4: Modules completed in phase I .................................................................... 77

Table 4.5: Modules for phase II ................................................................................... 78

Table 4.6: Planned CEPs for 2016 ............................................................................... 80

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List of Figures

Figure 1.1: EPP7 Inauguration Ocassion ....................................................................... 2

Figure 1.2: ICIFE Launced at Lanai Kijang, Bank Negara Malaysia ............................ 4

Figure 1.3: Promoting ICIFE to International Universities ........................................... 4

Figure 1.4: Discussion Meeting with Participating Malaysian Universities .................. 6

Figure 1.5: Collaboration Network – ICIFE and International Participant Members .... 7

Figure 2.1: Number of UG Programs offered by Institutions ...................................... 15

Figure 2.2: Number of UG Programs Based on ICIFE Domains (MIF) ...................... 16

Figure 2.3: Number of PG Programs (Specialization) by Institutions ......................... 17

Figure 2.4: Number of PG (Specializations) Based on Domains ................................. 17

Figure 2.5: MIF Graduates Respondents by Gender .................................................... 19

Figure 2.6: MIF Graduates Respondents by Educational Level .................................. 19

Figure 2.7: MIF Graduates Respondents Based on Employment in Job Sectors ......... 19

Figure 2.8: MIF Graduates Respondents Based on Salaries Earned ............................ 20

Figure 2.9: Number of MIF Graduates Who Have Undergone Internship Programs .. 22

Figure 2.10: Duration of Internship ............................................................................. 22

Figure 2.11: Nature of Business of the Employer Respondents .................................. 23

Figure 2.12: Skills and Competencies of MIF Graduates Expected by Employers .... 24

Figure 2.13: Trend of MIF Students Enrolment and Graduates ................................... 24

Figure 2.14: Undergraduate Students Enrolment (1999-2015) .................................... 25

Figure 2.15: Undergraduate Students Enrolment Based on Domains (1999-2015) ..... 25

Figure 2.16: MIF Graduates Graduated Based on Domains (1999 -2015) .................. 26

Figure 2.17: MIF Graduates According to Institutions (2000-2014) ........................... 26

Figure 2.18: MIF Graduates Based on Program Domains (1999-2015) ...................... 26

Figure 2.19 Statistics of Skills and Competencies Acquired by MIF Graduates ......... 28

Figure 2.20: Gap Analysis: Students’ Enrolment and Graduates by 2015................... 36

Figure 2.21: Gaps Analysis on Enrolment and Graduates based on Domain .............. 38

Figure 2.22: Gaps Analysis on Programs Offered based on ICIFE Domains .............. 38

Figure 3.1: Analytical MQA MIF Programme Based Curriculum Framework ........... 47

Figure 3.2: MQA MIF – EPP 7 Programme Learning Outcomes ................................ 54

Figure 3.3: Comparative MIF EPP 7 Programme Structure components .................... 55

Figure 3.4: Islamic Finance Domain Based Approach ................................................ 56

Figure 3.5: Programme Credits between Islamic and conventional courses ................ 57

Figure 3.6: An Integrative Approach to Islamic Finance programme Development ... 59

Figure 4.1: Talent distribution by gender and position ................................................ 71

Figure 4.2: SOP for Training Modules Development .................................................. 76

vi

List of Acronyms

AIBIM Association of Islamic Banking Institutions Malaysia AIF Asian Institute of Finance BNM Bank Negara Malaysia CAGR Compound annual growth rate CIIF Chartered Institute of Islamic Finance Professionals CSR Corporate Social Responsibility EPP7 Entry Point Project Number Seven ETP Economic Transformation Programme FAA Finance Accreditation Agency FGD Focus Group Discussion FSI Financial Services industry GRTD Global Round Table Discussion HEFCE Higher Education Funding Council for England IBF Islamic Banking and Finance IBFIM Islamic Banking and Finance Institute Malaysia ICIFE International Council of Islamic Finance Educators IFE Islamic Finance Education IFEKSP Islamic Finance Education and Knowledge Services Providers IFN Islamic Finance News IFSI Islamic Finance Services Industry IIUM International Islamic University Malaysia INCEIF International Centre for Education in Islamic Finance ISRA International Shari’ah Research Academy for Islamic Finance KUIN Kolej Universiti Insaniah KUIS Kolej Universiti Islam Antarabangsa Selangor MEHL Ministry of Education and Higher Learning MIF Muamalat and Islamic Finance MIFC Malaysia International Islamic Financial Centre MIFER Malaysia Islamic Finance Education Report MOHE Ministry of Higher Education MQA Malaysian Qualifications Agency MQF Malaysian Qualifications Framework NEC National Economic Council PhD Doctor of Philosophy SIDC Securities Industry Development Corporation UAE United Arab Emirates UiTM Universiti Teknologi MARA UKM Universiti Kebangsaan Malaysia UM University of Malaya UNIMAS Universiti Malaysia Sarawak UNIMAP Universiti Malaysia Perlis UniSZA Universiti Sultan Zainal Abidin UMK Universiti Malaysia Kelantan UMP Universiti Malaysia Pahang UMS Universiti Malaysia Sabah UMT Universiti Malaysia Terengganu UPM Universiti Putra Malaysia USIM Universiti Sains Islam Malaysia USM Universiti Sains Malaysia UTM Universiti Teknologi Malaysia UUM Universiti Utara Malaysia

vii

FOREWORD

Prof. Dr. Khaliq Ahmad

ICIFE Founding President

Malaysia invests substantially in developing human capital for the Islamic financial services industry through high quality Islamic finance education The thrust to harness human capital in Islamic Finance has been identified in Entry Point Project 7 (EPP 7), one of the Malaysian government’s identified key niche areas for future economic growth. Almost all the institutions of higher learning in the country offer at least some specialized modules if not full-pledged programs in Islamic Finance education. As at June 2016, there are 50 course providers and 18 universities offering bachelor and post graduate degrees in Islamic Finance. In ensuring high quality education, two factors are essentials: qualified educators and quality curriculum in Islamic Finance programs offered. International Council of Islamic Finance Educators (ICIFE) set up to oversee Islamic Finance education

ICIFE felt the need to find out the actual state of talents or educators and curriculum developments in Islamic Finance in Malaysia. A research was commissioned to a team of scholars headed by Professor Dr Rosylin Mohd Yusof for Islaimic finance programs, Professor Prof. Dr. Mohamed Aslam Bin Mohamed Haneef and Assoc. Prof Dr. Syed Musa Bin Syed Jaafar Alhabshi, to pursue a one-year research. I am indeed pleased to see the outcome the collaborative efforts of 24 academicians from various universities in Malaysia in the form of a country report known as Malaysia Islamic Finance Education Report (MIFER) 2016. It focuses on three fundamental areas of Islamic Finance education (IFE): IFE Programs and Employability of Students; Curriculum Development; and Talent Development. Finally, in reflecting intensive activities undertaken at ICIFE, the MIFER team must be congratulated for their critical and penetrating analysis of IF education within the higher institution of learning in Malaysia. In this context, I would like to acknowledge the efforts of many stakeholders - Ministry of Higher Education Malaysia, Ministry of Finance Malaysia, PEMANDU and the Malaysian Qualifications Agency of which I will always pray for

viii

Prof. Dr. Nor Hayati Ahmad

ICIFE Deputy Vice –President

Allah SWT to bless you.

With Islamic Finance assets displaying a robust growth of about 15-20 percent per year, the development of human capital in Malaysia is increasingly vital to provide adequate pool of talents to support this growth. Some 50,000 graduates in the field of Islamic Finance will be needed to meet the demand in the next decade. MIFER 2016 objectively addresses the impact of this growth to Islamic Finance educators, researchers, students and the industry players. A number of pertinent issues regarding the talent inequality between supply and demand, the gulf in graduates’ skills identification and quality assurance of Islamic Finance education were analysed and findings were presented in MIFER 2016. Hence, we look forward to share with you, highly valuable information on talents, programs curriculum and future initiatives in Islamic Finance education in Malaysia.

As a leading global hub in Islamic Finance, Malaysia continue to emphasize on quality educators and quality graduates; who are able to meet global standards and fulfill various market niche. For this purpose, an in-depth analysis of Islamic Finance education is presented based on five important domains; Islamic Finance, Islamic Economics,Islamic Accounting, Islamic Management and Shariah & Islamic Law. This is a rare insights into the talents based on the specified niche areas. In this respect, we are indebted to the Central Bank, various representatives from the banking institutions and capital market practitioners for coming forward in collaborative efforts to enhance Islamic Finance education that will meet both the academic and practical requirements.

Wassalam.

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PREFACE

Prof. Dr. Rosylin Mohd

Yusof

The Malaysian Islamic Finance Education Report

(MIFER) is a novel idea of the International Council of

Islamic Finance Educators (ICIFE). This report which is

intended to be produced annually for Malaysia will

serve two important purposes. First, it will present the

state of affairs on all matters concerning Islamic

Finance education in Malaysia and demonstrate

changes or improvements from the previous years.

Secondly, it will identify, present and discuss issues

that may need the attention of different stake holders

from time to time, as a way of keeping focused on

Malaysia’s vision for becoming the global hub of

Islamic finance education.

MIFER 2016 is the first output of this nature. It is

based on three studies that have explored different

but related components of Islamic Finance education

in Malaysia and the talents available according to

their respective domains and seniority. As it is the

first of its kind, the MIFER Team hopes that it will

generate great interests and enthusiasms in Islamic

Finance education. We look forward to feedback

from all stakeholders and hope to improve the data

and analyses in future reports.

Prof. Dr. Mohamed Aslam

Mohamed Haneef

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Assoc. Prof. Dr. Syed Musa Al-

Habshi

It is heartening to note all Islamic Finance Programs

offered by universities in Malaysia have been

certified by Malaysia Qualification Agency (MQA).

MQA MIF Standards 2012 assures standardization

in terms of content and quality of the IF program

offered; in particular the program in learning

outcome, curriculum design and delivery as well as

body of knowedge. At ICIFE the classification of

Islamic Finance into six domains: Islamic Finance,

Islamic Economics, Shariah and Law, Islamic

Accounting, Islamic Management/ Marketing, and

Quantitaive Methodology in Islamic Finance. Futher

promote a strategic balance between

generalization and specialization of IF disiclpines in

pursuit of knowledge excellent.

The current report further highlights some of

the inconsistencies in the programs, curriculum

and talent related matters. Some thoughts are

shared on what needs to be done to sort out

those inconsistencies. However, the ultimate

suggestion is again to bring together

stakeholders to discuss the issues and find ways

to reconcile them. This is very important for

Malaysia not only for unifying its domestic

systems but also for its strategic direction as a

global hub for IF education. If the rest of the

world is to look up to Malaysia as the global

leader in IF education, Malaysia must have

robust standards for its programs, curriculum

and talent, which would define a Malaysian

brand.

Dr. Selamah Maamor

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ACKNOWLEDGEMENTS

Praises be to Allah (SWT) for bestowing the MIFER team at UUM, IIUM and the

rest of the researchers for the strong support in providing individual university

data on students’ enrollements, graduation and employability. It has not been

an easy tasks but the good coordination, united by the common aspiration of

producing a comprehensive report of Islamic Finance education in Malaysia has

superseded all barriers. Thank you to the researchers, deans or heads of

departments in various participating universities for your contribution. Our

special thanks to Dr Selamah Maamor who has led the team with full

commitment.

Without adequate funding, this report is impossible to be conducted and

completed.The funding for this report has been provided by ICIFE and EPP7

through the Ministry of Higher Education (MOHE) and PEMANDU from the

Ministry of Finance of the Malaysian government. We would like to record

immense gratitude for the funding and the full cooperation accorded to us by

various officials of the Ministries during our research.

Acknowledgments are also due to Prof. Dr Ahamed Kameel Mydeen Meera for

iniating the Islamic Finance curriculum reviews and organized Global Round

Table Discussion (GRTD) on the curriculum reviews. The GRTD has provided the

platforms for prominent Islamic Finance scholars to give their comments and

valuable inputs to enhance the curriculums covering Islamic Finance, Islamic

Accounting, Islamic Economic, Islamic Management, and Shariah & Islamic Law

(Muamalat). Thanks are also due to Assoc. Prof. Dr. Syed Musa Alhabshi and his

team for the continuous efforts on the curriculum enhancements.

We would like to record great appreciation to Prof. Dr. Mohamed Aslam Haneef

and his team for their significant contribution in the database of talents in

Islamic Finance across all public universities in Malaysia, the Module writing

project and continuous education programs on the topic related to Islamic

Finance education.

Last but not least, our sincere thanks and gratitude to all people who have

directly and indirectly helped us in completion and publication of MIFER 2016.

May Allah SWT accept this effort as a good deed.

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ICIFE EXECUTIVE COMMITTEE

Prof. Dr. Khaliq Ahmad Expertise: Islamic Management, Business Policy & Corporate Governance, Marketing Management

Prof. Dr. Nor Hayati Ahmad

Expertise: Banking and Finance, Risk Management, Islamic banking & Finance

Prof. Dr. Mohamed Aslam Mohamed

Haneef Expertise: Islamic Economics & Contemporary Development & Islamic Thoughts

Prof. Dr. Mohd Rasid Hussin

Expertise: Risk Management, Takaful & Finance

Prof. Dr. Rosylin Mohd Yusof

Expertise: Financial Economics, Islamic Banking and Finance & Applied Econometrics

Assoc. Prof. Dr. Dzuljastri Abdul Razak

Expertise: Finance , Wealth Management & Marketing of Islamic financial services

Assoc. Prof. Dr. Rusni Hassan

Expertise: Islamic Law of Transactions, Islamic Banking & Finance

Prof. Dr. Saadiah Mohamad

Expertise: Islamic Finance, Economic policy & Banking

Assoc. Prof. Dr. Zurina Shafii

Expertise: Shariah audit, Islamic financial institutions' reporting & Halal Business

Assoc. Prof. Dr. Syed Musa Alhabshi

Expertise: Accounting & Islamic Finance

Assoc. Prof. Dr. Baharuddin Aziz

Expertise: Corporate Communication & Multimedia

Assoc. Prof. Dr. Shahida Shahimi

Expertise: Islamic Banking and Finance, Islamic Capital Market & Islamic Economics

Dr. Adam Abdullah Expertise: Islamic Banking & Finance,

Monetary Economics

Dr. Nazrol Kamil Bin Mustafa Kamil

Expertise: Islamic Finance & Banking

Dr. Haji Zulkifly Baharom Expertise: Human Resource & Management

Dr. Hamdino Hamdan Expertise: Accounting, Economics, Business & Management

xiii

LIST OF RESEARCHERS

MIFER 2016 REPORT

The following researchers were involved in the compilation of Muamalat and

Islamic Finance (MIF) enrollment, programme offered, employability, and

market assessment of MIF graduates.

Universiti Utara Malaysia (UUM)

1. DR. SELAMAH MAAMOR (Leader)

2. PROF. DR. NOR HAYATI AHMAD

3. PROF. DR. ROSYLIN MOHD YUSOF

4. DR. ROSEMALIZA AB. RASHID

5. DR. AL-HASAN AL-AIDAROS

6. DR. UMAR AHMED

7. DR. ZAIRY ZAINOL

8. MUNIRAH KASIM

9. MUHAMMAD FAKHIRIN CHE MAJID

10. NURUL NADIA ABDUL RASHID

International Islamic University Malaysia (IIUM)

ASSOC. PROF. DR. DZULJASTRI ABDUL RAZAK

Universiti Kebangsaan Malaysia(UKM)

ASSOC. PROF DR. SHAHIDA SUHAIMI

xiv

CURRICULUM DEVELOPMENT

Research on Curriculum development underwent two phases; Phase 1 from

September 2012 to August 2014 and Phase 2 from September 2014 to

September 2016.

The researchers involved in phase 1 were:

International Islamic University Malaysia (IIUM)

1. PROF. DR. AHAMED KAMEEL MYDIN MEERA

2. PROF. DR. AAHAD OSMAN GHANI

3. NURUL AFIDA BT. YUSOF

3. AZNIZA HARTINI AZRAI

The researchers involved in phase 2 were;

International Islamic University Malaysia (IIUM)

1. ASSOC. PROF. DR. SYED MUSA ALHABSHI

2. BASHER ALTARTURI

TALENT DEVELOPMENT

For Talent Development research, the team involved in database of IF talents,

IF modules and continuos educational development consisted of the following

researchers:

International Islamic University Malaysia (IIUM)

1. PROF. DR. MOHAMED ASLAM MOHAMED HANEEF

2. PROF. DR. ARIF HASAN

3. ASSOC. PROF. DR. MUSTAFA OMAR MOHAMED

4. DR. TAHA AHMAD KASULE

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RESEARCHERS FROM PARTICIPATING INSTITUTIONS

Dr. Zaemah Zainuddin UNIVERSITI UTARA MALAYSIA (UUM) Dr. Zulkufly Ramly INTERNATIONAL ISLAMIC UNIVERSITY MALAYSIA (IIUM) Assoc. Prof. Dr. Shahida Shahimi (Research Head) Dr. Suhaili Alma’amun UNIVERSITI KEBANGSAAN MALAYSIA (UKM) Dr. Norhaziah Nawai UNIVERSITI SAINS ISLAM MALAYSIA (USIM) Dr. Nor Aini Ali (Research Head) Dr. Nor ‘Azzah Kamri UNIVERSITY OF MALAYA (UM) Dr. Nor Asmat Ismail UNIVERSITI SAINS MALAYSIA (USM) Ahmad Aizuddin Hamzah UNIVERSITI MALAYSIA SABAH (UMS) Assoc. Prof. Dr. Siti Khadijah Ab Manan (Research Head) Assoc. Prof. Ezani Yaakub UNIVERITI TEKNOLOGI MARA SHAH ALAM (UiTM) Hasroleffendy Hassan (Research Head) Hasmah Laili Jamalurus UNIVERSITI TEKNOLOGI MARA KEDAH (UiTM Cawangan Kedah) Dr. Azwan Abdullah UNIVERSITI MALAYSIA KELANTAN (UMK)

xvi

Assoc. Prof. Dr. Nur Azura Sanusi (Research Head) Dr. Suhal Kusairi UNIVERSITI MALAYSIA TERENGGANU (UMT) Dr. Wan Mohd Nazri Wan Daud (Research Head) Dr. Wan Anisah Endut Dr. Jamalluddin Hashim Mohd Lotpi Mohd Yusob UNIVERSITI SULTAN ZAINAL ABIDIN (UNisZA) Nurul Wajhi Ahmad (Head Researcher) Norhanizah Johari KOLEJ UNIVERSITI ISLAM ANTARABANGSA SELANGOR (KUIS) Siti Fatimah Dato’ Wira Muhammad Nor KOLEJ UNIVERSITI INSANIAH (KUIN) Assoc. Prof. Dr. Magda Ismail Abdel Mohsin INTERNATIONAL CENTRE FOR EDUCATION IN ISLAMIC FINANCE (INCEIF)

xvii

EXECUTIVE SUMMARY

The maiden International Council of Islamic Finance Educators (ICIFE)

sponsored Malaysian Islamic Finance Education Report (MIFER) 2016. It

discloses the current scenario and challenges of Islamic Finance education in

Malaysia together with a roadmap to transform Malaysia as the global hub for

Islamic finance education. The idea for the report in the current format was

conceived by ICIFE Excos.

ICIFE is a spin off from the Entry Point Project 7 (EPP7) of the Economic

Transformation Programme (ETP) announced by YAB Prime Minister of

Malaysia in 2011. An EPP7 Task force was established in 2012 which is led by

the International Islamic University Malaysia (IIUM) and in collaboration with

other major public universities and Bank Negara Malaysia (BNM). EPP7 was

tasked to develop curriculum and talent in Islamic Finance.

MIFER 2016 covers three broad areas based on a survey of fourteen (14)

institutions namely Islamic Finance (IF) programs and employability of IF

graduates; development of a globally acceptable curriculum standard and

developing a pool of talents for IF education in Malaysia. Islamic

Currently, 89 Islamic finance programs are offered at the various Malaysian

institutions; 21 are PhD, 36 Masters, 27 Bachelors and 5 Diploma programs.

Banking and Finance programs constitute 37%, followed by Muamalat (Shariah

and Law) programs 25%, Islamic economics (20%), Islamic Management (15%)

and Islamic accounting (3%). IF graduates displayed competencies and skills

required by the market and the employers expressed satisfaction with the

graduates traits. However, there exist gaps between the graduates’ ‘knowledge

and skills’ and the industry requirements.

Malaysian Qualification Agency (MQA) standard applied restricted program

based curriculum design approach. A program structure component analysis

also indicates that there is disconnect between IF and non IF courses which

hinder interdisciplinary integration. The study suggests that for the

international curriculum standard, application of the domain based approach is

preferred, which gives more flexibility to the institutions.

MIFER forecasts a shortage of Islamic finance professionals based on the total

number of enrolments of 21,825 students against EPP7 target of 54,000

students by 2020. During the same period, Malaysian Islamic financial industry

requires a total of 56,000 strong workforces of which 4,300 new jobs in Islamic

banks alone would be created (BNM Financial Sector Blue-print (2011-2020).

xviii

In terms of IF educational talents, there are 350 Islamic finance educators

spread out in the five domainscomprising Muamalat (Syariah and Law), Islamic

Finance, Islamic Economics, Islamic Accounting and Islamic management and

abbreviated as Muamalat and Islamic Finance (MIF). 31.4% of IF educators are

in the Syariah and Law domain, 27.7% in the Banking and Finance domain,

followed by 17.4%, 14 % and 9.5% in Economics, Management and Accounting

domain respectively. The finding reveals an impotant fact, that is, more talents

are actually in shariah and law; not in Islamic finance and banking as required

by the markets.

This mismatch between the knowledge and skills transferred and the

knowledge and skills required of IF graduates calls for an immediate solution.

While the long term human resource planning and development in Universities

need a fresh attention, the short-term solution is for the educators to have

exposure to other domains than Syariah & Law. Fifteen modules are ready to

be utilized for training and to improve the knowledge and delivery skills of IF

educators. The Continuing Education Programs (CEPs) are the main focus in

2016 to.

MIFER 2016 policy direction proposals of making Malaysia, the global leader in

Islamic Finance Education require continuous support and assistance from all

stakeholders particularly the Ministry of Higher Education and MQA to facilitate

approval of new programs in the respective domains and the quality of the

educators. Coordination of long term and short term human resource planning

by Universities is essential in order for the qualifications of IF educators meet

the requirements of the discipline and the markets in the future. ICIFE will

continue to play an active role in ensuring professionalism level of Malaysian IF

educators and competitive edge of IF graduates.

xix

Islamic Finance Domains

Shariah & Islamic Law (Muamalat)

Muamalat refers to procedures or rules in the context of various forms of man-to-man relationships generally categorised as social, political and economic based on Islamic laws which emphasise fairness and social justice to all.

Islamic Finance Islamic finance refers to finance discipline incorporating Shariah principles. It covers Islamic banking, takaful, Islamic capital markets, currency markets, and risk management.

Islamic Economics Islamic Economics refers to micro and macroeconomics field based on the teaching of the Shariah. It covers Islamic economic thoughts, applied Islamic economics as well as the ability to analyse and utilize conventional economic theories and tools from Islamic perspectives.

Islamic Accounting Islamic Accounting refers to accounting and auditing theory and practices based on Shariah principles. It covers existing Islamic accounting standards and practices, Shariah auditing, zakat accounting, and social responsibility accounting.

Islamic Management/ Marketing

Islamic Management refers to management theory and practices based on the foundations of Muamalat and Islamic jurisprudence. It encompasses general principle of management, business organisation, human resource management, marketing, industrial relations, and strategic management.

Quantitative Methodology in Islamic Finance

Quantitative Methodology in Islamic Finance refers to the various methodologies and research techniques to applied in Islamic Finance studies.

1

INTRODUCTION

GENERAL BACKGROUND

The global Islamic financial industry has grown in size and geographical

coverage. Nowadays, it encompasses new jurisdictions and more institutions.

While Islamic banking remains the key pillar of Islamic finance, developments

are seen across all banking assets and beyond traditional products and services.

While the Islamic banking industry recorded a compound annual growth rate

(CAGR) of 38.5% between 2004 and 2011, the Islamic capital market recorded

a CAGR of 44.0% within the same period (IFSI stability report, 2013). One of the

biggest challenges facing the industry today is inadequate human capital. The

demand for human resources in the industry surpasses the supply due to rapid

growth rate in Islamic banking and capital market. This accentuates the role of

academic institutions in developing human capital to meet the market demand.

Academic institutions are epic centres that provide quality academic programs,

mould students and produce high quality human capital.

PROJECT EPP7 AND ISLAMIC FINANCE EDUCATION IN MALAYSIA

Although Malaysia is one of the global leaders in the Islamic finance market,

education statistics led government to realise in 2010 that the country was

lagging behind in the area of Islamic finance education. One of the identified

challenges is the lack of consensus on a standard education curriculum for

Islamic finance programs1. To address this challenge, the Malaysian

government decided to include Islamic finance education in the Economic

Transformation Programme (ETP). There are thirteen education sector Entry

Point Projects (EPPs) under the ETP, defined as projects that should generate

big results fast. Islamic finance education is listed as the seventh EPP and is

therefore commonly referred to as EPP7.

The major objective of EPP7 is to undertake initiatives for developing a

comprehensive curriculum and talent pool for Islamic finance education in

Malaysia. Achieving this objective is expected to position Malaysia as a leading

centre for Islamic Finance education with relevant resources to contribute

towards the development of a globally recognised professional certification in

this field. The EPP7 steering committee comprises Ministry of Higher Education

(MOHE) Bank Negara Malaysia (BNM) and International Islamic University

Malaysia (IIUM). In this arrangement, IIUM leads the academic initiatives while

1 Source: http://etp.pemandu.gov.my

2

Bank Negara leads the industry sector initiatives related to EPP7. To ensure

proper implementation of the academic initiatives, an EPP7 task force was

formed under the leadership of IIUM in partnership with other universities such

as Universiti Utara Malaysia (UUM), Universiti Sains Islam Malaysia (USIM),

Universiti Teknologi MARA (UiTM), and Universiti Sultan Zainal Abidin (UniSZA)

among others.

Figure 1.1: EPP7 Inauguration Ocassion

Minister of Higher Education Y. Bhg Dato’ Seri Mohamed Khaled Nordin (2nd from left), listening to the Chairman of EPP7 Task force Prof. Dr. Khaliq Ahmad. To the extreme left is the Rector of IIUM, Y. Bhg Dato Sri Prof Dr Zaleha Kamarudin and Prof. Dr. Mohd Rasid bin Hussin (2nd from right) from UUM.

EPP7 STRATEGIC STEERING COMMITTEE

Accreditation Driver: AIF/FAA

UNIVERSITIES (LEADER - IIUM) Key Players: UUM, UiTM, USIM, UKM

Chair: Ketua Setiausaha (KSU) MOHE Members: PEMANDU, MOHE, BNM, UNIVERSITIES

Bank Negara Malaysia

Curriculum Development Initiative

Task : Islamic Finance Education Task: Islamic Finance Industry

Professional recognition Driver: AIF/FAA

Talent Development Initiative

3

Initiatives Under EPP7

At the beginning of the EPP7 project, two initiatives which were identified and

incorporated in the project namely; curriculum development (initiative 1) and

talent development (initiative 2). Each of these initiatives was assigned to

produce clear deliverables at the end of the project. Below, we provide a brief

statement on the mandate of each initiative and the expected deliverables

a) Curriculum development initiative

The concern of this initiative is to develop a globally competitive curriculum

standard for Islamic finance programs from Diploma to PhD levels. Members

of this initiative set out to develop a curriculum standard that will include the

following broad areas in Islamic finance; Banking and finance, Sharia and Law,

Economics, Accounting, Management and Quantitative methods. It was also

agreed that the curriculum development exercise should compare existing

curricula from the various institutions in Malaysia, the MQA program standard

and from international sources. The expected deliverable is a comprehensive

and harmonised curriculum standard with global recognition.

b) Talent Development initiative

The rapid expansion of the Islamic finance industry has generated concerns

about the availability of competent human resources to match the global

demand. But producing competent professionals (graduates) begins with

competent lecturers (instructors), with the capacity to teach the right

knowledge. As Malaysia steps forward to position herself as a global leader in

Islamic finance education, the task of this initiative is to study and establish the

existing state of affairs with respect to Malaysia’s Islamic finance educators

(database). In addition, the initiative is to conduct a needs gap analysis and

develop modules to close the knowledge gaps of educators as well as empower

them with capacity to teach their respective courses. The deliverables of this

initiative include a database of the existing pool of talent, modules in various

areas related to Islamic finance education and number of trained educators,

through continuous education programs.

The International Council of Islamic Finance Educators (ICIFE)

ICIFE is a brain child of the EPP7 project. After one full year (2013) of intensive

EPP7 activities, it became apparent to all that upon the closure of the EPP7

project in December 2015, there will be need to continue with the work and

activities started under this project. Examples of activities that will have to

continue include; curriculum review and improvement, module development

and training of the Islamic finance educators (through CEPs), updating the

4

database of educators etc. Against this background, an idea was floated to

establish and register an independent organisation bringing together Islamic

finance educators within Malaysia and abroad. In January 2014, the

International Council of Islamic finance educators (ICIFE) was born. It is a

consequential deliverable of EPP7.

Figure 1.2: ICIFE Launced at Lanai Kijang, Bank Negara Malaysia

Figure 1.3: Promoting ICIFE to International Universities

VISION AND MISSION OF ICIFE

The vision of ICIFE is to be the premier global organisation for providing

dynamic leadership in quality assurance and enhancement of Islamic finance

education worldwide, thereby making significant contributions to the

intellectual domains of Islamic finance and other relevant fields of professional

practice. Its mission is to design and develop world class curriculum for Islamic

finance education by continuously reviewing and updating the Islamic finance

5

curriculum in order to ensure the supply of an adequate pool of competent,

knowledgeable and professional talents to cater for market needs and trends.

SCOPE AND PURPOSE OF MIFER 2016

The purpose of MIFER 2016 is to highlight the current development in the three

broad areas; programs and employability (Part One), curriculum (Part Two) and

Talent development (Part Three). Part One of the report discusses findings of a

survey on existing programs and student enrolment in Islamic finance programs

in Malaysian academic institutions. This study was initiated in 2015 and covered

eleven (11) public universities and three (3) private institutions which offer

Islamic finance programs both at the undergraduate and graduate levels. The

report gives insights about the state of affairs, showing what programs are

offered by what institutions and the enrolment in these programs. This study

also discusses the market demand in terms of stakeholders’ needs for human

resource development based on Islamic finance graduates. It also provides a

gap analysis between the demand and supply for IF graduates in Malaysia.

Part Two presents the preliminary findings from the curriculum development

initiative. The curriculum development team explain the rationale for the new

curriculum standard, the process followed in developing it and analysis of

collected information about the existing curriculum in Malaysian institutions.

Its scope covers wide academic and industry based consultations at both local

and international levels. In general, the suggested curriculum standard has

been based on a broad range of considerations such as allowing for flexibility in

designing programs, international participation which is considered crucial for

global acceptability, etc.

The third part of this report is a presentation about the current status of

Malaysia’s talent pool of Islamic finance educators. The talent initiative was

structured around three sub-projects namely; the database, module

development and continuous education programs (CEPs). This report describes

what has been done so far about each of the three sub projects. It discusses

what sub-goals have been accomplished and the emerging issues from the

current state of affairs. The survey of talent was conducted in 19 academic

institutions across Malaysia including both public and private institutions. For

this report selected findings about existing educators have been categorized

according to domains, university/institution, seniority and gender. The module

development exercise has also been explained, challenges and lessons learned

have also been discussed. 2016, is earmarked for CEPs, particularly after some

modules have been completed and printed.

6

At the end, the report discusses the overall challenges and issues arising from

the three studies. Appropriate remedies and interventions are identified and

recommendations made, especially to the Ministry of higher education (MOHE)

and other ETP monitoring and implementation agencies such as PEMANDU.

Figure 1.4: Discussion Meeting with Participating Malaysian Universities

METHODS AND PROCEDURES

This report is based on a variety of methods and procedures applied in the

process of data collection and analysis. The three sets of studies used one or a

combination of these methods to collect, verify or update the information. We

briefly describe the methods:

Online Data Search

This was applied to provide initial information to the research teams. The

research team dealing with Programs and student enrolment for example used

online search to identify which institutions offer Islamic finance programs

(which were later included in the survey). Talent development also applied

online search in a preliminary exercise of identifying the IF educators.

Focus Group Discussions

This method was applied by the talent and curriculum development teams. For

the curriculum team, it was the platform for interacting with the industry

community who provided input on the type of skills they expect from IF

graduates. Focus groups also helped the talent team to share with practitioners

on how the academician and practitioners can partner to improve the quality

of teaching IF courses.

7

Surveys

All the three research groups applied this method. Relevant institutions were

identified and survey instruments distributed to collect the data required by

each of research teams. Surveys were relied upon for provision of the most up-

to-date data from the respective institutions.

Content Analysis

This method was specifically relevant to the curriculum development team.

Existing documents such as the Malaysian Quality Standards (MQA) documents

were studied and analysed by this research group. This helped the research

team to identify its own course in developing the global standard, without

necessarily duplicating the Malaysian standard.

Round Table Discussion

The curriculum development team convened a global round table discussion

(GRTD) in August 2014 and another one in 2015. These forums brought

together international academics in the various domains of Islamic finance

education. It was intended to consult international experts and obtain their

input on the draft curriculum enhancements that were being cooperated. In

general, the study groups did their best to obtain correct and accurate

information, through application of a combination of the above methods. The

findings presented in this report are therefore based on carefully collected and

verified information, with a high degree of validity.

Figure 1.5: Collaboration Network – ICIFE and International Participant Members

8

PART ONE: PROGRAMS AND EMPLOYABILITY

RESEARCH BACKGROUND

Islamic finance education remains an important agenda incorporated in the

10th Malaysia Plan in an effort towards making Malaysia as an International

Islamic financial education hub. As at 2015, Malaysia is the second largest

Islamic finance education provider in the world and ranked the first in terms of

providing trainings and professional courses in Islamic Finance. Concurrently,

Malaysia is focusing on capacity building including the human resource

development and quality education to provide Islamic Finance talents locally

and abroad. Hence, a more comprehensive analysis was done to critically re-

define Islamic Finance education into five domains that is Muamalat (Syariah

and Law), Islamic Finance, Islamic Economics, Islamic Accounting and Islamic

management and abbreviated as Muamalat and Islamic Finance (MIF). The

analysis also reveals that as at January 2014, the information and statistics on

the supply and demand of MIF education programs and graduates available at

the websites of respective universities and relevant agencies remain

inconclusive. This poses constraints to policy makers in planning, designing, and

implementing decisions to place Malaysia as a leading Islamic finance education

hub in the world.

MIFER (2015) is a maiden, comprehensive report on MIF education in Malaysia

highlighting several key issues based on corroborated data. First, it is based on

data gathered directly from all higher learning institutions (i.e. public and

private) which provide accurate and most up to date information on MIF.

Second, its respondents consist of representatives from the industry players,

policy makers, and the universities offering MIF programs. Besides the survey

method, round table dialogue and focus group discussions were conducted to

provide an in-depth analysis on the gaps between the skills acquired by MIF

graduates and the market expectations. Finally, this report offers policy

recommendations to enhance the quality of MIF programs and the graduates

to meet the demand of the market and at the same time, achieve the national

aspiration to become a leading Islamic finance education hub.

PROGRAM

To date, there is a total of 89 Muamalat and Islamic Finance (MIF) programs

offered by all public universities in Malaysia and 3 selected private higher

education institutions in Malaysia. The majority of the programs (75 programs)

are offered by 11 public universities and 14 of the programs are offered by the

3 selected private higher education institutions. The private higher education

9

institutions involved in this research are INCEIF, KUIS, and KUIN. UM offers the

highest number of programs (27 programs). Based on the programs offered,

Islamic finance domain has the most number of programs (33) compared to

other domains and accordingly, the students' enrolment and graduation in this

domain record the highest number within the MIF program.

The institutions covered in the study include Institutions offering MIF programs

at all education levels (Diploma, Bachelor Degree, Master, and PhD). Master

degree programs are the most popular with 44.22% of the total programs

offered in Malaysia. This is followed by Bachelor Degree programs (27.37%) and

PhD programs (23.16%). Most of the Islamic management and Islamic

economics programs are offered at the Master and PhD levels. The selected

private higher education institutions do not offer any master by research and

they mostly offer Islamic finance programs.

A total of 196 MIF graduates working in various sectors were asked about their

skills and competencies. The MIF graduates include holders of PhD, masters and

bachelor degrees in the five domains; namely, Muamalat, Islamic finance,

Islamic economics, Islamic management and accounting. The skills measured

consist of interpersonal skills, computing skills, entrepreneurial skills, and

communication skills, thinking skills, managerial skills and language proficiency.

The result reveals that overall, MIF respondents scored above average on all

skills and competencies they have acquired upon their graduations with mean

scores of 5.14 with exception of low proficiency in Arabic language. In other

words, on average, MIF graduates are similar to other graduates in other

disciplines, of which they are equipped with employability skills and

competencies that the job market requires.

The report further surveyed the employers perception on MIF graduates

employability skills and competencies. A total of 33 respondents from public

sector, private and non-profit sectors in Malaysia participated in the survey.

The findings reveal that on average, employers are satisfied with MIF graduates

employability skills and competencies. Moreover, the respondents perceived

that interpersonal skill and personal grooming are the most important qualities

the employers look for in MIF graduates. In addition, the respondents

(employers) perceived that public universities produce higher quality MIF

graduates compared to local private universities. Accordingly, majority of the

respondents assert that their companies prefer to hire MIF graduates from

public universities compared to private higher education institutions.

Gap analysis was also conducted to assess the demand side and supply side of

the MIF graduates. Overall, the results indicate that although, the MIF

graduates on average possess the skills and competencies the market requires,

10

but their skills and competencies are still below the market expectation.

Therefore, MIF graduates need to improve in enterprise and entrepreneurial

skills, thinking skills, managerial skills and proficiency in English and Arabic

languages. More importantly, the report forecasts the shortage of Islamic

finance professionals. Currently, the total number of enrolments in MIF

programs from 14 public universities and 3 private higher learning institutions

is 21,825 students; EPP7 expects the number to increase to 54,000 students by

2020. Furthermore, according to BNM Financial Sector Blue-print 2011-2020,

Malaysian Islamic financial industry would need a total of 56,000 strong

workforces by 2020 and 4,300 new jobs is expected to be created in Islamic

banks in 2020. In addition, there seems to be some imbalances in terms of

programs offered by the universities. Nine out of 14 universities focus mainly

on Islamic finance program, two universities offer Islamic economics, and two

universities offer Shariah and Law. Only one university offers Islamic

management and non-of the universities studied offer Islamic accounting as a

program. Hence, universities need to offer more programs in order to increase

the number MIF graduates in Islamic accounting, Islamic economics and Islamic

management.

In summary, the report suggests that Ministry of Education and MQA need to

facilitate the approval of new programs in Islamic accounting, Islamic

economics and Islamic management. Universities that offer MIF programs

should also diversify their programs based on the five domains. The authorities

concern should design a policy that will ensure that students’ enrolments are

balanced in all the five domains to achieve the government target of 54,000

MIF students in 2020. It is also recommended that universities adopt a more

pro-active approach, where industry practitioners are also involved in the

teaching and learning method at the universities and for the universities, more

community based assignments and marketing knowledge should be

incorporated into curriculum. There should be more strategic collaborations

among universities offering MIF programs and the Islamic finance industry. This

will further ensure the universities are in fact producing graduates that fulfil the

market requirements and demand. Last but not least, universities should also

create their niche areas based on the five domains where they will be an

authority and source of reference in that particular program recognized

nationally as well as at the international level.

EMPLOYABILITY

Employability is defined as the ability of an individual to secure and sustain

employment and progress within the workplace (Belt et al. 2010). Basic literacy

and numeracy skills; organisational skills (such as team working); individual

11

personality traits and capacities (such as optimism, interpersonal skills, and

hardworking); socialised and formally-learned capacities (such as problem-

solving and communication skills); the knowledge, technical and academic skills

related to particular qualifications, are proxy indicators of employability skills

that the labour market demand (Atfield & Purcell, 2012).

According to Mason et al. (2006), as number of graduates from higher

education increases in the labour market, the demand for employability skills

that students learn during their time in universities and colleges also increases.

Thus, there has been increasing interest in the development of ‘employability

skills’ (HEFCE, 2010).

Much has been written on issues surrounding human capital across the global

Islamic finance industry typically highlighting the shortage in talent. One stark

problem is the mismatch between the industry itself on one side and academic

institutions and students on the other side. Upon graduation, students find

themselves in a predicament when they apply for Islamic finance jobs on the

basis that they do not meet the requirements for these positions for various

reasons (IFN,2015), that include lack of employability skills.

Various attempts have been made to establish skills which are most sought-

after by employers and the most useful for graduates. Stewart and Knowles

(2000) identified key skills that are required in almost any job. Those are basic

literacy and numeracy, the ability to work well with others, communication

skills, self-motivation, the ability to organise one’s work, a basic capability to

use IT, dedication and commitment. Other authors have modified this list of

skills to include business and customer awareness and problem solving (CBI,

2008).

It is also projected that by 2020, the global total market demand for Islamic

finance professionals will be more than 200,000 and Malaysia aspires to

contribute MIF talents to this manpower requirement (MIFC, 2015). Presently,

more academic institutions in Malaysia are offering programs in Islamic

economics and finance, more students are enrolled in these programs and

these institutions are complying MQA and ICIFE domains (Shariah and Law,

Islamic Finance, Islamic Economics, Islamic Accounting, and Islamic

Management).

In line with this Islamic Finance also targeted to contribute 11% of total

employment to the Islamic Financial Services Industry (FSI) worldwide, with an

estimation of one (1) million professionals by 2020 (MIFC, 2013). All these

targets are to fulfil the demand for Muslim countries which have a total Muslim

population of 1.6 billion (Global Religious Landscape, 2012).

12

According to BNM Financial Sector Blue-print 2011-2020, Malaysian Islamic

financial industry would need a total of 56,000 of strong workforce by 2020.

Similarly, Indonesia estimated that it would need 17,000 additional

practitioners within the next three years, while the United Arab Emirates (UAE)

projected about 8,000 new employees will be needed for 2015 just for Dubai

alone, as it moves forward to establish itself as the world’s leading Islamic

economic hub (Islamic Finance News, 2015).

The shortage of human resources in the Islamic finance industry lies on the fact

that the industry is dominated by practitioners who are 90% trained and

experienced in conventional finance industry with only a 10% knowledge of

Islamic finance (Islamic Finance News, 2015). The industry resorts to hire

conventional bankers and other financial professionals due to the limited

supply of qualified and competent Islamic finance professionals. The market

assumes that Islamic bankers must have sufficient knowledge of conventional

banking processes and systems in addition to Islamic finance acquired skills and

knowledge (FGD, 2015). Islamic financial professionals need to have the

necessary employability skills as there are market requirements for the jobs in

area of MIF. MIF refers to the five main domains in Muamalat and Islamic

Finance as suggested by MQA. The domains are Shariah and Law, Islamic

Finance, Islamic Economics, Islamic Accounting, and Islamic Management. The

definition of each domain is provided in the glossary.

RESEARCH ON PROGRAM AND EMPLOYABILITY

This study focuses on three areas that include: (i) programs offered (only for

diploma, bachelor degree, master and PhD); (ii) market orientation; and (iii)

students enrolment. The novelty of this study is the identification of the

strengths and the weakness of Islamic finance education programs in Malaysia.

This will assist Malaysia to build its competitive edge in MIF education and

attract pool of students across the globe to Malaysia. Specifically, the study

questions were as follows;

1. Which domains have the largest gaps in terms of supply?

2. What will be the demand for Islamic finance graduates by domain/skills

within the next 5 years?

3. What are the skill gaps of Islamic finance graduates?

4. What is the implementation plan to close the gaps?

13

RESEARCH OBJECTIVES

The main objective of this study is to draft a comprehensive report on Islamic

finance education in Malaysia. This study will focus on three (3) main items

which include, the programs offered, market orientation of the programs and

students enrolment. Specifically, the objectives of this study are listed below:

1. To analyse the students’ intake, students graduated by programs/ICIFE

domains and by universities over 2010-2014 periods.

2. To assess the market demand in terms of stakeholder’s needs towards

human resource development of Islamic Finance graduates.

3. To conduct the gap analysis between the demand side and supply side

of the Islamic finance graduates by the 5 domains.

4. To recommend an implementation plan to close the gap based on the

ICIFE domains and the potential role of ICIFE.

RESEARCH METHODOLOGY

The report is based on a combination of quantitative and qualitative method,

where the data has been collected from both the primary and secondary

sources. Subjective judgments and best estimations are used wherever data is

not complete or unavailable. Quantitative data has been collected from survey

and publicly available sources. Secondary data is collected through

representatives from each institution. The representatives of the institutions

were appointed as researcher of this research to ensure the information

gathered is reliable. Some other data and information were collected through

web based search such as from institutions’ websites, news and information

services, directories, press releases, and published interviews to achieve the

research objectives. The representatives were guided to collect all information

related to MIF programs offered in their institution by providing them with a

special template to be filled in. The information needed to gather is the

institution’s programs, students’ enrolment and graduates as well as list of

alumni.

Data analysis is based on the ICIFE 5 domains and the programs offered by

Islamic Finance Education and Knowledge Services Providers (IFEKSP). The ICIFE

5 domains consists of Syariah and Law (Muamalat), Islamic Finance, Islamic

Economics, Islamic Accounting and Islamic Management. For the purpose of

this research, IFEKSP is defined as institutions which provide one or more

programs in ‘Muamalat and Islamic Finance (MIF)’ relating to these 5 domains.

The programs in this study refer to diploma, bachelors, masters, and PhD

programs. In addition, two kind of survey have been conducted to investigate

14

graduates’ performance and marketability (demand and supply) of Muamalat

and Islamic finance students. Questionnaires were distributed to graduates to

assess their background, qualification, expertise, performance and suitability of

the programs offered by IFEKSP members in Malaysia for the year 2014. In

order to examine the marketability of the graduates, questionnaires were

distributed to stakeholders which include government, semi-government and

private sectors to assess the knowledge and competencies of Malaysia

graduates, industry demand, skills that are needed to be enhanced, industry

forecast, and key skills according to ones demanded by the industry players.

Table 2.1: Components of Questionnaire for Graduates and Company

QA GRADUATES QA COMPANY

Part 1: Demographic Information Part 1: Demographic Information

Part 2: Graduates acquired skills & abilities

Part 2: The Importance of Skills Required

Part 3: Graduate Competency Part 3: Opinions of Differences among Colleges & Universities

Part 4: Perception toward Muamalat & Islamic Finance Programme

Part 4: Perception on the Quality of College/University Graduates and Final comment

Table 2.1 gives a breakdown of the components of the questionnaire for

graduates and industry players. There are four components for each

questionnaire. Table 2.2 shows the number of items of skills which are related

to questionnaire in Part II for graduates and companies. The selection of these

items are consistent with the ones employed by Rosmawati Mamat (2000),

Rafikul et al (2012), Khalid et al (2014), Hodges & Burchell (2003), Alberta

Learning (2002) and D. Maes et al (1997). The survey was conducted through

face-to-face interview, emails and mail. Most of the questionnaires were

collected through face-to-face interview.

Table 2.2: Number of Items for Skills

No Skill Number of item

1 Interpersonal Skills 8

2 Computing Skills 7

3 Enterprise & Entrepreneur Skills 4

4 Communication Skills 11

5 Thinking Skills 8

6 Management Skills 10

Table 2.3: List of MIFER-FGR Panelists

No. Representative/Participant

1 Internal Audit Committee, Koperasi Bank Persatuan Malaysia Berhad

15

2 Banking Service Manager, Bank Islam Malaysia Berhad

3 Pengurus Cawangan, Bank Rakyat

4 Deputy Head, MCRC Northern Region (Kedah/Perlis)

5 Timbalan Setiausaha, Jabatan Zakat Negeri Kedah

6 Pen Juruaudit, Masjlis Agama Islam Negeri Kedah

7 Alumni UUM

8 Alumni UiTM

9 Alumni UniSZA

10 Alumni IIUM

To further substantiate the findings of this study, researchers also have

conducted a focus group discussion involving program providers and

stakeholders. The focus group discussion (FGD) was held on 3rd December 2015

at TH Hotel & Convention Centre, Alor Setar. This FGD was conducted to gather

information and opinions expressed directly by industry players and alumni of

MIF graduates. The list of panellists is shown in Table 2.3.

MUAMALAT & ISLAMIC FINANCE (MIF) PROGRAMS OFFERED IN MALAYSIA

This section elaborates the findings on the MIF programs offered in Malaysia.

The results are shown in diagrams and tables for better understanding. All

information and data are gathered from representatives of each institution. In

Malaysia, programs offered can be categorized into two major categories which

are undergraduate (UG) programs (diploma and bachelor degree) and

postgraduate (PG) program (Master and PhD levels).

In this study, there are 32 UG programs which are offered by 10 public

universities and 2 private higher education institutions (KUIS and KUIN). KUIS

and UiTM offer the highest number (5) of UG program. The details of the

program can be referred to the appendix. This present study also covers (5)

diploma level programs and (27) programs at bachelor level. For instance,

Bachelor of Muamalat (Hons) is categorised as stand-alone while Bachelor of

Business Administration (IBF) is categorised as a specialization program.

Meanwhile for programs offered by USIM, such as Bachelor of Accounting

(Hons), despite not carrying the title “Islamic”, they are categorised as MIF

programs because the programs offered at USIM are all considered to be

Shariah based programs.

Figure 2.1: Number of UG Programs offered by Institutions

16

Figure 2.2: Number of UG Programs Based on ICIFE Domains (MIF)

Based on Figure 2.2, the Islamic finance domain has the highest number of

programs (17), followed by Muamalat (Syariah & Law) (7). The majority of the

institutions offer undergraduate MIF programs as a stand-alone approach (18)

and specialization approach (14) - Please refer to Table 2.4. With regards to the

approach adopted, as shown in Table 2.4, Most Muamalat (5) and Islamic

finance (9) programs offer stand-alone approach. Table 2.5 below also indicates

that, Islamic finance and Muamalat domains are mostly offered at the

undergraduate level.

Table 2.4: ICIFE Domains Based on Approaches

Domain Stand Alone Approach

Specialisation Approach

Total

Muamalat (Syariah & Law)

5 2 7

Islamic Finance 9 8 17

Islamic Economics 0 3 3

Islamic Accounting 1 1 2

Islamic Management 3 0 3

TOTAL 18 14 32

Table 2.5: Levels of Program based on ICIFE Domains

Domain Diploma Degree Total

5 5

4 4

3

2 2 2 2

1 1 1

0

1

2

3

4

5

6

17

7

3 3 2

0

5

10

15

20

Islamic Finance Muamalat(Syariah & Law)

IslamicManagement

IslamicEconomics

IslamicAccounting

17

Muamalat (Syariah & Law) 1 6 7

Islamic Finance 3 14 17

Islamic Economics 0 3 3

Islamic Accounting 0 2 2

Islamic Management 1 2 3

TOTAL 5 27 32

In terms of postgraduate programs and specializations, there are 57 PG

programs which are offered by 9 public universities and 2 private higher

education institutions (INCEIF and KUIN). UM offers the highest number (13) of

PG Specialization. The details of the PG specialization offered by those

institutions can be referred to the appendix. This study also covers 35 areas of

specialization at master level (19 Master by coursework, 16 Master by research)

and 21 areas of specialization at PhD level. As for the domain, Islamic Finance

specialization ranks the highest (16) followed by Muamalat (Syariah & Law) and

Islamic Economics (15 each domain).

As illustrated in Table 2.6, at Master (By Coursework and Mixed Mode) level,

Islamic finance is to be the most preferred program compared to other

domains. While, at Master by research level and PhD level, Islamic economics

is to be the most offered domain by the institutions.

Figure 2.3: Number of PG Programs (Specialization) by Institutions

Figure 2.4: Number of PG (Specializations) Based on Domains

1311

98

43 3

2 21 1

0

5

10

15

UM UKM UUM IIUM USIM INCEIF USM KUIN UMT UMS UiTM

16 15 15

10

1

0

5

10

15

20

Islamic Finance Muamalat(Syariah & Law)

IslamicEconomics

IslamicManagement

IslamicAccounting

18

Table 2.6: ICIFE Domains Based on Level

Domain Master (Coursework or Mixed Modes)

Master (Research)

Ph.D Total

Muamalat (Syariah & Law)

5 4 6 15

Islamic Finance 8 4 4 16

Islamic Economics 3 5 7 15

Islamic Accounting 1 0 0 1

Islamic Management 2 4 4 10

DEMAND AND SUPPLY OF MIF GRADUATES

A survey was conducted whereby 196 MIF graduates participated in the study.

The graduates were asked a series of questions on their skills and competencies

and whether they have developed these skills through the programs that they

have undergone. They were also asked on the expected skills and competencies

that the potential employers require. This research attempts to investigate and

establish whether the MIF graduates acquire the necessary skills that the

market requires. The skills measured consist of interpersonal, computing,

entrepreneurial, communication, thinking and managerial skills as well as

language proficiency.

This next section will analyse all the findings related to the survey conducted

on the graduates and employers. The deliberation is based on background,

gender, education level, employment, salary and highest education level

achieved.

Background of the MIF Graduates

This section presents the background of the MIF respondents in order to gain

an insight into the respondents’ perceptions on their employability skills and

prospect of job market.

The majority of the respondents are female (67%) and only 33% are male. The

majority of respondents are bachelor degree holders (74%). Majority of the

male respondents are bachelor degree holders (47), 11 are master degree

holders and only 6 are PhD holders. Meanwhile, 98 female respondents are

bachelor degree holders, 25 are master degree holders, 4 PhD holders and only

5 of the female respondents are diploma holders. Please refer to Figure 2.5 and

2.6 as well as Table 2.7.

19

Figure 2.5: MIF Graduates Respondents by Gender

Figure 2.6: MIF Graduates Respondents by Educational Level

Figure 2.7: MIF Graduates Respondents Based on Employment in Job Sectors

Table 2.7: MIF Graduates Gender Based on Highest Qualification Level Achieved

Highest Qualification Level

Gender Diploma Bachelor Degree

Master Degree

PhD Total

Male 0 47 11 6 64

Female 5 98 25 4 132

Total 5 145 36 10 196

Table 2.8 MIF Graduates Gender Based on Employment in Job Sectors

Job Sectors

Gender Public Private Non-Profit Total

Male 23 25 2 50

Female 43 59 2 104

Total 66 84 4 154

Diploma3%

Bachelor74%

Master18%

PhD5%

MALE, 64, 33%

FEMALE, 132, 67%

PUBLIC 43%

PRIVATE54%

NON-PROFIT3%

20

Table 2.9 Highest Qualification Level Achieved by MIF Graduates based on

Employment in Job Sectors

Job Sectors

Highest Qualification Level

Public Private Non-Profit Total

Diploma 2 0 0 2

Bachelor Degree 35 73 4 112

Master Degree 19 11 0 30

PhD 10 0 0 10

Total 66 84 4 154

More than half of the MIF graduates respondents are working in private sector

(54%) and 43% of these respondents are working in public sector. Moreover,

only 3 % are working in non-profit sector. (Refer Figure 2.7). As shown in Table

2.8, the number of male respondents working in both public and private sectors

are nearly equal, 23 and 25 respectively. However, based on Table 2.8, only two

male respondents are working in non-profit sector. Majority of the female

respondents are working in private sector (59), 43 are public sector employees

and only two respondents are non-profit sector employees. Most of the master

degree holders (11) and PhD holders (10) are employed in the public sectors.

However, the majority of the bachelor degree holders (73) are employed in the

private sector. Two diploma holders are employed in public sector and others

are employed in non-profit sector.

Figure 2.8: MIF Graduates Respondents Based on Salaries Earned

Table 2.10 MIF Graduates by Gender Based on Salaries Earned

Salary

Gender RM1,500-RM5,000 RM5,001-RM10,000 Total

Male 38 14 52

Female 99 4 103

Total 137 18 155

RM1,500-RM5,000, Total,

137

RM5,001-RM10,000, Total,

18

RM1,500-RM5,000

RM5,001-RM10,000

Salaries Earned by MIF Graduates

88%

12%

21

Table 2.11 Highest Qualification Level of MIF Graduates Based on Salaries Earned Salary

Highest Qualification RM1,500-RM5,000 RM5,001-RM10,000 Total

Diploma 1 0 1

Bachelor Degree 107 6 113

Master Degree 28 3 31

Ph.D. 1 9 10

Total 137 18 155

Table 2.12 Job Sectors of MIF Graduates Based on Salaries Earned

Salary

Job Sector RM1,500-RM5,000 RM5,001-RM10,000 Total

Public 51 12 63

Private 76 5 81

Non-Profit 3 1 4

Total 130 18 148

88% of the respondents (137 graduates) earned monthly income between

RM1500–RM5000 whereas 12% (18 graduates) of the respondents earn

monthly income of between RM5001–RM10000 (Refer Figure 2.8). Male

respondents earn higher than female respondents. 14 of the male respondents

earn monthly income between RM5001–RM10000 compared to 12 female

respondents monthly income in the same category. Majority of the female

respondents (99 graduates)are found to earn monthly income between

RM1500–RM5000. Although salaries are paid based on qualifications, this

practice is not reflected in the case of the MIF respondents. Majority of the

respondents include 107 bachelor degree holders, 28 master degree holders

and one PhD holder earn monthly income between RM5001–RM10000. Only

six bachelor degree holders and three master degree holders earn monthly

income between RM5001–RM10000. Moreover, most of the high-income

earners (12) are employed in public sector compared to only five in private

sector. Majority of the respondents (76 graduates) who earn between

RM1500–RM5000 are employed in the private sector compared to 51

respondents employed in public sector (Table 2.10 to 2.12).

82% of the respondents have undergone internship programs and only 18% of

the respondents have not undergone internship during their study(Figure 2.9).

Almost all of the respondents (97.8%) perceived that internship program is

beneficial as they were exposed to practical aspects of job market. The

internship program for most of the respondents (71%) is between 4 months to

6 months. However, only 1% of the respondents have their internship programs

for at least two years (Figure 2.10).

22

Figure 2.9: Number of MIF Graduates Who Have Undergone Internship Programs

Figure 2.10: Duration of Internship

Demand for Muamalat and Islamic Finance (MIF) Graduates

It is well established that there is currently a shortage of human capital in

Islamic finance. Evidently, the Islamic capital market was revealed to be the

most affected sector with an identified shortage of 88%, followed by Takaful at

63% and banking at 50% (IFN, 2015). On the asset management side, the

Thomson Reuters Global Islamic Asset Management Outlook 2015 highlighted

that Islamic wealth management is expected to pick up speed in the Middle

East and one of the challenges identified is the lack of talent development and

market awareness.

Based on MIFC (2013) report, Islamic Finance graduates consisted 11% of the

total workforce in Islamic financial service industry worldwide. This reflected

the shortage of Islamic Finance talents. According to IFN (2015) the main

reasons for talent shortages in Islamic finance mainly due to the lack of

technical and Shariah knowledge; as well as more ‘generic’ skills such as

0

20

40

60

80

100

Yes No Yes No

Undergo Internship Internship Benefit

82

18

97.8

2.2

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

1 to 3months

4 to 6months

7 to 9months

10 to 12months

24 months

17.10%

71.40%

2.90%7.90%

0.70%

23

product innovation and strategic planning. It is estimated that one million

professional in Islamic Finance will be required by 2020.

MIFER conducted a survey to examine the employability skills of MIF graduates.

The MIF graduates include holders of PhD, masters and bachelor degrees in the

five domains, namely, Muamalat, Islamic finance, Islamic economics, Islamic

management and accounting. A total of 33 respondents from public sector,

private and non-profit sectors in Malaysia participated in the survey. Majority

of the respondents (70%) are male and only 30% are female. The survey covered

wide range of issues related to MIF graduates that include employability skills,

employers’ preferences on the institutions of higher learning, and quality of

Islamic finance graduates.

Figure 2.11: Nature of Business of the Employer Respondents

Based on Figure 2.11, most of the respondents are working at education

resources institutions (40%), followed by financial services (24%), and public

services (15%).

Employers are asked to rate the MIF graduates’ skills that should be acquired

based on the given scale. The graduates skills were measured based on a five-

point Likert-type scale (e.g. from 1- 2.19 = poor to 5.80 – 7.00 = excellent). The

results are presented based on response from the employers( refer to Table

2.13 and Figure 2.12).

Figure 2.12 reveals that on average, employers have high demands (indicated

by higher mean value) from MIF graduates’ on skills such as communication

skills (5.75), thinking skills (5.77), and managerial skills (5.82). While other skills

are important , these three skills are the most required skills by the financial

market for MIF graduates.

The research also reported and interesting finding in term of language skilss

whereby the employers prefer the MIF graduates to have high proficiency in

Education Resources, 40%

Financial Services, 24%

Public Services, 15%

Consumers Products, 6%

Logistic Service Providers, 6%

Wholesale Distribution, 3%

Others, 6%

24

Arabic language. The current findings shows that, MIF graduates scored a mean

value of 4.28 which is in the average category. This implies that MIF graduates

should master Arabic language in addition to Malay and English language.

Package 1 refers to all the nine skills as highlighted in figure 2.12 while Package

2 refers to those skills excluding language proficiency. The mean score of 5.61

and 5.66 of Package 1 and Package 2 respectively suggest that on overall, the

MIF graduates acquired skills score above average on all types of skills and with

excellence in Malay Language and English language proficiency.

Figure 2.12: Skills and Competencies of MIF Graduates Expected by Employers

Table 2.13: Measurement Scale for Skills and Competencies (with reference to Figure 2.12)

Range Indicators

1.00 – 2.19 Poor

2.20 – 3.39 Below Average

3.40 – 4.59 Average

4.60 – 5.79 Above Average

5.80 – 7.00 Excellent

Supply of MIF Graduates

This section presents findings on students’ enrolment and graduation from MIF

undergraduate programs.Figure 2.13 indicates an increasing trend of MIF

students enrolment and graduates which is in tandem with the rapid growth of

Islamic finance market.

Figure 2.13: Trend of MIF Students Enrolment and Graduates

Series1, Interpersonal,

5.65Series1,

Computing, 5.49

Series1, Enterprise, 5.56

Series1, Communication,

5.75

Series1, Thinking, 5.77

Series1, Managerial, 5.82

Series1, Malay Language, 6.13

Series1, English, 6.17

Series1, Arabic, 4.28

Series1, Package 1, 5.61

Series1, Package 2, 5.66

25

Figure 2.14: Undergraduate Students Enrolment (1999-2015)

This study finds that Malaysia has over 16,900 students enrolled at the diploma

and bachelor levels in MIF programs based on data gathered till 2014 from all

public universities and three private higher education institutions. Based on

offering institutions, USIM has the highest number of students enrolled (2,968)

in the MIF programs at undergraduate level followed by UiTM (2,927 students)

has shown Figure 2.14. It is interesting to note as shown in figure 2.15 that

Islamic finance program has the largest number of students enrol amounting to

9,951 students over 1999-2015 period. These results however, need to be

interpreted with caution as most of the institutions in the analysis could only

provide the most recent reports starting only from the year 1999 and in fact,

some of the institutions can only provide data starting from 2012 and 2014.

As evidenced in Figure 2.16, over 7,600 students graduated at diploma and

bachelor level from MIF programs. Based on institutions (Figure 2.17), USIM has

the highest number of students graduated (1,520) from MIF programs at

undergraduate level followed by UiTM (1,359 students). These statictics are as

at end of 2014.

Figure 2.15: Undergraduate Students Enrolment Based on Domains (1999-2015)

0

1000

2000

3000

4000

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

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99

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00

20

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EnrollAll GraduateAll

2968 2927

2192

16991369 1307 1195

1035 975595 584

560

500

1000

1500

2000

2500

3000

3500

USIM UiTM KUIS UUM KUIN IIUM INISZA UKM UMS UMK UM USM

26

Based on Figure 2.18, Islamic finance domain produced the largest number of

graduates (2,982) compared to the remaining four domains. The next domain

with the sicomg largest number of graduate is Islamic economics. This implies

that universities have been able to supply talents in Islamic finance domain to

industry as well as other relevant agencies.

Figure 2.16: MIF Graduates Graduated Based on Domains (1999 -2015)

Figure 2.17: MIF Graduates According to Institutions (2000-2014)

Figure 2.18: MIF Graduates Based on Program Domains (1999-2015)

9951

4130

1277

807

737

0 2000 4000 6000 8000 10000 12000

Islamic Finance

Muamalat (Syariah & Law)

Islamic Accounting

Islamic Management

Islamic Economics

2982

1889

1486

1113

163

0 500 1000 1500 2000 2500 3000 3500

Islamic Finance

Islamic Economics

Muamalat (Syariah & Law)

Islamic Management

Islamic Accounting

15201359

1113 1048

721532

415 357 320 248

0

500

1000

1500

2000

USIM UiTM UUM KUIS IIUM UMS UM INISZA UKM KUIN

27

Note: Islamic Accounting graduates are solely from USIM.

MIF Graduates Respondents Acquired Skills and Competencies

MIF graduates respondents are asked to rate the skills and competencies they

have acquired upon their graduation. The graduates skills and competencies

are measured based on a five-point Likert-type scale (e.g. from 1-2.19 = poor to

5.80–7.00 = excellent) and the results are presented in the form of descriptive

statistics.

Figure 2.19 results show that the majority of the respondents scored

above average on interpersonal skills (Mean=5.29); computing skills

(Mean=5.16); enterprise and entrepreneurial skills (Mean=4.99);

communication skills (Mean=5.26); thinking skills (Mean=5.19); and managerial

skills (Mean=5.30). They have scored excellent in Malay language proficiency

(Mean=6.48) and above average in English language (Mean=5.11). However,

the graduates proficiency in Arabic are average (Mean=3.18). Moreover, the

MIF respondents perceived that they are competent with score above average

(Mean= 5.47). Overall, MIF respondents scored above average on all skills and

competencies they have acquired upon their graduations with mean scores of

5.14 and the mean score is 5.23 with exception of languages skills.

In other words, the findings reveal that MIF graduates are equipped with

employability skills and competencies that the job market requires. On average

MIF graduates have interpersonal skills as they are able to relate to others

feelings and emotion, they are able to inspire and motivate others, and can

effectively manage their colleagues and superiors. The graduates also have

expertise in computing skills; as most of the graduates are able to use statistical

software packages, search and manage data, effectively use spread sheet for

data analysis and deliver effective presentations using computer aided

software. In addition, the graduates have entrepreneurial skills; as on average

they are able to develop business plan, identify business opportunities and take

advantages of any business opportunities. Interestingly, the findings show that

the graduates possess communication skills as most of them claim that that

2982

1889

1486

1113

163

0 500 1000 1500 2000 2500 3000 3500

Islamic Finance

Islamic Economics

Muamalat (Syariah & Law)

Islamic Management

Islamic Accounting

28

they are able to present case study and projects effectively, they can listen and

provide constructive feedbacks, they are good negotiators and that they can

communicate formally or informally with people from different backgrounds.

Figure 2.19 Statistics of Skills and Competencies Acquired by MIF Graduates

In addition, the findings also reveal that MIF graduates possessed thinking skills;

as the majority of graduates are able to explain, analyse and evaluate data and

make logical conclusion. They also can think critically, understand both the

statistical and numerical data. The graduates also have managerial skills; as

they are able to plan, coordinate and organize project, work independently,

effectively supervise others and implement the action plan. In addition, on

average MIF respondents are competent; as they are able and willing to learn,

passionate, flexible, good in problem solving and goal oriented. The

respondents are good initiators, master their job, meticulous and they can

deliver if they are given a task. Last but not least, in relation to language

proficiency, MIF respondents are excellent in Malay Language, performing

above average in English and average in Arabic language.

Employers’ Perceptions on Quality of MIF Graduates

In relation to quality of MIF graduates, the research attempts to ascertain the

following issues; (1) whether the employers perceived any differences in quality

between MIF graduates of public and those of private universities; (2) whether

they prefer to hire public universities graduates to private universities

graduates; (3) whether they prefer foreign students’ graduates to local

graduates. The findings reveal that majority of the respondents (69%) agree

that the quality of local public universities MIF graduates are different from

private universities’ graduates while 31% perceived no differences in quality

between graduates of both public and private universities. In particular, the

most important quality that they look for in MIF graduates is interpersonal skills

(70%) followed by appearance or personal grooming (15%) and other factors

(15%). In summary, public universities are perceived to produce higher quality

Muamalat and Islamic finance graduates compared to local private universities.

5.29 5.16 4.99 5.26 5.19 5.306.48

5.11

3.18

5.47 5.14 5.23

0.001.002.003.004.005.006.007.00

29

Interestingly, majority of the respondents (62%) perceived no differences in

quality between local and MIF graduates from universities abroad while 38%

perceived that there exist differences in terms of the quality of the MIF

graduates. Majority of the respondents (69%) argue that their companies

prefer to hire MIF graduates from particular colleges/universities. MIF

graduates from public universities and higher education institutions are highly

preferred (67%), international universities (28%) and private universities (5%).

Hence, it is a point to note that 33% (28% International universities and 5 %

private uiversities) of the respondents prefer to hire Muamalat and Islamic

finance graduates from private and foreign universities.

Feedback from Employers

This section discussses the recommendations to program providers in order to

improve the quality of Muamalat and Islamic Finance (MIF) graduates.

Employers are asked to provide their recommendations on how higher

education institutions can enhance the employability of Muamalat and Islamic

finance graduates.

Among the recommendations provided is that the universities should improve

the students ability to deduce sources from Quran and hadith since many

graduates failed in giving the evidence from the holy Quran and hadith as they

do not memorize them at all. Therefore, graduates need to improve their

proficiency in Arabic language and need to have a deep understanding of fiqh.

This will assist them to read and understand classical text on muamalah, such

as by al-Ghazali, al-Shaybani, Shaykh Muhammad Amin and al-Zarqa. Students

should also strengthen their understanding of tafsir of Al-Quran. Moreover,

universities should have a plan towards making students well-grounded in both

the mechanics and spirit of finance of which Islamic finance is based on. As

such, the graduates should be empowered to be well grounded in both

muamalat and shariah. This could be the most appropriate way to make

Muamalat and Islamic finance organic rather than 'Islamising' the conventional

finance practices.

It is also suggested that there should be a link between theory and practice.

Therefore, students should be more exposed to practical aspects of Islamic

finance rather than just theoretical parts. This is enable MIF graduates to better

adapt to practical aspects as they have been exposed to these aspects while

undergoing the programs at their respective universities. Moreover, they

should be constantly updated with latest developments in the Islamic financial

industry. More real world case studies should be discussed so that students are

able to link theories to current practices of Islamic financial industry.

30

In financial industry such as in banking sector, communication skills and other

soft skills are vital as they enable the graduates to perform multitasking job in

order to be competitive and to enhance their career development. It is

therefore recommended that students be equiped with communication skills

(spoken and written English), problem solving skills, managerial skills and

critical thinking skills to to analyze and interpret financial data. Students should

also have better proactive thinking skills, equip themselves with business

related skills and develop their self confidence without being arrogant. Besides,

students should be willing to learn and adapt to the changing working

environment. Therefore, universities should embed job market qualification

requirements into syllabus or have adjunct lecturers from industries to ensure

students are well prepared for working environment. Last but not least,

universities should inculcate into students ethical vaues of honesty, integrity,

objectivity, independence and hardworking.

Accordingly, universities should also have collaborations with industry to keep

abreast with the latest developments. The lecturers should also be involved in

conferences organised by the industry and to create networking with the

stakeholders in order increase activities between the universities and the

industry. Universities should have collaboration with industrial-oriented

institutions such as Islamic Banking and Finance Institute Malaysia (IBFIM),

Association of Islamic Banking Institutions Malaysia (AIBIM), International

Centre for Education in Islamic Finance (INCEIF), International Shari'ah

Research Academy for Islamic Finance (ISRA), Finance Accreditation Agency

(FAA), Asian Institute of Finance (AIF), Securities Industry Development

Corporation (SIDC), and Chartered Institute of Islamic Finance Professionals

(CIIF).

VIEWS OF EXPERTS IN FOCUS GROUP DISCUSSION

This section elaborates the views from experts in the field of Islamic finance. All

these views were gathered from a focus group discussion held on 3rd December

2015. There were 7 panellists involved in that focus group discussion consisting

of four from the industry (bankers, state government and private sector), and

3 MIF graduates from UUM, UiTM, and UniSZA. The views sought were based

on four main areas namely (1) views on MIF graduates; (2) future needs of the

industry on MIF graduates, and (3) the way forward for Islamic finance program

delivery.

31

Views on MIF graduates

The panellists provide views on MIF graduates in term of skills required as well

as the skills which they are lacking. Their feedbacks were based on their

experiences and observations on Islamic finance graduates.

a) Marketing Skills

The panellists agreed that human capital plays an important role in the Islamic

finance industry. There should be greater emphasis on the importance of

human capital by focusing on the human value and behaviour of the

employees. In banking sector, marketing skills as well as personal relation skills

of the bank staffs are identified as critical skills required to generate revenues

for banks. The marketing skills should be complemented with diligence, trust

and competence. They also opine that advancement in technology leads to less

employment of human labour in the banking business transactions. Due to this

changing banking landscape, the panellists strongly agree that graduates of MIF

should be equipped with good marketing skills and personal relation skills.

b) Soft Skills and Inter- and Intrapersonal Skills

MIF graduates have to be ready to deal with the general public and understand

their job specifications very well in order to execute their jobs effectively. The

expert group reveals that it is vital for the institutions to recognize the required

skills in their potential employees through personality test. The test will

evaluate the writing skill, oral skill of the local graduates as well as their

personality and communications skills. The experts opine that good grades are

not enough to show the capability of the local graduates. The graduates should

have soft skill, interpersonal skill and good public relation. The MIF graduates

also need to have pleasant personalities. Soft skill and interpersonal skill are

very important since most of the jobs for MIF graduates are dealing with public.

This is also seen as reflecting the true values of Islam. For example the job

specifications in zakat institutions are more customers oriented. The graduates

should be ready to interact with potential client and also ready to serve the

public. The experts find that personal relation skills are lacking amongst the

local graduates.

c) Language Proficiency

In addition, communication skill is also lacking amongst the local graduates

whereas communication skill is very important to serve customers. Thus, the

communication skill is evaluated in every interview especially in ensuring the

32

interviewees have good command of English. Compared to local graduates,

overseas graduates have an advantage in English proficiency for both written

and oral, and this enable them to be have more confident personality. The

experts informed that IIUM, UUM and UiTM graduates have good command of

English compared to local graduates of other universities. However, in the

banking sector, there is an opportunity for the local graduates who are weak in

English to improve their proficiency as they will be trained by the banks. Hence,

the right attitude is seen as a more crucial skill. Problem solving ability is also

identified as a skill that is highly needed in order to ensure the creativity in

solving work related problems. The geographic locations also play an important

role in determining the competencies of the graduates. For example, there are

different sets of challenges faced by companies located in Kuala Lumpur

compared to the ones faced in Kedah. In Kuala Lumpur, English is more

preferred to Malay language. However, in Kedah, Malay language is more

preferred. In addition, language proficiency level also depends on the type of

the banks whether they are local or international banks. International banks

emphasize more on English proficiency. Local graduates on the other hand are

also found to have lack of confidence. The main reason is due to the language

barrier. In the university, the students who have problem in mastering English

often avoid interaction with international students. Hence, language

proficiency especially in English is cited as one of the important skills to be

instilled among the MIF local graduates.

d) Find Uniqueness of MIF Graduates

The experts find that the local graduates are less resilient in facing the

challenges at the workplace. They always complain despite their claims that

they can withstand pressure when asked about their resilience during the job

interviews. It is suggested by the focus group that one way to overcome the

pressure, including racist issue at the workplace, is by mastering the job

knowledge and staying calm. In addition, a high command of knowledge in

Islamic finance is also important for MIF graduates to be able to explain the

advantages and uniqueness of Islamic finance. The focus group discussion also

highlights that that there are differences in the quality of the graduates across

universities, where graduates of one university maybe better than the others.

Graduates of public universities are found to be more courageous compared to

graduates of private universities. The experts find that many UUM and UiTM

MIF graduates have the advantage in communication skill and many of these

graduates from both universities are working at government departments and

government related agencies. However, graduates from new private

universities are found lacking in efficiency in completing tasks on time.

33

The industries are looking forward to the graduates with comprehensive skills

like good personality, critical thinking, ability to perform task and productive.

Hence, MIF graduates with these skills and in-depth knowledge about Islamic

disciplines as well as competent and knowledgeable in conventional finance

should create a uniqueness of MIF graduates.

Future needs of the industry with respect to MIF graduates

The panellists from the focus group proposed that universities should produce

MIF graduates with niche representing the “branding". The branding for MIF

graduates could be the potential employees with a balanced approach between

Shariah knowledge and professional competencies. In detail, the MIF graduates

should possess a complete package of sound knowledge in Islamic economics

and finance, ethical values such as high integrity, honest, diligence and the right

working attitude. With these qualities, they will more marketable both locally

as well as globally. Another selling point for MIF graduates is the ability to

communicate well in English and Arabic.

A crucial role of the MIF graduates is to play the mediating role to bridge the

existing gap between the practitioners and the academia. As highlighted by

Siddiqi in his observation of the development of the Islamic financial services

industry, being an “industry in a hurry”, the theoretical aspects of Islamic

economics and finance tend to lag behind its practical implementation. Having

the opportunity to be in both worlds, MIF graduates should put their effort to

find the best ways and means to minimize the adverse impact of conflicts

between theory and practice while simultaneously promote the right balance

to deliver the true potentials of Islamic finance.

Going forward, MIF graduates are expected to be able to work or obtain

employment in other areas than Islamic finance and banking sector. These

areas include takaful, halal markets, Baitulmal, asset and wealth management,

and entrepreneurship.

Equally important, the panellists from the industry also highlight the

responsibility of the MIF graduates to get actively involved in the effort to

increase the level of awareness of Islamic finance to the public. Indeed, the

continuous support of Muslims as well as non-Muslim clientele will positively

contribute to the future survival of the Islamic financial services industry.

Specifically, the MIF graduates can directly and indirectly involve in the process

of disseminating information on how Muamalat and Islamic finance can

contribute towards the stability of national and global financial and economic

system. Accordingly, the public should be informed of the ultimate goals of

34

Islamic finance which is to ensure justice in economic activities of mankind

leading to socio-economic prosperity.

The panellist from academic segment also highlights the role of Islamic finance

industry to continuously inform the education sector on their expectations

from the MIF graduates. This could be done by the industry providing the

necessary inputs in terms of the general as well as the specific needs of the

industry during the periodic curriculum review process conducted by

universities. Such structured process will assist the MIF graduates to be better

prepared to effectively contribute to the industry and to the Ummah at large.

The Way Forward for MIF Program Delivery

The discussion on the way forward for MIF program delivery is divided into the

following sections: curriculum design and development, teaching approach,

and contribution to the society at large.

a. Curriculum design and development

The panellists from the industry, graduates and academics unanimously agree

that the existing curriculum should be improved. Specifically, these

improvements need to include the integration of Islamic ethical values,

interpersonal skills, critical thinking, and ability to work in team and leadership

qualities.

Another essential element in curriculum design and development is the

integration of practical aspect of the courses taught. Some suggestions include

giving assignments which require the students to approach the practitioners,

inviting the practitioners for general and specific sharing sessions, appointment

of industry players as Adjunct Fellows or Professors. On the other hand, an

observation from the academics panellist also revealed that the MIF industry is

somewhat reluctant to share certain information which at times, discourages

the students to approach practitioners for market information.

Another practical aspect is the implementation of students’ practicum. Many

universities only allow their students to go for practicum training at the end of

their study period. The panellists provide feedback that placing practicum at

the end of the study period does not have an added value since they do not

have the opportunity to share the experience gained with their colleagues.

Thus, they propose that the practicum training should be held during the final

year and not at the end their study period.

b. Teaching approach

The experts highlighted that character building and development of soft-skills

mentioned above are closely related to the lecturers’ teaching approach. The

35

way the lecturers handle their classes affects the students learning behaviour.

The lecturers need to further nurture students’ specific skills such as the ability

to articulate ideas in the form of oral presentations and creative thinking

besides just the written report. Similarly, case studies and role-play should also

be used to stimulate critical thinking and decision making abilities. The experts

suggest that lecturers to use a variety of methods to develop various skills in

their students.

c. Contribution to the society

Part of the character building can also be nurtured through involvement in

community and CSR projects. Specifically, the MIF graduates should be trained

to care for others especially those who are in need. Various creative activities

in the form of collaborations with financial institutions and public organisation

should be organized to cultivate the students’ altruistic behaviours concerning

the well-being of the society surrounding them. Co-curriculum activities should

serve as a good link for the students and the communities to come together for

mutual benefits.

GAP ANALYSIS ON MIF EDUCATION

This section elaborates several gaps from the analysis on MIF skills, enrolment

and graduates as well as MIF program according to the five domains. Gap

analysis is done to answer research objective number three which is; to conduct

the gap analysis between the demand side and supply side of the MIF graduates

by the five domains.

Table 2.14 shows the skills being acquired by the MIF students and the

expectations levels of practitioners in the scale of 1 to 7. Except for proficiency

in Malay language in which the MIF graduates excel, there are negative gaps in

other skills such as interpersonal, computing, enterprise and entrepreneurial,

communication, thinking, managerial, English and Arabic languages. The results

indicate that the skills acquired by the graduates are not meeting the

expectation of the market requirements satisfactorily. However, these negative

gaps are less than 1 except for English and Arabic languages, which shows

negative 1.07 and 1.10 respectively.

Table 2.14 Gaps Analysis: MIF Graduates Skills Acquired and Market Required

No Skills Graduates Acquired

Market Required

GAP Level

1 Interpersonal 5.29 5.65 -0.36 Above Average

2 Computing 5.16 5.49 -0.34 Above Average

36

3 Enterprise & Entrepreneurial

4.99 5.56 -0.57 Above Average

4 Communication 5.26 5.75 -0.49 Above Average

5 Thinking 5.19 5.77 -0.58 Above Average

6 Managerial 5.30 5.82 -0.52 Above Average

7 Malay Language 6.48 6.13 0.35 Excellent

8 English Language 5.11 6.17 -1.07 Above Average

9 Arabic Language 3.18 4.28 -1.10 Below Average

10 Package1 (All Skills)

5.14 5.60 -0.14 Above Average

11 Package 2 (Beside Language)

5.23 5.65 -0.42 Above Average

The results indicate that MIF graduates need to improve in enterprise and

entrepreneurial skills, thinking skill, and managerial skill where the gap is -0.57,

-0.58, and -0.52 respectively. The findings also suggest that greater efforts are

required to increase MIF graduates' proficiency in English and Arabic languages.

Overall, skills analysis (as Package 1 in Table 2.13) provides an important

feedback that there is a shortfall by 0.14 between the levels of skills expected

by the market compared to what the MIF graduates have acquired. Excluding

languages gaps, MIF graduates lack by 0.42 points in term of the overall

managerial, entrepreneurial and people skills. The fact that it is a managerial

negative gap also evidence that the present MIF curriculum is appropriately

designed. This implies that additional enhancement, in the content and course

delivery of MIF programs, would improve further the quality of the MIF

graduates.

Figure 2.20 illustrates the gap in terms of students’ enrolment and graduates

of MIF programs as of 2015. Total number of students enrolled in MIF programs

currently is 20,446. This is about 38% from the 54,000 target in 2020. The

finding implies that public and private universities should increase their

students' intake capacity in MIF programs in the next 5 years (2016 - 2020) to

achieve the Malaysian government's target. A more coordinated students'

intake planning system at the national level is needful in line with the capacity

and capability of the resources and support sciences of each university offering

MIF programs.

Figure 2.20: Gap Analysis: Students’ Enrolment and Graduates by 2015

37

This research finds that the total number of graduates, from 14 public

universities and 3 private higher learning institutions, is 9,910 graduates. As of

end 2014, there were 2,000 MIF graduates. By 2020, the number of new jobs,

expected to be created in Islamic banks in 2020, is 4,300 jobs (BNM, 2015). New

job opportunities are indicated to be in other financial services areas such as

Takaful, Islamic asset and wealth management, entrepreneurship and business.

Table 2.15: Gap Analysis # Institutions Program Enrolment Graduate Focus Domain Start Offering Year

1 UM 27 1476 1443 S&L 1996

2 UKM 12 1957 415 IE 1975

3 UUM 11 1893 1133 IF 2003

4 USIM 8 3235 1587 S&L 2002

5 IIUM 6 2288 1253 IF 1995

6 KUIN 6 1510 292 IF 2008

7 UiTM 6 3036 1359 IF 2000

8 KUIS 5 2192 1048 IF 1997

9 USM 4 577 107 IM 2007

10 INCEIF 3 842 65 IF 2008

11 UMS 2 976 533 IF 2004

12 UMT 2 53 3 IE 2000

13 UniSZA 2 1195 357 IF 2009

14 UMK 1 595 0 IF 2011

Analysis on students' enrolment and graduation, based on the five MIF domains

(Shariah and law, Islamic finance, Islamic economics, Islamic accounting, and

Islamic management), is illustrated in Figure 2.21. The findings show that the

highest number of MIF enrolment is in Islamic finance compared to the other

four domains, i.e. Shariah and law, Islamic economics, Islamic accounting, and

Islamic management. This implies that there should be more MIF students'

intake in the other four domains to cater for broader based labour markets.

This is also to prevent a possible oversupply of students’ intakes and graduates

in Islamic finance. Furthermore, the analysis shows the gap in the programs

Enroll Graduate

20446

9910

54,000 by

4,300 jobs expected

38

offered whereby only Islamic finance has the most number of programs (33)

compared to Islamic economics and Islamic accounting with only 15 programs

and 2 programs respectively as shown in Figure 2.22.

The gap between Islamic finance program and the programs in the four

domains is also evident from Table 2.15 where nine out of 14 universities have

their focus domain in Islamic finance program, two universities in Islamic

economics, and two universities in Shariah and Law while only one university

focuses on Islamic management. Hence, universities need to offer more

programs in order to increase the number MIF graduates in the areas identified

lacking notably in Islamic accounting, Islamic economics and Islamic

management.

Figure 2.21: Gaps Analysis on Enrolment and Graduates based on Domain

Figure 2.22: Gaps Analysis on Programs Offered based on ICIFE Domains

4120

12162

1220 1277 166726865008

833 857 526

Enroll Graduate

39

Appendix I

LIST OF PROGRAMS OF DIPLOMA AND BACHELOR BY INSTITUTIONS (as per October 2015)

# Inst. No Program Name or Area Level Domain Approach

1 UiTM

(5)

1 Diploma of Muamalat Diploma M(S&L) Stand-Alone

2 Diploma of Halal Management Diploma IM Stand-Alone

3

Bachelor of Business Administration (Islamic Banking and Finance) with Honours

Bachelor IF Specialization

4 Bachelor of Muamalat (Hons) Bachelor M(S&L) Stand-Alone

5 Bachelor of Business Administration (Hons) Islamic Banking

Bachelor IF Specialization

2 KUIS (5)

6 Diploma in Islamic Banking Diploma IF Stand-Alone

7 Diploma in Islamic Finance Planning

Diploma IF Stand-Alone

8 Bachelor in Islamic Finance (Banking)

Bachelor IF Stand-Alone

9 Bachelor in Islamic Finance (Capital Market)

Bachelor IF Stand-Alone

10 Bachelor in Islamic Finance (Takaful)

Bachelor IF Stand-Alone

3 USIM

(4)

11 Bachelor of Muamalat Administration with Honours

Bachelor M(S&L) Stand-Alone

12 Bachelor of Accountancy with Honours

Bachelor IA Stand-Alone

13 Bachelor of Corporate Administration and Relations with Honours

Bachelor IM Stand-Alone

14 Bachelor of Marketing (Financial Services) with Honours

Bachelor IM Stand-Alone

4 KUIN (4)

15 Diploma in Islamic Banking Diploma IF Stand-Alone

16 Bachelor of Business Administration (Islamic Banking & Finance)

Bachelor IF Specialization

17 Bachelor of Business Administration with Honours (Islamic Financial Planning)

Bachelor IF Specialization

18 Bachelor of Business Administration with Honours (Risk Management & Takaful)

Bachelor IF Specialization

5 IIUM (3)

19 Bachelor of Science Islamic Finance (Honours)

Bachelor IF Stand-Alone

20 Bachelor of Economics (Islamic Economics)

Bachelor IE Specialization

21 Bachelor of Accounting (Islamic Accounting)

Bachelor IA Specialization

6 UUM (2)

22 Bachelor of Muamalat Administration with Honours

Bachelor M(S&L) Stand-Alone

23 Bachelor of Islamic Finance And Banking With Honours

Bachelor IF Stand-Alone

7 UKM (2)

24 Bachelor of Economics (Module of Islamic Economics)

Bachelor IE Specialization

25

Bachelor of Islamic Studies (Module of Muamalat & Islamic Finance)

Bachelor M(S&L) Specialization

40

# Inst. No Program Name or Area Level Domain Approach

8 UM (2)

26 Bachelor of Muamalat Management

Bachelor M(S&L) Stand-Alone

27 Bachelor of Shariah (Shariah and Economics)

Bachelor IE Specialization

9 UniSZA

(2)

28

Bachelor of Business Administration (Risk Management & Takaful) with Honours

Bachelor M(S&L) Specialization

29 Bachelor of Business Administration (Islamic Finance) (Honours)

Bachelor IF Specialization

10 UMS (1) 30 Bachelor of Islamic Finance (Hons)

Bachelor IF Stand-Alone

11 USM (1) 31 Bachelor of Management (Specialise in Islamic Finance)

Bachelor IF Specialization

12 UMK (1) 32

Sarjana Muda Pentadbiran Perniagaan (Perbankan dan Kewangan Islam) dengan Kepujian

Bachelor IF Specialization

41

Appendix 2

LIST OF PROGRAMS OF MASTER AND PHD BY INSTITUTIONS (as per October 2015)

# Inst. No Area or Discipline Level Domain

1 UM (13)

1 Master of Syariah (Coursework and Research)

Master by CW/MM M(S&L)

2 Master in Islamic Studies by research - Muamalat

Master by Research M(S&L)

3 Master in Islamic Studies by research - Islamic Management

Master by Research IM

4 Master in Islamic Studies by Research - Islamic Economics

Master by Research IE

5 Master of Syariah by Research - Muamalat

Master by Research M(S&L)

6 Master of Syariah by Research- Islamic Management

Master by Research IM

7 Master of Syariah by Research - Islamic Economics

Master by Research IE

8 PhD in Islamic Studies - Muamalat PhD M(S&L)

9 PhD in Islamic Studies - Islamic Management

PhD IM

10 PhD in Islamic Studies - Islamic Economics

PhD IE

11 PhD Syariah - Muamalat PhD M(S&L)

12 PhD Syariah - Islamic Management PhD IM

13 PhD Syariah - Islamic Economics PhD IE

2 UKM (11)

14 Master of Islamic Economics by Coursework

Master by CW/MM IE

15 Master of Economics (Module of Islamic Economics) by Coursework

Master by CW/MM IE

16 Master of Islamic Studies by Mixed Mode

Master by CW/MM M(S&L)

17 Master of Islamic Banking and Finance by Mixed Mode

Master by CW/MM IF

18 Master of Islamic Economics by Research

Master by Research IE

19 Master of Economics (Module of Islamic Economics) by Research

Master by Research IE

20 Master of Islamic Studies by Research

Master by Research M(S&L)

21 Master of Islamic Banking and Finance by Research

Master by Research IF

22 Doctor of Philosophy (Economic) by Mixed Mode and Research

PhD IE

23 Doctor of Philosophy (Economic) by Research

PhD IE

24 Doctor of Philosophy in Islamic Studies

PhD M(S&L)

42

# Inst. No Area or Discipline Level Domain

3 UUM (9)

25 Master in Islamic Finance and Banking

Master by CW/MM IF

26 Master of Islamic Business Studies (MIBS) by Coursework

Master by CW/MM IM

27 Master of Science (Islamic Banking) by Research

Master by Research IF

28 Master of Science (Islamic Finance) by Research

Master by Research IF

29 Master of Islamic Business Studies (MIBS) by Research

Master by Research IM

30 PhD (Muamalat & Shariah Advisory)

PhD M(S&L)

31 PhD (Islamic Finance & Banking) PhD IF

32 PhD (Islamic Management) PhD IM

33 PhD (Islamic Economics) PhD IE

4 IIUM (8)

34 Master of Science in Islamic Banking & Finance (Coursework)

Master by CW/MM IF

35 Master of Business Administration (Islamic Banking and Finance)

Master by CW/MM IF

36 Master of Science in Accounting (Islamic Accounting) by coursework

Master by CW/MM IA

37 Master of Economics (Islamic Economics and Finance) by coursework

Master by CW/MM IE

38 Master of Law (LLM) in Islamic Banking & Finance - Muamalat (Shari'ah and Law)

Master by CW/MM M(S&L)

39 PhD in Islamic Banking & Finance PhD IF

40 PhD in Economics (Islamic Economics)

PhD IE

41

PhD in Law (Islamic Banking, Finance and Takaful/Islamic Law and Transactions/Islamic Law and Zakat

PhD M(S&L)

5 USIM

(4)

42 Master of Muamalat Administration

Master by CW/MM M(S&L)

43 Master of Muamalat Administration (Halal Product)

Master by CW/MM M(S&L)

44 Master of Economics & Muamalat Administration

Master by Research M(S&L)

45 PhD in Economics & Muamalat Administration

PhD M(S&L)

6 USM (3)

46 Master of Social Sciences (Islamic Development Management) by Mixed Mode

Master by CW/MM IM

47 Master of Social Sciences (Islamic Development Management) by Research

Master by Research IM

48 Doktor Falsafah Pengurusan Pembangunan Islam (secara Penyelidikan)

PhD IM

43

# Inst. No Area or Discipline Level Domain

7 INCEIF

(3)

49 Master of Science in Islamic Finance (By Coursework & Dissertation) Master by CW/MM IF

50 Master in Islamic Finance Practice (MIFP) Master by CW/MM IF

51 PhD in Islamic Finance PhD IF

8 UMT (2)

52 Master of Science (Economics) Master by Research IE

53 PhD in Science (Economics) PhD IE

9 KUIN

(2)

54 Masters in Islamic Banking and Finance by Coursework Master by CW/MM IF

55 PhD in Islamic Finance and Banking PhD IF

10

UMS (1) 56 Master of Finance (Islamic Finance) by Research

Master by Research IF

11

UiTM (1)

57 Master of Islamic Banking & Finance Master by CW/MM IF

44

PART TWO: ISLAMIC FINANCE CURRICULUM DEVELOPMENT

RESEARCH BACKGROUND

With significant proliferation and offerings of Islamic finance academic

programmes from diploma to doctorate levels by various public and private

universities and colleges, there is an increasing concern on the design and

delivery quality of the Islamic finance curriculum. Furthermore with the

national aspiration to attain the status of global Islamic finance education hub,

comprehensive education infra-structure for Islamic finance needs to be

introduced to facilitate the systematic growth and sustainable development of

the Islamic finance education programmes in Malaysia. This led to the

importance of Islamic finance education sector as the key result area of nation

Economic Transformation Programme (ETP) in the Entry Point Project Seven

(EPP 7) Initiative.

RESEARCH SCOPE

This study report presents the various academic and industry initiatives and

efforts in the form of standard, consultations and roundtable discussions as

well as an empirical survey to formulate and propose a coherent and consistent

structure of Islamic finance curriculum to guide Islamic finance education

practices.

RESEARCH OBJECTIVES

The purpose of this report is to examine the analytics of MQA Muamalat and

Islamic Finance standard and explore the domains of Islamic finance. A

reconciliation to enhance the Islamic finance curriculum is recommended to

better understand the Islamic finance education in practice. It also proposes a

curriculum structure that encourages Islamic finance education inclusion to

cater for the progressive need of human capital and talent development in

Islamic Finance.

REVIEW OF MQA MUAMALAT AND ISLAMIC FINANCE STANDARD

Since the introduction of MQA Muamalat2 and Islamic Finance (MQA MIF)

Standard in 2012 all existing and new Islamic finance academic programmes are

expected to adopt the standard for programme approval and accreditation.

This section highlights the significant sections of MQA MIF Standard that

2 Muamalat according to MQA refers to procedures or rules in human relations in order to meet each other needs and

which are based on Shari’ah.

45

prescribed the structure and content of the Islamic Finance curriculum. In

particular the programme aims, learning outcomes and curriculum design and

delivery as well as the body of knowledge are examined and assessed

accordingly.

a. Programme Aims and Learning Outcomes

‘The general objective of MIF programme is to prepare graduates with

knowledge on MIF theories and applications and the ability to interlink with the

global environment and possess high ethical values.’

The general objective would ‘technically’ apply to any programme from the

FIVE disciplines of MQA MIF which are Muamalat, Islamic Finance, Islamic

Economics, Islamic Accounting and Islamic Management. Further deliberations

of the objectives at each level are specified in the following table 3.1.

As highlighted in the above table, the programme aims and learning outcomes

are guided by generic education objectives and learning processes for each

level and do not specify the learning content/domain outcomes or for each

discipline from interdisciplinary theories or multi-disciplinary objectives. The

levels of learning outcomes are generic and not related to specific context in

terms of the institutional role and the tasks to be executed. The final column

proposes some initial perspective for each level of competency.

Table 3.1: Comparative Analysis MQA MIF Certification Levels

LEVEL OBJECTIVES DISCIPLINES3 LEARNING OUTCOMES

COMMENT

CERTIFICATE Basic skills and knowledge in Muamalat and Shari’ah as well as awareness of ethics and accountability for each of the specified courses

Muamalat Islamic Economics Islamic Finance Islamic Management Islamic Accounting

Understand Utilise Perform Execute Communicate Demonstrate

It should focus on awareness of the foundations and equip with basic technical skills.

DIPLOMA Relevant skills and broad based knowledge and to apply principles and solve problems

Muamalat Islamic Economics Islamic Finance Islamic Management Islamic Accounting

Demonstrate Communicate

It should focus on awareness and equip with principles and functional technical skills

LEVEL OBJECTIVES DISCIPLINES LEARNING OUTCOMES

COMMENT

3 Muamalat briefly refers to Shari’ah based transactions. Islamic economics, Islamic finance and Islamic management refers to both conventional and Islamic courses. Islamic accounting however refer to Islamic courses only.

46

ADVANCED DIPLOMA

Relevant skills and broad based knowledge as well as to assist Islamic institutions and their clients

Muamalat Islamic Economics Islamic Finance Islamic Management Islamic Accounting

Demonstrate Apply Possess

It should focus on understanding and be equip with both conceptual and technical skills

BACHELORS DEGREE

Sufficient knowledge and skills for higher degree of autonomy than diploma such as effective leadership

Muamalat Islamic Economics Islamic Finance Islamic Management Islamic Accounting

Apply Communicate Demonstrate

Focus should be to understand and equip with both conceptual and technical skills as well as institutional issues

POSTGRADUATE DIPLOMA

Relevant skills and broad based knowledge as well as to assist Islamic institutions and their clients

Muamalat

Islamic Economics

Islamic Finance

Islamic Management

Islamic Accounting

Demonstrate

Apply

Solve

Focus should be to understand and equip with both conceptual and technical skills as well as institutional problem solving skills

MASTERS DEGREE

Advanced knowledge and skills to deal with demands and challenges of Islamic finance industry

Muamalat

Islamic Economics

Islamic Finance

Islamic Management

Islamic Accounting

Demonstrate

Apply

Solve

Focus should be to understand and equip with both conceptual and technical skills as well as institutional leadership skills

DOCTORAL DEGREE

Develop, expand and apply knowledge of principles in both industry and society directed to both practitioners/researchers

Muamalat

Islamic Economics

Islamic Finance

Islamic Management

Islamic Accounting

Generate

Demonstrate

Contribute

Engaged

Promote

Demonstrate

Focus should be to understand and equip with both conceptual and research skills as well as academic leadership and scholarship

Specific references are made to Islamic disciplines however do not indicate

whether an Islamic perspective or comparative perspective or both are adopted

since both conventional and Islamic courses are recognized in each discipline.

In terms of standalone discipline or a combination of both the MQA MIF is

indicative of a potential interdisciplinary approach. The following figure

illustrates the MQA MIF approach to a ‘programme based curriculum’.

47

Figure 3.1: Analytical MQA MIF Programme Based Curriculum Framework

Though MQA MIF standard presents a comprehensive approach for the five

disciplines, it also prescribed the body of knowledge for Islamic finance to be

within three sectors as well as a generic fourth sector. The discipline core and

elective courses are meant to be traceable to each of the sector in Islamic

finance discipline. A further elaboration on the inter-disciplinary research and

multi-disciplinary application of Islamic finance would be useful to identify the

appropriate theories and relevant applications to domains of Islamic finance.

Furthermore Shari’ah (Islamic law) which is source from (Ad Deen) the revealed

religion of Islam need to be specified to guide the applications of Shari’ah in

Islamic Finance and to be consistent with Islamic belief (worldview)4. Currently

most discussions relate to Shari’ah without specific reference to the religion of

Islam (Ad Deen ul Islam).

b. Curriculum Design and Delivery

This section specifies ‘curriculum design and delivery’ to be similar to

‘programme design and delivery’. Hence this implies that MQA MIF standards

adopt a selected programme based curriculum design approach where the

curriculum is aligned to programme aims and objectives. Hence the process

approach in programme development would significantly influence the

curriculum design. The approach technically aligns to Outcome Based

Education (OBE). This approach however needs to be complemented with the

content and context of the course in curriculum design. Otherwise the

curriculum may lack the relevant content to support the desired learning

experience within the specified context. The implications of this gap are further

discussed in the subsequent sections.

4 Suurah AsShuraa 13:42

48

Table 3.2: MIF Programme Structure Component Analysis

LEVEL CORE COMPONENT5 MINIMUM

CREDIT HOURS

WEIGHTS REMARKS

CERTIFICATE Compulsory modules 15 25% Max

MIF Common core 15 25% Max

Discipline core 30 50%

Industrial Training 0 0%

Total 60 100%

DIPLOMA Compulsory modules 15 17% Max

MIF Common core 27 30% Max

Discipline core 30 33%

Discipline elective 15 17%

Industrial Training 3 3%

Total 90 100%

ADVANCED DIPLOMA MIF Common core 18 37% Max

Discipline core 32 65%

Industrial Training 0%

Total 49 100%

BACHELOR Compulsory modules 24 20% Max

MIF Common core 30 25% Max

Discipline core 45 38%

Discipline elective 15 13%

Industrial Training 6 5%

Total 120 100%

POSTGRADUATE DIPLOMA

MIF Common core 15 50%

Discipline core 12 40%

Discipline elective 3 10%

Industrial Training 0%

Total 30 100%

MASTERS Coursework MIF Common core 16 40% Max

Discipline core 18 45%

Industrial Training 6 15%

Total 40 100%

MASTERS Mix Mode MIF Common core 16 40%

Discipline core 3 8%

Dissertation 21 53%

Total 40 100%

DOCTORATE mixed mode

MIF Common core 24 40% Max

Discipline core 6 10%

Dissertation 30 50%

Total 60 100%

The following programme structures specify common core, discipline core and

discipline elective. However, only common core is emphasized in MQA MIF

standard. For each level a minimum graduation requirement is specified.

5 Common core courses are required modules to all disciplines related to Muamalat and Islamic finance. Discipline core are required modules for a specific discipline related to Muamalat and Islamic finance.

49

From the table 3.2, each programme level comprised of MIF common core and

discipline core/elective. The MIF common core requirements include Islamic

theology, Usul al-Fiqh (Jurisprudence), Fiqh Muamalat (Commercial Law),

Qawaid Fiqhiyyah (Legal maxims) and Akhlaq Islamiyyah (Islamic Ethics).

Common core are the programme requirements whilst discipline core are the

specialisation requirements. The discipline core includes both conventional and

Islamic courses without specific reference to domains of each course.

Based on a simple course credit hour allocation with possible maximum credit

load assigned to compulsory courses followed by MIF courses, it is found that

the minimum MIF concentration ranges from 25% to 40% of total required

credits to be included in the MIF programme standard. Generally the MIF

component weight is higher in postgraduate as compared to under

undergraduate due to fewer courses and more in-depth study of the topics in

the course. Hence using this range as a ‘rule of thumb’ this study will extend

the concentration to suggest 50% for professional and 40% for specialization in

Islamic finance.

c. Body of Knowledge

The body of knowledge of Islamic Finance in MQA MIF specifies four sectors

namely, Islamic Banking, Islamic Capital Markets, Takaful and Islamic Finance.

This can be cited in Appendix 2 of MQA MIF Standard. Appendix presents a

matrix of specified topics for each sector of Islamic financial practices. This

implies the knowledge from practice approach rather than from ‘root

disciplines’ are considered.

An analysis of Islamic banking as a body of knowledge with direct reference to

the ‘core banking process’ only FIVE banking courses that could be identified

from all levels of course requirements from Certificate to Doctorate. These

courses are Islamic Bank Management, Banking Operations, Islamic banking

Legal Framework, Islamic Treasury and Islamic Trade Finance.

An analysis of Islamic capital as a body of knowledge with reference to financial

securities only EIGHT capital market courses could be identified from all levels

of course requirements from Certificate to Doctorate. The courses are Islamic

Capital Market, Islamic investment, Islamic wealth management, Fund

Management, Islamic and conventional financial market, Equity market,

Derivatives and Sukuk.

An analysis of Takaful as body of knowledge with direct reference to Takaful

business only SEVEN Takaful courses are identified from all level of course

requirements from certificate to Doctorate. These courses are Takaful,

Framework of Takaful, Family Takaful, General Takaful, Re-Takaful, Takaful

Business and Fund Management.

50

The above preliminary observations indicate the challenge of classifying the

body of knowledge in Islamic finance from the context of Industry sectors.

Hence a systematic classification that is both coherent and consistent for

Islamic finance as a body of knowledge is explored in this project from

identifying the specific domains that formalize the discipline of Islamic finance.

PROPOSED EPP7: DOMAINS FOR ISLAMIC FINANCE

The promulgation of MQA MIF standard effectively sets the tone for the need

to effectively govern the Islamic finance programme offerings from certificate

to doctoral levels. This progressive initiative however raise questions on the

flexibility and representativeness of programme design, delivery and content

with specific reference to the relevant Islamic finance domains.

Furthermore with the involvement of variety of public and private tertiary

institutions that offer various programmes which include Islamic finance

courses, there is a need to adopt a more flexible yet consistent approach to

identify the Institutions that offer Islamic finance programmes. Not all of the

institutions are exposed to the philosophy of Islamic education which

recognizes the sacred role of man as servant of God and whose ultimate role is

to worship Him to seek true happiness. Islamic education is to guide man

towards this ultimate end.

Hence the perception of Islamic finance education as a branch of field of

conventional finance would allow institutions to conduct comparative

perspectives of Islamic finance as alternative finance and yet not meeting the

original intended purpose of Islamic finance education. With this in mind, Entry

Point Project (EPP) 7 Curriculum development initiative is embarked to explore

a comprehensive and representative ‘domain based curriculum approach’ to

identify and integrate them to represent Islamic finance as an inter-disciplinary

field of study.

Towards Developments of a ‘Domains’ Construct in Islamic Finance

The strong felt need to expound further on the curriculum with regard to the

domains of Islamic Finance is highlighted from the Interim Report on

Curriculum Development for Islamic Finance Education 2014. The mandate for

EPP (Entry Point Project) 7 came from the National Economic Transformation

Programme (ETP) launched on 25 September 2010 with the primary purpose

for Malaysia to attain developed status by 2020. Among the 12 National Key

Economic Areas (NKEA), EPP7 is the Islamic Finance Education cluster listed as

one of the 13 EPPs in NKEA Education.

51

The approved project period is from September 2012 and is expected to end by

2015. The project aims to build the country’s capability as an Islamic finance

and business education centre, as well as, to contribute towards the

development of a globally recognized professional certification for Islamic

Finance. On the curriculum development initiative of EPP7, the Team was

tasked to develop internationally accepted standards for Islamic finance

curriculum covering diploma to doctorate degrees. At least three phases of

engagement among the Islamic finance educators and stakeholders were

organized to focus and formalize on issues relating to curriculum design,

structure, content, delivery and assessment. This section will highlight

pertinent observations of the report.

1st Phase: The First EPP 7 Attempt

In the 1st EPP – 7 Task force meeting held at De Palma Hotel Kuala Lumpur on

October 13, the members met to agree on the pertinent activities and

milestones to be achieved for the project. For the curriculum initiative

members will prepare 1st degree draft for circulation as well as feedback from

focus groups. A global round table to obtain feedback from the international

Islamic finance community was intended to be the concluding event.

2nd Phase: Curriculum Development Workshop

On December 7, 2012 at Pan Pacific Hotel in KLIA, Sepang, Malaysia the

curriculum development workshop was held. Among the objectives specified

for the workshop is to generate connecting ideas between curriculum and

talent teams to facilitate achievement of the EPP 7 objectives. Several

presentations on the following topics were delivered as follows:

a. Role of Turath in curriculum and Talent Development b. Briefing on MQA MIF c. Curriculum development from Islamic perspective d. Panel Sessions on Islamic Finance Education Industry e. Panel Session and Discussions on the FIVE DOMAINS

During this phase the FIVE DOMAINS are identified as follows: 1. Islamic Economics 2. Shari’ah and Law 3. Banking and Finance 4. Islamic Accounting 5. Islamic Management

Turath or legacies of Prophet Muhammad PBUH as guidance and mercy to

mankind will significantly contribute to the Islamic worldview (‘ubudiyyah,

khilafah and amanah) as well as other pertinent elements of belief that shape

the coherent and consistent values between right knowledge and right

expertise which is significantly lacking in the financial sector. This will also

52

promote balance between permanent and changing needs of man and society

as well as generalization and specialization in the pursuit of knowledge.

The lack of Islamic philosophy and worldview is emphasized in examining

curriculum development from an Islamic perspective. Suggestion to consider Al

Attas and other curriculum models are highlighted.

Discussion on MQA MIF poses an insightful view on the need for global standard

to be different from the existing MQA MIF. It was generally understood that

MQA MIF has been issued and apply to local jurisdiction. The learning

experience from the implementation of the standard can be incorporated to

enrich the development of the global standards. In this respect, section 1 of this

report has discussed specific contents of MQA Standard and Section 3 of this

report will highlight findings of survey from Higher Education Learning

Institutions on the implementation of the standard.

3rd Phase: Focus Group Meetings

In this third phase, three focus group meetings were held as follows:

1st Focus Group Meeting from June 24th to 26th, 2013 at Intercontinental

hotel, Kuala Lumpur which agreed to draft the undergraduate bachelor

programme curriculum as precursor to other programmes.

2nd Focus Group meeting from October 22nd to 23rd at Kelab Darul Ehsan

Ampang Kuala Lumpur which completed the 1st draft of the

undergraduate bachelor degree programme.

3rd Focus Group meeting on February 5, 2014 at Kelab Darul Ehsan,

Ampang, Kuala Lumpur was held where the domain leaders met and

agreed to finalize and endorse the comprehensive EPP 7 curriculum

report as per Appendix II.

The report presented the following:

Six domains and their learning outcomes:

For each domain the prescribed core and elective courses

For each core and elective course the proposed topical headings

Proposed course delivery and assessment methods are also specified

for consideration

As for the typical Bachelor Degree programme structure, the report proposes:

Table 3.3: EPP 7 Proposed Bachelor Programme Structure Credit Hour Allocation

Programme Structure Min Credits %

University Required 15 11

Islamic Finance 36 27

53

Shari’ah and Law 27 20

Islamic Economics 12 9

Islamic Accounting 9 7

Islamic Management/ Marketing 9 7

Quantitative/ Research Methodology/ ICT 9 7

Other Electives 9 7

Project Paper 6 5

132 100

From the table we can observe that highest percentages are assigned to

Islamic Finance and Shari’ah/Law followed by Economics and other domains.

The high propensity for Islamic Finance as well as Shari’ah and Law is attributed

to the dual nature of both conventional and Islamic courses. Most of the Islamic

courses present a perspective or comparative view to the conventional courses.

On the other hand ‘Shariah inclusive approach’ of human social moral choice

would be addressed from Shari’ah compliance screening methodology.

Furthermore Shari’ah as a source of legal rulings and opinions also shape the

conduct of economic activities.

Each domain generated courses are however proposed without any specific

references to cross-domain inter dependency, that is, pre-requisites from root

disciplines. This would enable the courses to be offered in an integrated

manner from inter-disciplinary perspectives. Another limitation observed is the

lack of ‘capstone’ course that presents the signature of the programme. In this

case the project paper could be designed to present a multi-disciplinary thrust

towards forming the type of graduate to be realized for the industry and

community.

PROPOSED EPP7: CURRICULUM STRUCTURE

With the introduction of domains to facilitate a more precise classification of

Islamic finance courses and to be considered as a specialized Bachelor degree

in Islamic Finance, the curriculum committee also deliberated in subsequent

discussion workshops on the types of degree specializations to be considered

for the curriculum design.

Table 3.4: Comparative Curriculum Analytics of MQA Muamalat and Islamic Finance Standard with EPP 7

MQA MUAMALAT AND ISLAMIC FINANCE

EPP 7 ISLAMIC FINANCE

MODE OF STUDY

COURSEWORK ONLY COURSEWORK ONLY

54

PROGRAMMES OFFERED

STAND ALONE

Bachelor in Muamalat

Bachelor in Islamic Finance

Bachelor in Islamic Economics

Bachelor in Islamic Accounting

Bachelor in Muamalat Administration

PROFESSIONAL DEGREE

Bachelor in Islamic Finance (Banking)

Bachelor in Islamic Finance (Capital Markets)

Bachelor in Islamic Finance (Takaful)

COMBINATION

Bachelor in Muamalat and Islamic Risk Management

Bachelor in Islamic Economics and Islamic banking

SPECIALIZATION

B.Sc. or B.A. in Islamic Finance

B.Sc. or B.A. in Islamic Banking

B.Sc. or B.A. in Islamic Capital Market

B.Sc. or B.A. in Risk Management and Takaful

SPECIALIZATION APPROACH

Bachelor in Business Administration (Islamic Finance)

Bachelor of Management (Islamic Finance)

Bachelor of Economics in (Islamic Finance)

MAJOR/CONCENTRATION

Bachelor of Business (Islamic Finance)

Bachelor of Laws (Islamic Finance)

Bachelor of Social Science (Islamic Finance)

Bachelor of Shari’ah (Islamic Finance)

This approach to curriculum design and structure expand the current

MQA MIF ‘programme based curriculum approach’ to include various

programme types with ‘significant’ Islamic finance component in the

programme. From a relatively ‘exclusive approach’ the proposed structure as

deliberated presents a more ‘inclusive approach’.

The above table highlights the various Bachelor programmes considered by

MQA MIF standard which include programmes for each discipline as

specialization. The programme nomenclature would require a detail

justification for significant component of Islamic Economics, Islamic Finance

and Islamic Accounting courses, which currently includes all relevant

conventional courses for standalone, combination and specialization. From

EPP7 perspective Bachelor in Islamic Finance specialization can be presented in

three forms namely, Islamic finance professional degree, Islamic finance

specialization degree and major concentration. The variation in Islamic finance

domain will determine the variations of Islamic finance degree. Essentially the

common core will be similar across programs but the discipline core and

electives will vary with the required body of knowledge to ascertain the type of

degree.

Figure 3.2: MQA MIF – EPP 7 Programme Learning Outcomes

55

In Figure 3.2 a more extensive programme learning outcomes are proposed by

EPP7 initiatives, though both programme learning outcomes which focus on the

graduate personality in terms of knowledge and skill sets, there was lack

reference to identify the programme learning outcome to specific discipline or

sub discipline related field. Hence programme specializations or sub

specializations relating to sectors such as banking, Islamic capital markets or

Takaful are not mentioned.

Figure 3.3: Comparative MIF EPP 7 Programme Structure components

In Figure 3.3 the MQA MIF Discipline core and elective courses refer to all core

courses relevant to Islamic finance which are identified with Banks, Capital

Market and Takaful as the body of knowledge. EPP7 programme structure

specifically identifies the FIVE domains as well as the quantitative requirements

to determine the required courses for each discipline domain significant to the

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programme. In other words for each Islamic finance program specialization, the

program discipline domains are identified and prescribed accordingly. Hence

there is a need to design a curriculum that allocates relevant weights for the

various domains for each concentration. The recognition of such programmes

as Islamic finance would be consistent with the ‘inclusive approach’.

The following figure presents the domains of Islamic finance before identifying

the sectors to which the discipline is represented in each sectors. In the case of

Islamic finance discipline, all FIVE domains are critical to shape the Islamic

finance programme; these will be represented as required discipline core in

addition to common core prior to formalizing the Islamic finance electives.

From a quick survey of 5 institutions6 with 7 undergraduate programmes to

tabulate the percentage of Islamic finance component, the survey found the

various types of Islamic finance undergraduate programmes in Malaysia which

indicated an interesting pattern as shown in the following table and figure.

Figure 3.4: Islamic Finance Domain Based Approach

Table 3.5: Distribution of credits per domain and percentage of total course credit

University Programme IF SL IE IA IM QICT Total %

IIUM BSc IF 15 21 3 6 12 57 51.82%

USIM BIBF 21 16 9 46 41.82%

USIM BMA 6 23 10 39 35.45%

UUM BIBF 15 9 3 9 36 32.73%

UUM BMA 24 9 9 42 38.18%

6 The five institutions are IIUM, USIM, UUM, LKW AND KUI.

57

LKW BIBF 36 15 6 18 75 68.18%

KUI BBA-IFP 21 30 3 54 49.09%

BBA-FB 12 30 3 45 40.91%

BBA- RMT 18 33 51 46.36%

The above table presents analysis of five institutions offering seven

programmes. It was found that common discipline domains offered across

programmes are Islamic finance and Shari’ah and Law by all institutions except

for UUM BMA (Bachelor of Muamalat administration). This indicated that there

could be Islamic finance courses classified as Shari’ah and Law. Quantitative

and ICT as well as Islamic Economics are the next component across 5

programmes and 6 programmes respectively. From percentage of Islamic

finance domains to total programme credits Lim Kok Wing showed the highest

percentage of 68% followed by IIUM, USIM. This finding is only an indicative

analysis of potential distribution and weights across domains as well as

significance of Islamic finance component across different types of

programmes.

The following figure presents a strong common frequency between

conventional and Islamic finance courses. In most programmes Islamic finance

courses are presented with higher credits as compared to conventional finance

courses. Despite the similar program nomenclature, an in depth analysis is

required to ascertain to what extent the courses do not duplicate the topics

across core and elective courses. Institutions that offer several Islamic finance

programmes from similar core and different electives combinations are also

rampant. This may not faithfully represent or distinguish between Bachelor in

Islamic Finance and Bachelor of Business Administration (Islamic Finance), for

example.

Figure 3.5: Programme Credits between Islamic and conventional courses

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Table 3.6 presents ‘domain curriculum related approach’ where specific

weights are identified with different types of degree programmes from

professional programme, specialization and concentration type programmes.

From a generic MQA MIF ‘programme curriculum based approach’ where

programmes are identified by disciplines. EPP7 proposed curriculum structure

as shown above is ‘domain curriculum based approach’ where programs are

identified by discipline domains.

The Islamic finance professional degree would be accredited by both MQA and

the professional body due to comprehensive learning experience required by

the profession as well as pursue independent academic research at

postgraduate level. The specialized degree on the other hand allows graduate

to be able to independently pursue academic research in the field of study. The

concentration only allows students to be familiar with the essential

components of the discipline if it is intended to be pursued as specialization at

the post graduate level. For the purpose of convergence a matrix could be

formalized to enable a ‘programme/ discipline/ domain curriculum based

approach’.

The following figure 3.6 summarizes the approaches towards development of

Islamic finance programmes. A step up approach which begins with program

aims and outcomes are followed through with determination of the discipline

and field of study followed by discipline domains as well as specialization in

respective sectors. These ultimately led to the selection of core and elective

courses. Variations of program structures and specializations are then traceable

through these steps. Furthermore at each step, Islamization of the discipline for

conventional core and elective courses are properly evaluated from

comparative perspectives, Islamic perspectives and worldview approaches

where relevant or applicable.

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Table 3.6: Comparative Programme Structures with Islamic Finance Domains

Bachelor in Islamic Finance

B.A. or B.Sc in Islamic Finance

BBA, B.Econs, B.Acc., LLB, B.Soc

Sc (Islamic Finance)

Programme Type Professional Degree with accredited

internship

Degree with Specialization with industry exposure

Degree with concentration

Programme Aim Islamic Finance professional

Islamic Finance specialization

Exposure to Islamic Finance

Programme Learning Outcome

Comprehensive Substantive Significant

Islamic finance core/elective

50% 40% 20%

Business/Economics related

30% 40% 50%

University 20% 20% 20%

Domains All core and elective All core + Prescribed electives

Prescribed core

Figure 3.6: An Integrative Approach to Islamic Finance programme Development

MIFER EMPIRICAL SURVEY AND RESULTS ON CURRICULUM

Malaysia has to its credit a creative dual banking approach to banking and

finance. There are several significant infra structure developments in Malaysia

such as the pronouncement of comprehensive dual legislations7 as well as

Shari’ah governance framework. However these developments need to be

accompanied by systematic efforts in the field of human resource development

for Islamic banking and finance industry. This has mainly taken in the form of

7 Financial Services Act and Islamic Financial Services Act 2013.

60

conferences, seminars, training workshops, training programmes for the

Islamic finance industry.

Since Malaysia made early strides in Islamic banking and finance since the

1960s; the emergence of Islamic finance soon followed by teaching and training

to match the expanding demands for expertise in Islamic finance in this regard.

The promulgation of MQA MIF Standard presents an opportunity for both

public and private tertiary institutions offering Islamic finance programmes to

attain the required standard to ensure quality design and delivery of the

programmes as well as to gain global Islamic finance community confidence of

Malaysia as Islamic Finance education hub.

Variation of teaching and learning of Islamic banking and finance in Malaysia

appeals to both students and working executives in both full time and part time

undergraduate and graduate programmes. Malaysian universities offer Islamic

Finance curriculum at four levels: (1) full-fledged degree programmes, (2) a

minor in Islamic banking and finance, (3) Islamic banking courses as part of

economics and/or Islamic economics package and (4) a single course in Islamic

finance. In this report, the focus is mainly for the public universities which offer

a full-fledged degree programmes in Islamic Finance. The programmes

available are further categorized under five domains as well as

quantitative/research methodology/ICT which are:

Islamic Finance/Finance.

Shari’ah and Law.

Islamic Economics/Economics.

Islamic Accounting/Accounting.

Islamic Management/Marketing or Management/Marketing.

Quantitative/Research Methodology/ICT.

FINDINGS OF MIFER SURVEY ON CURRICULUM

The following observations can be made from the survey:

All Islamic Finance programmes offered adopt the ‘programme based

curriculum’ approach in accordance to MQA MIF Standard.

Most programmes structure comprises higher weightage of Islamic

finance and Shariah/Law courses followed by quantitative and

economics.

Conventional finance courses are given almost equal emphasis with

Islamic finance. However the latter gain more importance in post

graduate programmes.

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Percentage of concentration for each discipline domain varies among

programmes without any specific guidance to programme type.

Courses offered in Bachelor programmes are relatively consistent with

MQA MIF as well as EPP 7 proposal

With regard to mode of delivery and assessment methods, it was found

that all programmes have similar assessment weights according to

degree levels.

MQA MIF STANDARD WITH CURRICULUM GUIDELINE

The extant MQA MIF Standard programme based curriculum not only caters for

both Muamalat and Islamic finance programmes but also Islamic economics,

Islamic accounting and Islamic management programmes. This approach

recognizes semi-professional degrees and specializations but did not address

the required domains within each degree. In the discussion of the body of

knowledge in terms of the various sectors which are banking, capital market

and Takaful, specific references were made to the sector relevant courses.

The outstanding issue of specification of relevant discipline domains and the

required courses to each programme type is not adequately specified in MQA

MIF.

With the proposal of ‘domain based curriculum’, a shift of emphasis from

‘programme based’ to ‘domain based’ is intended to focus on the required

courses from each discipline domain to determine the character of the

programme, that is profession, specialization or concentration.

As recommended by the ‘proposed programme structure’ there is a need to

distinguish as follows:

Bachelor in Islamic Finance, Bachelor of Science in Islamic Finance and

Bachelor of Business (Islamic Finance)

Bachelor in Islamic Finance is specified in MQA MIF using programme

based curriculum.

Based on the MIFER Survey both Bachelor of Science in Islamic Finance

and Bachelor Business (Islamic Finance) will confirm to MQA MIF and

hence are not significantly different though their programme names are

different.

Using the domain based curriculum approach, if different weights to

Islamic finance domain component can be specified in the curriculum to

guide the programme structure; the component of Islamic finance will

be consistent with the programme nomenclature.

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Hence the domain based curriculum approach provides more flexibility

as well as enable a more representative programme design from the

prescribed elective courses to be included from each domain.

As a more robust discipline domain based curriculum approach is

adopted, it will ensure that a professional degree like Islamic Economics

or Islamic Accounting must have the substantial courses from such

domains without over reliance on conventional courses.

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PART THREE: TALENT DEVELOPMENT

CURRENT STATUS AND INITIATIVES FOR IMPROVEMENT

RESEARCH BACKGROUND

Part three of this MIFER 2016 invovled with talent development,

initiative to enhance professionalism and expertise of those involve in Islamic

Finance Education. By talent this study means the educators who are involved

as teachers and researchers in the various domains under IF Education. The

purpose of the Talent initiative is to develop a pool of experts i.e. educators

with the right knowledge, skills and delivery competencies in the various

domains of Islamic finance education. This pool of qualified talent is a necessary

condition for building a formidable human resource base for Islamic Finance in

Malaysia and globally. Besides, achieving the vision of global leadership in IF

education implies having the best talent in this area. In order to achieve the

overall goal of developing a qualified pool of experts, the Talent initiative was

structured around three sub-projects which cover the scope of the envisaged

talent development objective. The sub projects are the following;

1. The database sub project – besides collecting relevant data about

educators involved in IF Education (in the various IF related domains),

the sub-project was also tasked to ascertain strengths, gaps as well as

overall distribution of IF Educators in Malaysian institutions of higher

learning.

2. The module writing sub project – in order to enhance the knowledge

and skills of IF Educators in line with the idea of continuous quality

enhancement, modules in all domains of IF Education need to be

prepared and offered to IF Educators. These modules would cover the

subject matter in the various IF domains in at least two to three levels.

3. The Continuing Education Programs (CEPs) – an extensive continuous

professional development programme called CEPs would be designed

and conducted throughout the year to enable modules from the various

IF Education domains to be offered to those from different domains, as

well as to enhance knowledge of one’s own domain.

With effect from January 2013, concerted efforts have been made to achieve

the objectives of the talent initiative under each of the sub projects. Some

highlights are given below for the respective sub projects.

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DATABASE DEVELOPMENT

The purpose of developing a database is to identify the quantity and quality of

individuals teaching Islamic Finance courses in Malaysia. The process of

developing this database started in 2013. This exercise has gone through a

number of phases and the framework is now in its third and final phase. The

generation of data sets according to different requirements is an on-going

activity which is an important activity for ICIFE in the future.

Phase I- January- December 2013

During a period of 9 months (January – September 2013), preliminary

discussions and internal discussions as well as pilot searches were carried out

which includes research assistants (RAs) carrying out online surveys of existing

talent from the various university websites. Information collected were; the IF

educators’ names, qualifications, courses taught and areas of research interest.

Thirteen (13) institutions including 10 IPTAs and 3 IPTS were covered in the

online survey. The total number of IF educators identified through that process

was 258, distributed through five domains as follows:

Islamic Banking and Finance 75

Shariah and Law 84

Islamic Economics 48

Islamic Accounting 28

Islamic Management and Marketing 23

This survey data provided the initial state of affairs with respect to the number

and expertise of Islamic Finance Educators in Malaysia. However, there were a

number of limitations which included the following;

a) Only 13 institutions were surveyed, leaving out many educators in the

un-surveyed institutions.

b) In some cases, incomplete staff information posted on the, making it

difficult to determine whether staff belongs in the pool of IF educators

or not.

c) Different reporting systems were used in different Universities. In some

cases, there was no online information, or if available, the information

was out dated.

Phase II- July 2013- June 2014

During this phase, the Talent development initiative team sought for other sources of information such as the Ministry of Higher Education database (MyMOHES). Assistance from the Ministry of Higher Education (MOHE) was sought after with information from its database for two reasons; first, to obtain data on the institutions that were left out in the survey; secondly to verify the

65

data obtained from the university websites. The rationale h was based on the assumption that all institutions in Malaysia are required to submit their staff details to MOHE.

The Ministry was kind enough to provide whatever they had, however officials

in charge of MyMOHES advised refer to the institutions for the most accurate

information, because the institutions are the sources of the data. The

MyMOHES list was not able to provide all the data sets required for the Talent

development initiative goals. Getting up-to-date data and avoiding unnecessary

repetitions (i.e. one individual could be listed several times under different

domains) were found to be major challenges.

Some of the the information collected from MOHE list were useful to improve

the website survey data. By June 2014, the total figure of IF educators increased

from 258 to 336. In addition, another five (5) institutions were included from

the MOHE list, bringing the total number of institutions to eighteen (18). The

distribution of talent by domains stood as follows by June 2014.

Islamic Banking and Finance 101

Shariah and Law 108

Islamic Economics 58

Islamic Accounting 35

Islamic Management and Marketing 34

Phase III- Since January 2015

Two approaches were adopted in this phase. The first approach is the

‘top-down approach’ was to seek the assistance of the Vice chancellors to

appoint representatives from their respective institutions to help with data

verification and other activities of ICIFE. The strength of this approach was the

individual University leadership would ensure that all data related to IF

education in their institution would be made available. This approach is rather

time-consuming, leading the Talent development initiative team to initiate an

alternative approach.

In July 2015, a second approach was initiated to obtain the information

required from ‘ICIFE representatives’ from each University, representing a

‘bottom-up’ approach. An ICIFE sponsored MIFER project was mooted. It was

to be a ‘3-in-1’ project and saw ICIFE commission and sponsor a comprehensive

study leading to the development of the Malaysian Islamic Finance Education

Report (MIFER). Data was collected for three components; curriculum, talent

and programs. A total of thirteen (13) institutions participated.

For the talent part, a specific template was designed to explain to the

researchers and data collectors the requirements for talent. By December

66

2015, all the 13 institutions had returned the templates. Part of the analysis

has been done and preliminary results are provided in this report. It should be

noted however that, for the institutions which did not participate in phase 3,

we have carried their data as it stood in phase 2.

General Criteria for categorization of experts into the domains

Previously, the way academics were distributed into the different domains was

left to the individual academic, based on what he or she put as their

specialization. For instance, someone with a Law degree could state Islamic

Finance/Investment specialization when a more accurate specialization would

have been Islamic Finance Law or Fiqh related to Islamic Banking/Finance. In

addition, a further complication arose due to the double and possible triple

counting of experts when these same experts were categories to more than

one specialization, of which they were not in their own academic background.

Faced with this challenge to secure accurate data and information on IF Talent

in this final phase, subsequent categorization of individuals into the domains as

per the the following combined criteria:

Qualifications of the person. The first degree as the primary basis for a

person’s placement. For example, a person with a first degree in

Accounting belongs to the Islamic Accounting domain. However, in

cases where a person’s first degree was 50-50 in two domains, such as

Bachelor of Shariah (Shariah and Economics); the second qualification.

If it is a Master’s degree in Economics, that individual was placed in the

Islamic economics domain.

Research. For senior experts, who hold academic qualifications that are

not in any of the domains or those who studied conventional fields, their

placement to domains followed their respective research areas. For

example, if a person has qualifications in Statistics and Mathematics

(from Bachelor to PhD), his/her research and courses taught, will

determine his / her placement to a relevant domain.

Publications. The individual’s publication records over the last 5 years

will be viewed. In some cases, it is possible to find someone whose basic

degree or even graduate degree was not in their area of specialization,

yet he/she had published articles and books in that domain.

Many institutions submitted experts who neither held the relevant

qualifications (degree in Islamic heritage related to IF or Islamic perspectives of

conventional disciplines) nor involved in Islamic Finance. Based on the analysis,

we excluded these experts would be excluded, since the purpose of this

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database is to identify experts who are contributing in the field of Islamic

Finance education. For example, a person who has qualifications in Syariah

(Bachelors to PhD) or conventional accounting, management, etc., but did not

do research related to IBF, would be excluded even if he/she claimed IF to be

their specialization. However, due to human resource constraints, some of

them were asked to teach in IF related areas. More analysis is needed to

ascertain other informal post-doctoral qualifications or experience that may be

considered favourably. For example, much more emphasis needs to be given

on ascertaining the ‘quality’ of the IF Talent. There exist a possibility that

Universities with many IF educators or with many in a certain domain, may not

be the ‘best’ in terms of quality.

As of December 2015, the total number was 402 and the distribution of Talent

according to domains are as follows:

Islamic Banking and Finance 112

Shariah and Law 121

Islamic Economics 64

Islamic Accounting 44

Islamic Management and Marketing 61

Talent Distribution by University and Domain

The next task was to arrange this talent pool according to various combinations

for purpose of further analyses. The distribution according to University and

domains is given in Table 4.1. It should be stated here that these figures are still

being updated. For example, in some Universities, information is only available

from a certain Faculty, although the IF related course and even specializations

are being offered. This is a very important area that requires further attention

by ICIFE in the coming year.

Table 4.1. Distribution by institution and domain IBF SH+LW IS EC IS ACC IMM TOTAL %

IIUM 10 32 12 8 10 72 17.9

UiTM 0 7 3 0 2 12 3.0

UKM 4 13 8 1 0 26 6.5

INCEIF 9 7 9 2 0 27 6.7

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UUM 18 22 8 7 14 69 17.1

USIM 8 7 6 11 6 38 9.5

UPM 4 1 0 0 1 6 1.5

UM 15 9 3 2 6 35 8.7

USM 3 0 4 1 8 16 4.0

UniSZA 9 14 1 1 0 25 6.2

UNIMAS 3 0 3 0 0 6 1.5

INSANIA 5 3 3 5 9 25 6.2

KUIS 9 0 0 1 0 10 2.5

UNIMAP 2 0 0 0 0 2 0.5

UMK 6 3 1 5 2 17 4.2

UMP 0 1 0 0 2 3 0.8

UMT 1 0 1 0 0 2 0.5

UTM 1 0 2 0 1 4 1.0

UMS 5 2 0 0 0 7 1.7

TOTAL 112 121 64 44 61 402 100.0

Observations on talent distribution by domain

The current state of Malaysia’s IF talent in Universities sees more Shari’ah and

Law experts. At least 30.1% belong to this domain. The IBF domain has less

experts standing at 27.9%. Even this may be understated as quite a few experts

who claim IBF credentials in actual fact have undergraduate and graduates

degrees in Shari’ah. Other domains such as economics, management and

accounting are much smaller. A possible implication of this type of talent

distribution is that the degrees programs are more legalistic in nature i.e.

teaching more Shari’ah and Law than finance. This may be acceptable if the

programmes are meant to have a ‘specialization’ in Shari’ah and Law or if the

programmes are offered in Shari’ah/Law faculties.

However, as seen from the first part of this report, the majority of IF

programmes are focussing on banking and finance. Naturally, one would expect

the curriculum to reflect more emphasis on banking and finance, economics,

management and accounting and hence, a bigger number of educators who are

qualified with banking and finance qualifications, but from Islamic perspectives.

From above, this is not the state of affairs most academics in banking, finance,

economics, management and accounting come from conventional

backgrounds, with varying degrees of exposure to the Islamic heritage.

The existence of a situation where the people teaching Islamic Finance may not

have sufficient exposure to modern finance and related areas (i.e. those with

Shari’ah and law backgrounds) or to Islamic heritage (conventionally discipline

exposure). The implication of this could be a mismatch of what is being taught

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in the academic programmes and what is required of an Islamic Finance

curriculum and graduate. As stated by a senior executive from the IF industry

in one of the focus groups sessions conducted in 2013, some IF graduates do

not seem to have sufficient knowledge of finance.

In some institutions, there are no experts in certain domains. This begs the

question ‘who teaches their students the subjects in those domains?’ Could

there be a danger of producing graduates with less than the minimum

requirements? More often than not, those who have no qualifications and/or

exposure to Islamic perspectives of economics, finance, management or

accounting are asked to teach these courses using materials that have been

prepared by their colleagues. Hence, educators become mere ‘conveyors of

others’ knowledge’ and facilitators of knowledge rather than being genuinely

qualified as Islamic finance educators. This fact supports the earlier statement

that the demand for IF graduates clearly outweighs the supply leading to a high

demand of IF educators that cannot be met currently with the talent available.

Both short-term and long term solutions to this gap need to be found.

Distribution by University and Seniority/Position

Next is the distribution according to seniority/age/position which is a very

important factor that will contributed to the quality of graduates. It has a very

important impact on the future of IF Talent and would provide a preliminary

picture of Human Resource planning for the individual Universities as well as

identifying strengths and limitations in different Universities. The distribution

according to seniority is given in Table 4.2 below.

The following are a number of observations and insights into the current state

of affairs. As with the previous section, more detail analysis needs to be carried

out.

Table 4.2: Distribution by Institution and Position Prof Assoc. Prof Asst. Prof / Sen. Lecturer Lecturer Others

Total

IIUM 17 20 30 4 1 72

UiTM 1 4 2 5 0 12

UKM 1 5 11 9 0 26

INCEIF 15 6 2 1 3 27

UUM 4 10 42 12 1 69

70

USIM 5 4 25 4 0 38

UPM 1 1 3 1 0 6

UM 3 6 26 0 0 35

USM 0 1 10 5 0 16

UniSZA 0 4 10 11 0 25

UNIMAS 1 0 0 5 0 6

INSANIA 0 2 3 20 0 25

KUIS 0 0 1 9 0 10

UNIMAP 0 0 0 2 0 2

UMK 1 2 3 11 0 17

UMP 1 0 0 2 0 3

UMT 0 1 1 0 0 2

UTM 0 1 3 0 0 4

UMS 0 0 1 5 1 7

TOTAL 50 67 173 106 6 402

Observations on talent distribution by seniority

Overall, at least 72.1% of the existing pool of educators hold PhDs and are

ranked as Assistant professors (senior lecturers) and above. This speaks well for

the discipline and means that there is a basic ‘quality’ requirement that is met

for IF Talent in Malaysia. However, the distribution of these senior talents is not

so wide-spread.

A significant number of educators (27.8%) are master’s degree and first degree

holders (Columns 6-7). In some ‘newer’ institutions, it is this group of educators

that dominates. This has its pro’s and con’s. On the one hand, the downside is

the teaching is being handled by those with less experience. The upside is that

there is still a huge potential to provide relevant further education to these

educators. It is good to note that most major universities are insisting that all

educators obtain a PhD to be considered ‘qualified’. However, it is

recommended that all institutions should have proper strategies and plans for

further studies for these younger educators.

There are few professors amounting to only 12.4%. Besides these professors

are concentrated in only two institutions, 34% being IIUM staff while 30% are

INCEIF staff. Together, these two institutions have 64% of all professors

engaged with IF education in Malaysia. These statistics suggest that many

institutions rely on academic staff at the rank of Assistant professor / senior

lecturer (and below), because of the deficit they experience at higher levels

(professor and associate professor).

71

It should be interesting to cross tabulate these staffing figures with the

programs offered at the various institutions in order to recognise the volume

of work performed by the different staff categories at the respective

universities.

Distribution by Seniority, Gender and Domain

Another relevant dimension observed is the issue of gender distribution

according to domains and seniority. This is increasingly important as the global

trend in higher education has seen an increase in female students. The same

trend applies in Malaysia. This dimension gives some insights into the career

options taken by these female students, specifically how many choose to

become academics.

A more elaborate depiction of the male-female distribution is shown in figure

4.1, based on total number of academic staff in their respective academic

positions.

Figure 4.1: Talent distribution by gender and position

Table 4.3. Distribution by Seniority, Gender and Domain

DOMAIN

IBF

SH+ LAW

IS ECON

IS ACCT

IS MGT

TOTAL

M

F

M

F

M

F

M

F

M

F

M

F

0 10 20 30 40 50 60 70 80 90

Professor

Assoc. Professor

Asst. Prof / Sen Lect

Lecturer

OthersFemale

72

Professors 10 2 7 2 10 4 3 2 6 0 36 10

Assoc. Prof

8

5

18

4

3

6

2

4

5

2

36

21

Asst. Prof. / Sen. Lecturer

21

18

37

9

16

8

4

7

7

8

85

50

Lecturer

14

18

23

9

2

7

4

8

11

10

54

52

Others

2

1

1

0

0

1

1

0

0

0

4

2

TOTAL

55

44

86

24

31

26

14

21

29

20

215

135

Observations on talent distribution by seniority, gender and domain

The above Table 4.3 shows is a matrix illustrating the distribution of IF

educators in three dimensions; seniority, domain and gender. It shows that the

majority of IF educators (61.4%) are male i.e. 215 out of 350. The gender

distribution through the domains demonstrates male staff dominance, except

in accounting where there are more female educators than their male

counterparts (21 against 14). It would also be interesting to see if the same

pattern exists for conventional Finance and related domains.

However, the figure for lecturers is almost the same for male and female (54

versus 52), indicating that the newer IF talents are female. Coupled with the

fact that there are already more female students compared to male students

in Universities and in IF programmes, this phenomenon must be taken into

consideration by University authorities.

There is a huge gender gap in the Sharia and law domain. 78.2% of all educators

in this domain are male, with only 21.8% being female. It would be interesting

to have a more detailed study to find out why this is the case, when female

students outnumber the males. The Male-Female gap in other domains would

likely disappear as newer batches of lecturers are taken in.

Overall observations about the database findings

The current study is onthe data collection and distribution to only 5 domains.

In curriculum planning, it was proposed to consider two other potential

domains of IF education namely: Quantitative/ICT/Research Methods (QICT)

and Islamic Heritage. However,the idea to include the two additional domains

was shelved due to the practical difficulty of determining in the database from

among the educators in QICT and Islamic heritage despite, the talent team sees

the additions as important for future reports. For example, the development of

IF curriculum must be an ‘integrated’ curriculum, one that brings together in an

‘organic’ manner, al-turath al-Islamiyya or Islamic heritage and modern

73

knowledge. The former has to be more than just the legal aspects of the

heritage if a comprehensive presentation of the Islamic worldview is to be given

to graduates that includes the civilizational aspect of Islam

The categorization of educators into domains follows the individual’s

qualifications, starting with first degree, masters and then PhD. Some

institutions however argue that for them, the person’s highest qualification

determines the domain. The study choses to apply lower qualifications as the

basis for categorization since the first degree, second degree etc. in that order

give a person a much stronger foundation in his / her field than the later

qualifications. Nevertheless, more discussion is needed to fine-tune the

domains and the categorization of IF Talents.

Those persons or experts who do not teach or have any expertise in IF

education has been to eliminate since they do not fit the requirements for IF

educators. However, ‘other’ criteria that may be used to designate IF Talent

need to be considered and more work needs to be done to fine-tune the

framework.

There is still a possibility that even with the approach adopted by assigning

University researchers to collect data, not all data has been captured. Case in

point include the University Malaya where the data collector submitted names

from the Academy of Islamic Studies only, ignoring other potential faculties

such as the Faculty of Economics and Administration and the Faculty of

Business and Accountancy. For 2016, these omissions will have to be rectified.

MODULES DEVELOPMENT

The objective of developing modules is to improve the quality of existing IF

educators through continuous education training (programs) to equip them

with more knowledge in the various domains. There is broad consensus on the

view that a good quality IF educator is one who has the following two features:

a) A strong mastery of his / her own domain or area of expertise

b) A fair understanding of the other domains which are part of the IF

program structure.

c) Since the educator is dealing with ‘Islamic’ finance, there is an implicit

recognition that IF educators must also be exposed to ‘knowledge and

curriculum integration’.This requires ‘mastery’ of Islamic heritage as

well as ‘mastery’ of conventional/modern knowledge.

d) A certain degree of exposure to how the IF industry works, i.e.

knowledge of IF practice

74

Currently, if an IF educators comes from a modern discipline background,

he/she would have little or no exposure to Islamic heritage, let alone any

‘mastery’ of Islamic heritage. Similarly, if one comes with an “islamic heritage’

background, one would have almost no exposure to modern disciplines. In

addition, most educators know one branch / or domain of knowledge but are

deficient in the others (an economics educator will have very little exposure to

accounting). These limitations constrain IF educators’ ability to integrate the

knowledge during their teaching. This deficiency has implications on the quality

of the graduates being produced from our institutions.

The module writing project was therefore initiated to close this gap by

producing Continuing Education (CE) modules which will help educators in two

fundamental ways;

1) To enable them learn / acquire knowledge about the other domains within the IF programs

2) To streangthen themselves in their own domains, through taking contemporary courses in their own areas.

Arrangements for commencement of the module development exercise

started with a workshop held at UUM in July 2013. An expert from IBFIM8

explained to the participants what the module development process would

entail. Based on the ideas from this discussion, the Talent initiative developed

standard operating procedures (SOP) to guide the module development

process.

The figure below (Figure 4.2), illustrates the procedure. It was developed to

work as standard guide to be followed by EPP7 in its module development

process. Briefly, a module goes through a cycle which involves a Module writer

developing a draft module following a standardized format. The draft module

is sent to a reviewer, an expert in that field to assess the quality of the module

and its suitability for training IF educators. Once the reviewer has sent his

comments and suggestions, they are passed back to the module writer to

modify and make the necessary corrections. Draft 2 is again sent to the

reviewer to evaluate it in view of his / her earlier comments and grade it on a

scale ranging from ‘Excellent to Very poor’. The module is once again returned

to the writer after the second review for further corrections. The 3rd draft goes

for a lab review. At this stage, the module is presented and assessed by another

reviewer (lab reviewer), who is also an expert in this field. After this session,

the writer makes final corrections and submits the completed version of the

module which is forwarded for printing.

8 Islamic Banking and Finance Institute Malaysia (IBFIM) is an industry-owned institute dedicated to producing well-trained, high competence personnel and executives with the required talent in the Islamic finance industry.

75

In addition to learning about module development, participants at the UUM

workshop discussed potential modules that could be written / offered to the

educators. 70 module titles were generated across the various domains as

follows;

Islamic Banking and Finance 17

Shariah and Law 7

Islamic economics 14

Islamic Accounting 6

Islamic Management and Marketing 13

Quantitative methods and ICT 13

Total 70

Other workshops which took place in Kuala Lumpur at Flamingo hotel (5th and

6th 0ctober, 2013) and Kelab Darul Ehsan Ampang (22nd and 23rd October, 2013)

respectively, facilitate to fine tune the topics and develop the relevant outlines

for the identified topics. By the end of the year 2013, preparations had been

completed and Talent initiative was ready to start the module writing exercise.

The exercise has gone through two phases so far.

Phase I - February- December 2014

The first phase of module writing started off in February 2014. The process

began with a public invitation for proposals to all members / experts who had

participated in our workshops. Initially, 20 module titles were selected to be

developed in this phase.

A one-day workshop was organised for the potential module writers on 18th

February 2014. During this workshop, the potential module writers were taken

through the guidelines, and full process of writing modules. The purpose of this

interaction was to clarify what was required and expected, as well as

standardise the way of writing. The writers were requested to sign contract

documents if they agreed with the terms and conditions. Only 11 signed the

contracts and subsequently 10 modules were the only ones which were

developed in this phase. The table below summarizes the modules developed

and completed during this phase.

76

Figure 4.2: SOP for Training Modules Development

77

Table 4.4: Modules completed in phase I

Module title Domain

Introduction to Islamic financial management IBF

Fiqh Muamalat and its application to banking and finance SH + LAW

Fundamentals of Islamic Economics ISL ECON

Introduction to Islamic Financial Accounting and Reporting ISL ACC

Auditing and governance for Islamic financial institutions ISL ACC

Functional areas in Management from an Islamic perspective IMM

Fundamentals of marketing from an Islamic perspective IMM

Operations Management from an Islamic Perspective IMM

Introduction to Statistics QM

Introduction to Financial mathematics QM

Observations on modules development in phase I

a) Although a robust Standard Operating Procedures (SOPs) was designed

with a set clear timelines for both module writers and reviewers but the

process of module writing during this phase was very slow. Delays were

from module writers and reviewers, who failed to observe the

scheduled timelines. Consequently, instead of taking the projected six

months to complete, the first phase went on for the whole year 2014.

b) There were quality issues raised by module reviewers which were very

important observations for purposes of improving the exercise.

Informed by those issues and observations, Talent initiative had to

change the strategy of selecting module writers in subsequent phases

in order to ensure that only good quality modules are produced.

Phase II - March 2015 to date

In order to avoid the setbacks faced during phase I, Talent initiative made

adjustments to the standard operating procedures (SOP). The number of drafts

required to flow in the cycle between module writers to module reviewers was

reduced from two to one. The lab session was also brought forward. In the new

arrangement, the lab session is conducted at the first draft, instead of coming

later after the second review.

Secondly, Module writers were specifically identified and invited, as opposed

to posting a general announcement. In this “targeted” invitation of module

writers, care was taken to identify the best persons in their own fields. This

phase commenced in March 2015. However, due to using the targeted

identification approach, few experts could be identified and even fewer were

ready to write modules. At the start, 10 experts were invited and a workshop

78

to discuss the writing procedures was conducted for them on 30th March 2015.

Only 5 of the invited potential writers signed the contracts and the table below

shows the 5 modules which have been written during this phase.

Table 4.5: Modules for phase II

Module title Domain

Strategic Management from an Islamic Perspective IMM

Total quality Management for Islamic financial institutions

IMM

Islamic capital markets IBF

Islamic Banking Operations IBF

Accounting for Islamic financial Institutions IS ACC

Observations on modules development in phase II

a) Generally, module writing is an expensive and time consuming exercise.

Talent initiative suggests that the year 2016 be devoted to CEPs, using

the written modules and even the unwritten modules.

b) Most of the written modules so far are in the management and

marketing domain (5 modules out of 15). In some domains like Sharia

and Law, and Islamic economics, only 1 module each has been written

and completed. This is because; there are less experts willing to write

modules in these domains.

CONTINUOUS EDUCATION PROGRAMS (CEPs)

The ultimate purpose of developing modules was to apply them in training

sessions for the IF educators as explained under section 4.3. However, as the

process of developing training modules got underway, the Talent initiave

started an an interim arrangement to address the problem of knowledge gaps

among IF educators by organising continuous education programs (CEPs) using

the unwritten modules. This exercise was first conducted with a one-day

training program on 30th December 2013 on the topic “Islamic Intellectual

Heritage: Relevance for Islamic Finance Educators” held at ISTAC–IIUM. The

experiment was intended to gauge how such trainings would be conducted and

what it takes to manage the programs.

What the CEPs have to address

Effective CEP training under this initiative is expected to achieve the following

objectives:

a) Fill the knowledge gaps for the IF educators. Educators who are

qualified in one domain, e.g. Shari’ah, but may need to learn some

79

elements of finance or economics to enable them deliver better in their

Shari’ah classes.

b) Provide contemporary knowledge to experts in their own domains.

Knowledge is always evolving. CEPs are expected to provide educators

with an opportunity to share and discuss contemporary issues in their

own disciplines by taking advanved CEP courses in their own domains.

c) Demonstrate the integration of knowledge. During CEPs, educators will

usually go through exercises, case studies etc, that demonstrate the

integration process. This will motivate them to do the same in their own

classes.

Why the CEPs have not taken place

Although Talent initiative had planned to begin conducting CEPs with effect

from 2014, practically, there has been very little success. Reasons for this

situation were the following:

a) Participants to the CEP sessions were required to pay a fee. The

assumption was that the respective institutions would release and

sponsor their staff to attend the CEP sessions. Unfortunately, this did

not happen because the institutions did not commit themselves on this

issue.

b) Lack of professional incentive. What would a participant get in return

for attending the CEP training? Does he / she get some professional

points? What does one lose by not attending the CEP? Apparently, these

questions on the motivation for attending CEP remain unanswered.

Moving forward

Talent initiative through the EPP7 committee has suggested several measures

to ensure that CEPs happen during the year 2016. The suggestions include the

following;

a) Work with AKEPT which is the official government entity responsible for

training. A memorandum has been signed between ICIFE and AKEPT for

the latter to incorporate our CEPs into their annual training calendar.

b) The written modules which were graded good and above will be used

to begin continuous education programs (CEPs).

80

c) In 2016, more attention will be given to CEP training than module

writing. It is through CEPs that IF educators will get to improve their

knowledge and capacity for delivery.

d) In the proposed ICIFE Act, professional accreditation is proposed to be

done for IF educators. One of the requirements for this accreditation

will be the CEP sessions a person attends during the year. This will help

to answer the question of professional motivation.

Planned CEPs for 2016

Table 4.6: Planned CEPs for 2016

Domain Proposed topics

BF

Islamic Banking system and operations

Islamic capital markets

SH + LAW

Fiqh Muamalat and its application to banking and finance

Islamic Financial Services Act (IFSA)

ECON

Islamic economics: Fundamentals, System and Features

Money, Banking and the Islamic financial system

ACC

Introduction to Islamic Financial Accounting and Reporting

Accounting for Islamic financial Institutions

MM

Operations Management from an Islamic Perspective

Fundamentals of marketing from an Islamic perspective

OTHERS

QICT ISL HERITAGE

Introduction to Statistics

Introduction to Financial mathematics

Islamic Intellectual Heritage: Relevance for Islamic Finance Educators

Islamization of knowledge: Its application to economics and finance

81

GENERAL CONCLUSION AND STRATEGIC DIRECTION

GENERAL CONCLUSION

We summarize our main finding from the three studies in this section. For

purposes of easy reading and connection with each of the studies, we present

these findings in three parts, following the structure of the report. Based on

these conclusions, we then make some policy suggestions and provide our

thoughts on the possible strategic direction for Malaysia.

PART ONE: PROGRAM AND EMPLOYABILITY

Summary of major findings on programs study

MIFER is a maiden report on Muamalat and Islamic finance education in

Malaysia. This report provides a comprehensive analysis of the MIF programs

offered by public universities and private higher institutions as well as in

assessing the quality of MIF graduates to meet market demand. The prevailing

issues motivating this study are (i) the actual number of MIF program offered

by each universities in terms of five domains; (ii) the absence of accurate data

on supply and demand of MIF graduates; (iii) the gaps between the skills

acquired by graduates and the expectation of market players.

In order to obtain the complete information on the status of MIF education in

Malaysia, this study involved participation from all 11 public universities and

three private higher learning institutions. There were 33 academic

representatives, 193 MIF graduates and 40 employers of MIF graduates

providing vital data and information for this study. Beside the academia, further

support was provided by the Ministry of Education, Ministry of Finance and the

central bank, Bank Negara Malaysia. The MIF education encompasses diploma,

bachelor degree, master and PhD consisting of five domains namely Shariah

and Law (Muamalat), Islamic finance, Islamic Economics, Islamic Accounting

and Islamic Management.

There are several negative gaps between skills acquired by the MIF students

and the expectations levels of industry players. Except for proficiency in Malay

language in which the MIF graduates excel, the negative gaps are in other skills

such as interpersonal, computing, enterprise and entrepreneurial,

communication, thinking, managerial, English and Arabic languages. However,

these negative gaps are small which indicates that additional efforts could

rectify the gaps and improve further the quality of the MIF graduates. While

the current focus is on Islamic finance, other domains such as Islamic

82

accounting, Islamic economics and Islamic management need to provide

talents highly required by the market.

Feedbacks from the practitioners and market players indicate that MIF

graduates should not focus on being employed only in Islamic banks since the

advance of Information technology and e-commerce reduce manual jobs.

Therefore, it is imperative that universities incorporate in their MIF programs

value creations and entrepreneurial platforms to enable graduates to get

employment in other financial services industry and other sectors of the

economy.

PART TWO: ISLAMIC FINANCE CURRICULUM

Summary of major findings on curriculum study

The preparation and submission of this report involves a process of re-

examination of extant MQA MIF standard as well as proposing a guideline to

enhance the Islamic Finance curriculum development process.

Though MQA MIF standard was promulgated, it is compared with EPP7

initiative to introduce guidelines on courses, learning outcomes and

assessment in each discipline domain. However significant efforts to proposed

learning outcomes for each domain are suggested in three focus group

meetings that culminate in the Global Round Table Discussions. Similar exercise

could be extended to Diploma and Master Degree courses.

The MIFER Empirical survey which was intended to capture the current

practices among public universities in Malaysia show a relatively common

compliance trend with MQA MIF despite different nomenclature. This raises

some concerns on whether the programme name and structure are consistent

and coherent. The study could be extended to other ICIFE member countries to

understand global practices among participating member countries.

With the above considerations the report would recommend to consider an

‘integrative approach’ which adopt MQA MIF programme based curriculum

complemented by discipline domain based curriculum guideline. This requires

harmonization of programmes and domains with the required core courses and

electives from each domain.

83

PART THREE: TALENT DEVELOPMENT

Summary of major findings on the talent study

The state of affairs with respect to existing pool of talent for Islamic Finance in

Malaysia shows that the country has a fair number of well qualified educators.

The highest numbers of these educators (38.6%) are at the level of Assistant

Professor / Senior Lecturer. This is closely followed by the category of Lecturers,

currently representing 30.3%. In terms of domain distribution, the majority of

current educators fall in the Shari’ah and Law domain (31.4%) followed by

educators in the Islamic Banking and Finance domain at 27.7%.

Efforts to developing modules for training Islamic Finance educators has also

been very educative. In phase one, only 50% of experts who expressed interest

with writing modules actually did so. Some declined to sign the contracts, while

others signed the contracts but dropped off along the way. The situation was

similar in phase two. We also discovered that academicians are constrained

when it comes to meeting tight deadlines. During phase one, the projected time

for modules development was doubled. It took a whole year (2014) to complete

the 10 modules in that phase. From the study, it is not viable to wait for

modules to be written in all domains. Instead, CEPs should run concurrently

with the module writing exercise.

There were several attempts made at conducting CEPs with effect from the

second half of 2014 and during the year 2015 but with very little success. This

is mainly due to lack of motivation on the part of the lecturers. At the moment,

CEPs are not mandatory on IF educators. Secondly, participating in CEPs does

not give additional advantage to the educators, such as professional

development points that could lead to promotion. These are some of the issues

that have hindered successful implementation of CEPs.

84

POLICY IMPLICATIONS AND STRATEGIC DIRECTION

PART ONE: PROGRAM AND EMPLOYABILITY

Policy Implications from the programs study

The above findings imply some introduction of new policies with respect to

Muamalat and Islamic finance education.

i. Policy on program

The heavy concentration in Islamic finance programs should be balanced with

greater intakes in much needed man power in Islamic accounting, Islamic

economics and Islamic management domains. It is recommended that Ministry

of Education and MQA to have a policy to facilitate approval of new programs

in these three identified domains. Therefore, public universities which are

trusted as suitable MIF program providers should take this opportunity and be

given priority to manage the programs in the most holistic way in line with

Shariah principles. This is supported by the feedbacks from industry players and

organisation to further enhance employability of MIF graduates from public

universities.

ii. Policy on student intake

Relevant ministry and universities should have a policy on student intake into

the MIF programs especially in Islamic finance domain which currently is

adequate to meet the industry demand. Further increase in intakes into this

program might cause over supply of graduates and thus creates employability

problems. Conversely, the ministry should increase the allocation quota for

other domains in MIF programs to support government’s target of achieving

54,000 students by 2020.

iii. Policy on Program Approach and Curriculum Design

Currently there are three approaches namely stand-alone approach,

specialization approach and combination approach. It is recommended that the

relevant ministry encourage MIF program in specialization approach and

combination approach which is currently are a few in number. This is to

promote faster growth of establishing new programs since stand-alone

approach takes a longer time to develop. Innovative approaches should be

incorporated in terms of industry participation in the teaching and learning

method of delivery. More community based assignments and marketing inputs

are essential in curriculum design. These approaches will enrich and create

value added in learning outcomes for MIF students.

iv. Policy on Niche Area and Branding

85

Since there are eleven public universities which are MIF program providers, it

is suggested by the expert group that each university should champion one

niche area which could lead to a certain type of branding. This branding could

be an effective marketing tool for promotion of MIF programs worldwide.

Overall, the growth of Islamic finance market is expected to outperform the

conventional market due to its profit and loss sharing principles and ethical

investment guided by Shari’ah rules. There is also an increase in the application

of Islamic financial instruments which provide cushion against volatilities in

conventional financial markets. In line with this future growth, the need for MIF

talents is expected to be higher locally and globally. Therefore, the quest for

high quality MIF programs, graduates and up to date curriculum design is an

on-going process. It is recommended that MIFER should be a continuous,

periodic study to provide all stakeholders of Islamic finance education the

valuable and accurate information for future strategic decision.

PART TWO: ISLAMIC FINANCE CURRICULUM

Policy Implications from the curriculum study

With the promulgation of MQA MIF Standard and from the findings of EPP7

Project, the following policy recommendations are proposed as follows:

i. Periodic review of MQA MIF Standard is needed to facilitate effective

and timely guidance to educations institutions offering Islamic finance

programmes with reference to EPP 7 curriculum guideline on discipline

domains.

ii. MQA MIF Standard which is discipline based program specialization

standard that adopts ‘program based curriculum’ need to consider

‘discipline domain based program’. The latter approach recognizes the

courses as well as the learning outcomes and content for each discipline

as the body of knowledge to be adopted in the context of each sector

specialization. For example Islamic financial system is a course in the

domain of Islamic finance as a discipline to be adopted as discipline core

course in the Islamic banking program specialization.

iii. With MIF MQA Standard consideration of ‘discipline domain based

curriculum’ a more flexible approach to include a wider variety of

Islamic finance program types that range from professional

qualification, degree specialization to degree concentration can be

determined. This provides clarity to programme nomenclature to

distinguish Bachelor in Islamic Finance from Bachelor of Science in

Islamic Finance and Bachelor of Social Science (Islamic Finance).

86

iv. The MQA MIF five common courses which emphasize the foundations

Islamic belief and ethics; Islamic jurisprudence, legal maxims and law

need to be introduced as independent courses for undergraduates and

as integrated module(s) at post graduate levels.

v. Detail specification of each discipline domain courses, learning

outcomes and topics as well propose delivery and assessments

proposed by EPP 7 project need to be harmonized with MQA MIF Body

of knowledge to enable a consistent and more representative design

and delivery of each discipline stand alone or combined specialization.

vi. Though both MQA MIF and EPP 7 recommendations recognized both

Islamic and conventional courses to be included in a single Islamic

discipline domain, no specific mention was made on the recognition

approach or basis. In this regard the recognition basis for conventional

courses should consider whether the approach is comparative or/and

from Islamic perspective in theory or/and practice.

vii. Interdisciplinary discipline domain considerations need to be

considered in program structure and pre-requisites to develop the

Islamic finance courses. At the same time program design towards a

multidisciplinary program aims and learning outcomes can also be

specified.

PART THREE: TALENT DEVELOPMENT

Policy Implications from the talent study

i. Moving forward, the following are propose for considerations in the

policy and strategic direction of Malaysia, as the country seeks to be the

global hub of Islamic Finance education.

ii. The number of educators should be proportional to the national targets

for enrolment and graduates coming through Islamic Finance programs.

The current figure of 350 educators is on the lower side, with all

domains (except Shari’ah and Law), having less than 100 educators.

Indeed our study discovered that in some institutions, there are no

educators for some domains. These gaps require urgent action.

iii. It is also suggested that more educators need to be in the domain of

Islamic Banking and Finance, rather than in Shari’ah and Law. This is

logical, because in all IF programs, the component of banking and

finance is more than Shari’ah and Law. The current talent statistics show

that we have more Shari’ah and Law educators than finance educators.

87

Efforts need to be made so that in future, the number of educators

available at any time reflects the curriculum requirements.

iv. Module development, despite the challenges should be supported.

More experts need to be encouraged to participate in the exercise. The

presence of written modules will in the long run make it easier to train

IF educators. Besides, the written module is convenient to use for an

educator who comes from one domain to train in another domain.

Given the time pressure they have, trainees would be happier to read

through the module notes, than asking them to go and find out by

themselves (as would be the case if the module was not written).

v. Ultimately, the real upgrade for IF educators will happen through

Continuous education programs (CEPs). Institutions need to support

this process by sponsoring their staff to participate in CEPs. We suggest

that in 2016, greater attention should be focused on CEPs, using both

the written and unwritten modules. It is important to continuously

equip educators with the relevant knowledge and skills. This is one of

the things that will keep Malaysia on top of the game.

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