The Rise of Sharia Investment in Indonesia
Sharia investment has been experiencing a surge in popularity, and Indonesia is no exception. The Sharia capital market, in particular, has witnessed significant growth. Data from the Jakarta Stock Exchange (IDX) reveals a staggering 90.3% increase in the number of Islamic shares, from 237 in 2011 to 451 by October 27, 2020. This impressive number translates to 63.6% of total listed shares.
Sharia investment in the form of sukuk (Islamic bonds) is also showing positive signs. According to Bank Indonesia, sukuk-based Islamic financing is projected to grow at a rate of 9.8% between 2021 and 2026. This growth is even more remarkable when compared to the projected global Islamic IKNB (Islamic financial services industry) growth of 4.8% for the same period.
This remarkable rise in Sharia investment highlights the growing interest among both Indonesian and international investors. To ensure continued development in this sector, fostering knowledge about Sharia investment and its core principles is crucial. Understanding the importance of Sharia-based investment will be key to its future success.
So, Why Should We Start With Sharia Investing?
Also Read:
Islamic Economic System and the Prohibition of Interest (Riba)
Bunga Bank Samakah dengan Riba?
The Concept of Investment in Islam
The concept of investment in Arabic is termed by the word إستثمر” which means to produce. For the definition of Sharia investment itself is a productive activity that is profitable from the point of view of Islam, and can be a profit or loss when viewed on the economic side, because it cannot be separated from the uncertainty (uncertainty loss) in human life and must be carried out in accordance with the rules of Islamic law.
Imam Al-Ghazali also emphasized “That profit is a compensation for travel fatigue, business risks and threats to entrepreneurs”.
Legal Basis of Sharia Investment
مَثَلُ الَّذِيۡنَ يُنۡفِقُوۡنَ اَمۡوَالَهُمۡ فِىۡ سَبِيۡلِ اللّٰهِ كَمَثَلِ حَبَّةٍ اَنۡۢبَتَتۡ سَبۡعَ سَنَابِلَ فِىۡ كُلِّ سُنۡۢبُلَةٍ مِّائَةُ حَبَّةٍؕ وَاللّٰهُ يُضٰعِفُ لِمَنۡ يَّشَآءُ ؕ وَاللّٰهُ وَاسِعٌ عَلِيۡمٌ ٢٦١
“The example of those who spend their wealth in the way of Allah is like a seed that grows seven stalks, on each stalk a hundred seeds. Allah multiplies for whom He wills, and Allah is All-Wise, All-Knowing.” (Al-Baqarah: 261)
The verse provides information about the importance of investment even though it is not explained concretely in the verse, however, the verse conveys how fortunate people who invest their wealth in the way of Allah. In the economic perspective, this verse means that the more Muslims who make infaq, the more they help people who are in trouble in the world, by means of infaq made by the rich can be channeled to invest in productive activities and produce in accordance with Sharia principles so that it has worldly and afterlife value.
Hadith narrated by Imam Muslim which means:
“Give those who own land the opportunity to utilize it, by their own means and if they do not do so, let others use it”.
In this Hadith wants to convey that the assets owned can be utilized in a productive and valuable way and can provide benefits, in this case it becomes a reference to the Hadith argument by utilizing assets through productive investment and still in accordance with Islamic values.
Also Read: The Meaning of Eid al-Fitr in Making Financial Hijrah
Tips Menjaga Semangat Ramadan Ketika Bermudik: Panduan Praktis Beribadah Ketika Bermudik
Sharia Investment Objectives
According to Ahmad Ghazali, the principle of investment is:
يٰۤـاَيُّهَا الَّذِيۡنَ اٰمَنُوۡا لَا تَاۡكُلُوۡۤا اَمۡوَالَـكُمۡ بَيۡنَكُمۡ بِالۡبَاطِلِ اِلَّاۤ اَنۡ تَكُوۡنَ تِجَارَةً عَنۡ تَرَاضٍ مِّنۡكُ مۡ
وَلَا تَقۡتُلُوۡۤا اَنۡـفُسَكُمۡؕ اِنَّ اللّٰهَ كَانَ بِكُمۡ رَحِيۡمًا٢٩
“O you who believe! Do not eat from one another’s wealth by unlawful means, except in trade that is consensual between you. And do not kill yourselves. Indeed, Allah is Most Merciful to you.” (Q.S An-Nisa:29)
The concept of Sharia in investment objectives has certain characteristics, this is inseparable from the purpose of sharia for humans in the Islamic concept to increase welfare for all mankind.
The purpose of sharia(Maqsid as-syariah) includes five aspects:
1. Safeguarding religion (Hifdzu al-diin)
2. Preserving life (Hifdzu alnafs)
3. Preserving the mind / generation (hifdzu al-aql)
4. Maintain offspring / generation (hifdzu al-nasl)
5. Safeguarding property (hifdzu al-maal)
In the last factor of safeguarding property, in an effort to safeguard property, Muslims can invest. In the context of Sharia, the purpose of investment is investment with the aim of increasing profits and gaining the pleasure of Allah SWT by avoiding elements containing maisir, gharar, usury and dhhalim, in the implementation of these investments and having a social impact on the benefit of the people.
Also Read: Implementation of The Zakat System in The Modern Era
Urgensi Mempertahankan Semangat Ibadah Hingga Akhir Ramadhan
Sharia Investment Principles
According to Ahmad Ghazali, the principle of investment is:
يٰۤـاَيُّهَا الَّذِيۡنَ اٰمَنُوۡا لَا تَاۡكُلُوۡۤا اَمۡوَالَـكُمۡ بَيۡنَكُمۡ بِالۡبَاطِلِ اِلَّاۤ اَنۡ تَكُوۡنَ تِجَارَةً عَنۡ تَرَاضٍ مِّنۡكُ مۡ
وَلَا تَقۡتُلُوۡۤا اَنۡـفُسَكُمۡؕ اِنَّ اللّٰهَ كَانَ بِكُمۡ رَحِيۡمًا٢٩
“O you who believe! Do not eat from one another’s wealth by unlawful means, except in trade that is consensual between you. And do not kill yourselves. Indeed, Allah is Most Merciful to you.” (Q.S An-Nisa:29)
We can know that this verse explains how to use wealth in a good and right way in accordance with Sharia. Sharia investment discusses several principles that we need to know including:
1. Halal principle
The halal principle in Sharia investment can be seen in the place and process of investment, namely:
“Peace can be made between Muslims except for peace that forbids the lawful or that legalizes the unlawful; and Muslims are bound by their conditions except for conditions that forbid the lawful or legalize the unlawful.” (H.R Tirmidhi)
a. Halal places, namely businesses that are established in a halal manner, not a fraud, and halal products and do not contain elements of gharar, maysir, usury.
b. Halal process, namely a clear agreement between the two parties which is carried out openly, both content, operational system and profit sharing.
2. The principle of blessing
In the principle of investment must have an element of blessing, investment does not only pay attention to the economic side but the blessing of inner satisfaction for business actors who make investments.
3. The principle of value added (profit margin)
“Whoever does salaf( salam,) should do it with clear measurements and clear scales, for a known period of time.” (H.R Bukhari)
Based on the hadith, we can understand that in determining the increase in value (profit) should be done with a clear value and time period. This principle is a way to be able to increase assets and obtain profits in a halal and blessed way.
4. Realistic principle
This principle is a description of the results of investment, not just a written count but based on the value of reality.
Also Read: Islamic Economic System and the Prohibition of Interest (Riba)
Panduan Praktis Zakat Fitrah
Urgency of Sharia Investment
1. Halal investment
Sharia investment is a halal investment that is in accordance with Sharia principles. Transactions carried out in the investment process starting from the contract, the object or business activities carried out and the distribution of profits are carried out clearly in accordance with Islamic law and do not contain elements of gharar, maysir and usury. And Allah commands Muslims not to make transactions that contain elements of usury.
يٰۤـاَيُّهَا الَّذِيۡنَ اٰمَنُوا اتَّقُوا اللّٰهَ وَذَرُوۡا مَا بَقِىَ مِنَ الرِّبٰٓوا اِنۡ كُنۡتُمۡ مُّؤۡمِنِيۡنَ ٢٧٨
“O you who believe! Fear Allah and leave behind the residue of usury (that has not been collected) if you are believers.” (Al-Baqarah-278)
2. Safer and more blessed investment
Every transaction carried out in Sharia investment has a clear and transparent contract scheme for every investor or business manager such as the use of musyrakah and mudharabah, murabahah contract schemes in investments that have explained the percentage of profit that both parties will get so that there is no element of fraud in it, so that as an investor feels safer, and transactions carried out according to Islamic law become more blessed.
“The Prophet (PBUH) said that there are three things that contain blessings: buying and selling not in cash, muqaradhah( mudharabah,) and mixing wheat with barley for household use, not for sale“. (H.R Ibn Majah)
3. Relatively lower risk
In investment, of course, there will still be a risk, but in Sharia investment, the risk is relatively lower because the contract used in the transaction process is carried out clearly for the distribution of risk and profit, for example in the mudharabah contract, the capital provider (shahibul maal) has a percentage share of the margin or profit that will be obtained from the business manager (mudharib) but for the risks that occur are borne by both parties because the nature of this investment is cooperation depending on the risk, and in Sharia investment does not contain interest rates (usury) so it does not depend on fluctuating interest rates which can change at any time.
4. Sharia investment contains social value
An investor who invests his capital into a business and is managed properly and correctly in accordance with the rules of Islamic law by entrepreneurs so that it can produce better value of goods or services so that it can open new jobs for the community.
Also Read: Sunnah of Fasting Shawwal, What Are The Advantages?
Nuzulul Quran: Pelajaran Penting dari Turunnya Al-Qur’an Pertama Kali di Bulan Ramadhan
Conclusion
Now is the time for Muslims to invest in accordance with Sharia principles considering that the purpose of the creation of mankind is to worship Allah and increase devotion to Allah, one way is to take care of and distribute assets in accordance with the rules of Sharia, Muslims not only get the blessings of the end but the blessings of the world, because every transaction made in Sharia investment has a contract, and the distribution of profits is clear so that Muslims do not need to worry.
References
Naili Rahmawati. (2015). Manajemen Investasi Syariah. Mataram : Institut Agama Islam Negeri (IAIN) Mataram.
Sakinah. (2014). Investasi Dalam Islam.Journal Iqtishadia . Vol 1(2) Page 249-262
Bank Indonesia, Kajian Ekonomi & Keuangan Syariah 2022, acces on 25/03/2024, https://www.bi.go.id/id/publikasi/laporan/Documents/KEKSI_2022.pdf
Principal, “ Investasi Syariah Berkembang sangat pesat, ini Buktinya”, acces on 25/03/2024, https://blog.principal.co.id/id/investasi-syariah-berkembang-sangat-pesat-ini-buktinya
Principal, “ Keuntungan Investasi Syariah”, acces on 25/03/2024, https://blog.principal.co.id/id/keuntungan-berinvestasi-secara-syariah