Purpose This study aims to analyse the role of corporate governance in moderating the effects of murabahah, mudharabah and musyarakah financing on the financing risk and financial performance of Islamic banks. Design/methodology/approach The population for this study covered Islamic banks in Indonesia. Purposive sampling was performed, and statistical analysis was conducted using moderating regression analysis by selecting among the common, fixed and random effects models. Findings The results showed that murabahah financing has a positive effect on financing risk; conversely, mudharabah financing has a negative effect on financing risk. By contrast, musyarakah financing has no effect on financing risk. However, corporate governance weakens the influence of murabahah financing on financing risk and increases that of mudharabah financing on financing risk. Further, corporate governance cannot weaken the effect of musyarakah financing on financing risk. Additionally, financing risk reduces financial performance. Research limitations/implications This research focusses only on Indonesian Islamic banks; future research should be extended to Islamic insurance and Islamic micro finance. Practical implications The results serve as input for government regulations on corporate governance in Islamic bank financing and encourage Islamic banks to diversify their financing proportionally. Social implications This research can be used for optimising Islamic bank financing to empower the realty sector and reduce poverty. Originality/value Research on the role of corporate governance as a moderating variable in reducing financing risk in Islamic banks remains limited.

Purpose This paper aims to propose a framework for information and communication technology (ICT)-based collaborative zakat management to improve zakat management in Indonesia, especially in collection, distribution and empowerment. Design/methodology/approach This paper used a constructive method that used the 3 C (communication, coordination and cooperation) model to develop a framework. This included initial assessment of the current usage of ICT in zakat management and the expectation of collaborative zakat management through in-depth interviews and questionnaires. A focus group discussion was conducted to validate the model. Findings ICT is currently used for the administration of zakat management, providing zakat online services and reporting zakat to the public; ICT is not used for collaboration. The proposed collaboration using the 3 C model consists of communication, coordination and cooperation. The focus group discussion validates the proposed ICT-based collaboration framework as an effective strategy for increasing zakat management. Practical implications The results highlight strengthening institutional capacity and decreasing overlaps in zakat collection, distribution and empowerment. Zakat institutions need to restructure and reconstruct business processes based on ICT collaboration, and government must provide regulations and ICT infrastructure. Social implications The results increase equity and capacity in zakat distribution and empowerment, therefore it can improve poverty alleviation. Originality/value The potential and usage of ICT for collaboration among zakat management organisations have not been thoroughly explored. This paper proposes a conceptual framework for collaboration among zakat institutions using ICT to enhance the efficiency and effectiveness of zakat management.

Purpose This study aims to explore the risk management practices of Islamic microfinance institutions (IMFIs) to increase their financial performance and sustainability. Design/methodology/approach This research used a qualitative approach to increase financial performance and sustainability. The study population comprised the Baitut Tamwil Muhammadiyah (BTM) in Central Java Province, Indonesia. The data collection techniques included questionnaires and an in-depth interview, and the framework was validated by the main participants. Findings This study showed that BTMs have implemented risk management using different standards. However, such risk management is carried out partially while prioritising certain risks and using different methods. The risk of Sharia compliance is the most recognised risk, while financing and operational risks are the most anticipated, because these two risk types directly impact financial performance and sustainability. In general, a risk management model can improve financial performance and sustainability. Nevertheless, there are obstacles in implementing risk management at BTMs, which include weak human resources, the employee selection process, human resource development and a good control system. Originality/value This research explored best practices for risk management in IMFIs and may contribute to the development of risk management in such institutions to maintain the financial performance and sustainability of their services.

The problem of SMEs in Indonesia as a “high-risk borrower” that has not been resolved until today. The purposes of this study was to analyze the financial literacy as mediating between corporate governance and SMEs’ credit risk in Indonesia. This sample method used purposive sampling: 1273 units of Trade and Service SMEs fostered by Central Java that received credit in 2018. Twenty percent of the totals were taken, so the total was 255 samples. The data collection technique used questionnaires and interviews. The number of questionnaires distributed were 255 with a response rate of 95%, so resulting 242 respondents. Data analysis used descriptive and Regression Method. The corporate governance shown by responsibility, independence, and fairness did not affect SMEs’ credit risk. In other words, transparency and accountability is effective in reducing SMEs’ credit risk. Also, financial literacy can strengthen the influence of transparency, accountability, and responsibility in reducing credit risk for SMEs in Indonesia.

The purpose of this research is to analyze the effect of merger and acquisition strategy for majority and minority shareholders at Indonesia capital market. This research is important since most of company ownership structure in Indonesia is categorized concentrated structure, where its create a conflict between majority and minority shareholders. The population of the research are companies that go public in the Indonesia capital market until the year of 2006. These samples of this research consists of 35 companies, divided two groups : high and low concentrated ownership structure, that are selected based on purposive sampling method. In processes testing the hypothesis, 2 indicators were used, i.e. market indicator and accounting indicator. Event study analysis was used for market indicator, whereas multiple regression analysis was used for accounting indicator. The results show a market reaction negative and statistically significant on merger and acquisition announcement. Effect of merger and acquisition strategy on performance is negative and statistically significant. This is indicated that tunneling by majority shareholder to minority shareholders through merger and acquisition strategy, and acquisition not value added for shareholder minority.