PEMBENTANGAN KERTAS KAJIAN 'INNOPSIS 2012", POLITEKNIK SULTAN IDRIS SHAH SELANGOR 15-19 OKTOBER 2O12

THE EFFECT OF DIPLOMA ISLAMIC BANKING SYLLABUS ON STUDENTS

UNDERSTANDING

Khairul Jannah binti Samsudin

Norhidayah binti Mohd Salleh
Lecturer of Commerce Department
Politeknik Sultan Idris Shah

Abstract

This paper discusses the effect of Diploma Islamic Banking and Finance syllabus on students
understanding. This study is conducted with the aim to add to the literature by examining
carefully the relationships between academic, general public awareness and Islamic finance
education. The research is conducted by distributing questionnaires to semester 5 and 6 students
of this course. The data is analyzed by using descriptive statistic analysis of SPSS software
application. The findings showed that the syllabus of Diploma Islamic Banking and Finance has
significant effect in enhancing students understanding on Islamic banking and finance. Thus,
religion is the key factor for students to choose Islamic banking and finance product compared to
conventional.

Key words: Islamic banking and finance, effect, syllabus, students understanding, students
preference, choose, syllabus roles

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1.0 INTRODUCTION

Human civilization developed since thousands years ago as education progressed. At the
beginning, the education was done in informal way, where people learned through their five
senses, or perhaps from the elders. As innovation took place, people started their formal
education in places like at educators house or at mosque for Muslims. Nowadays the
government of a country builds schools, colleges and universities to ensure their citizen is well
educate and have their chances to learn.

Islam presumes education as the first priority to all Muslims. Thus, the first revelation to
the Holy Prophet pbuh was five verses started with Iqra which means read. Furthermore, during
the prophethood and four caliphs era, many scholars were born and yet, they were not only
focused on religious study but also the apprentice in many fields like science, medical and
mathematics. In this era, current scenario shows Islamic nations throughout the world develop
their own education system and education is a necessity since early childhood.

Malaysia, as one of the Islamic nations, always improvises the education system in order
to be far ahead among other Islamic nations. Even though the education system is not entirely
Islamic based, however, Islamic study is still important in every education level. The emergence
of Islamic banking in the middle of 1960s has led many universities in this country to introduce
Islamic banking and finance courses. To date, there are 16 universities and colleges that are
offering courses and programmes related to this field1.

In polytechnic system itself, there are four polytechnics that offer Diploma in Islamic
Banking and Finance namely Politeknik Sultan Idris Shah, Politeknik Nilai, Politeknik Ungku
Omar and Politeknik Seberang Perai and not to forget Politeknik Metro Johor Bharu as the
apprentice among metro polytechnics that offers this course on part time basis.

Even though many higher education institutions take the responsibility to offer the
courses and programmes, however, the intended experts in Islamic banking and finance are still

1
www.aibim.com

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questionable. The education system implemented in this country is said to be the root of the
problem. The main elements to look into in the education system are always the syllabus and
content of a course, the educator and the higher education institution as a whole.

In this regard, this research is expected to examine whether the syllabus and content
design for Diploma Islamic Banking and Finance plays their role effectively in enhancing
students understanding, further develops needed knowledgeable, well-versed Islamic banking
and finance graduates.

2.0 PURPOSE OF STUDY

The aim of this study is to investigate the effect of Diploma Islamic Banking syllabus on
students understanding.

A secondary purpose is to examine how the syllabus improves students understanding of

Islamic banking and finance, further assist them in making decision between Islamic bank
financing and conventional.

3.0 PROBLEM STATEMENT

The increasing number of higher institution in Malaysia, i.e. universities and colleges that
offer Islamic banking and finance, show how serious Malaysian government in realizing the
mission to be the Islamic banking and finance hub. However, there are still many areas to look
into in ensuring the output, i.e. the graduates have the knowledge, skill and expertise expected by
the industry.

At this juncture, this project paper has design three questions that will study how the
syllabus of Diploma Islamic Banking affects the students of Politeknik Sultan Idris Shah.

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1. Does the syllabus play their roles to improve students understanding on Islamic banking and
finance?
2. Do the students have initiative to explore the Islamic banking and finance field?
3. How the syllabus effects the students decision in choosing the financing products and
services?

4.0 SIGNIFICANCE OF STUDY

The study is significant for three reasons. First, since the growth of Islamic banking and
finance in Malaysia, a well design education system is needed to complement the industry in
order to have the Islamic finance experts as well as the needed conscious society. Second, the
study will find out whether the syllabus in polytechnics able to enhance Islamic banking and
finance knowledge among graduates. Third, the study is significant due to its implications on
Islamic banking and finance education in Malaysia, the industry and the society.

5.0 LITERATURE REVIEW

As Islamic banking and finance emerged, many issues related to it, has been discussed. In
terms of Islamic banking and finance education, there is still lacking of researchers and studies to
clearly elaborate on the issue. However, we found a few previous studies that are relevant to the
current state of Islamic banking and finance education.

Halim (2001) in his study suggested that muamalat knowledge should be imparted and
disseminated to everyone at a very young age. A new curriculum should be constructed and
design to cater the loophole in the education system. Students should not only be taught
theoretical aspects of muamalat but also practical knowledge.

On the other hand, Azmi (2010) in his previous research argued lack of human capital in
Islamic finance has always been cited as one of the challenges for the industrys development.

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The market lacks practitioners who are well versed in Shariah and Shariah scholars who
understand market practice and intricacies of the domestic industry. Recognizing the issue,
countries like Malaysia, have introduced government initiatives which include development of
human capital as part of their agenda. Institutions of higher education such as International
Islamic University of Malaysia and International Centre of Excellence in Islamic Finance, offer
courses in Islamic finance. These institutions offer programmes and courses that assist the
industry to develop human capital needed in Islamic banking and finance field. Moreover, the
higher education institutions can further assist the Islamic banking and finance institutions in
educating the society.

In elaborating the issue of Islamic finance education, Abdullah (2011), in his writing
stressed that education in Islamic Finance can be broken down into three key areas; academic,
industry training and general public awareness. This project paper uses his thought as a sole basis
in designing the elements to look into. However, as the main focus is the education system itself,
this paper will concentrate only on academic and general public awareness.

Academic

One cannot deny the importance of academic or formal education in developing a nation.
As one of developing countries, Malaysian government with the ministry of education and higher
education attempted to provide the best education system for the citizen.

Arifin (1999) noted that philosophy and education rationale are related to the
fundamental of education that human tries to build. The fundamental results from ideas and facts
about human development are based on their values and general education objectives. He further
suggested that lecturers, university management, curriculum developer and counselor are the key
factors for university programmes success.

As argued by Askari (2009), education, or knowledge, is today seen as a major, if not the
major, input for sustained economic growth and development. In the development of modern
financial sector there is a critical need for highly educated professionals in the fields of

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economics, finance, accounting, and IT. Unfortunately, all of these specialists are in high
demand and highly mobile. In increasing the number of Islamic economics scholars, it is a
difficult task to develop cross-discipline activities in order to train Shariah scholars in economics
and the economists with the basis of Shariah principles.

From previous studies discussed, we can conclude that academic is a solution to supply
the in need human capital in Islamic finance. However, high-quality university education,
lecturers, university management and curriculum developer are among the determinants that will
ensure the successfulness of courses offered, thus, assist in developing the Islamic banking and
finance system.

General Public Awareness

Customers are people who involve directly with Islamic banking and finance. Customers
perception and preference towards this field show their awareness on the subject matter. In order
to educate the customer, Islamic banks, first has to create awareness among public or society.

Arifin (1999) discussed socialization as society learning process to analyze and

understand a system, value and culture that exist in the society. The introduction and
comprehension are completed when all related information that leads into the survival of a
system, value and culture are included. The socialization process will lead the transformation of
thoughts which results from transformation of an activity pattern.

In this sense, in order to promote public awareness on Islamic finance, there is an

involvement of socialization process; where the society able to understand about the Islamic
finance. Aggressive marketing and advertising are among the methods that can be used in
instilling the information.

However, Arifin, in his study stated that the society still see Islamic banking with
conventional perception, meanwhile the intellectuals are surrounded with people with Islamic
religious education background that has least economic knowledge and people with conventional

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education background that have the enthusiasm in Islamic banking but with no appropriate
Shariah background. This problem can only be rectified through the socialization process.

Meanwhile, the public should be made aware of the cultural impact that an Islamic
banking system would have, as been suggested by Kalim (2006) in his study. They should be
educated on the social benefits the society would gain from adopting the system. Issues of
poverty, basic public services in health, education etc. can be addressed by drawing strength
from such a banking system.

In a study conducted by Kayed (2010), he stressed that the educational system is under
moral obligations to assume its pivotal role in passing on the knowledge of Islamic economics
amongst Muslims, and creating the awareness of the availability of Islamic financial products as
alternatives to the services offered by conventional financing. The future of the Islamic banking
and finance industry is largely dependent on maintaining steady stream of competent human
capital and well-informed, well educated clientele base. Both groups are the product of a sound
educational system.

Aziz (2004) suggested extensive education of the consumer and business community
would increase the outreach resulting in increased demands for new and innovative products and
approaches. Malaysia has implemented a 10-year structured consumer education programme to
increase the level of consumer awareness on the unique characteristics of Islamic financial
products and the product choices offered by Islamic financial services providers.

Increased awareness will drive the demand for a broader range of Islamic products and
services customised to their requirements at more competitive prices and through more
convenient channels. This outreach programme has also been for small businesses on the Islamic
products and services. This process prompts the financial industry to increase innovation to
strengthen their competitive position. This can be reinforced by market research to enhance the
understanding of the customers' distinct financial needs and their risk tolerance and therefore
enable the design of Islamic financial instruments that offer tangible benefits and value to
customers.

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This study seeks to add to this literature by examining carefully the relationships between
academic, general public awareness and Islamic finance education. One of the driving
motivations for this study was the belief that academic is the main factor for the development of
Islamic finance. Hence, general public awareness is another determinant that will ensure the
acceptance of the society on the implementation of Islamic finance industry in a country.

6.0 METHODOLOGY

6.1 Participants

The participants for this study were the fifth and sixth semester, Commerce Department
students, and consist of 70 students for both semesters. They were taking Diploma Islamic
Banking and Finance course at Politeknik Sultan Idris Syah. They formed a convenient sample
as they were final semester students for this course. Hundred percents of fifth and sixth semester
students age ranging from 18 to 26 years old took part in answering the questionnaires.

6.2 Design and Instrumentation

In this research one set of questionnaire was used. The data collection method was a
closed-ended survey instrument designed to measure the variables that are examined in this
study. The survey instrument consisted of standard personal background and demographic items
as well as items from three scales that are relevant to the issues being examined. They were; (1)
Academic, (2) Islamic Finance Information and (3) Individual Preference.

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6.3 Data Analysis

The data analysis for this research was conducted using the computer package SPSS
Windows Version 14.0. An analysis of mean was used to analyze the data and the results are
discussed later.

7.0 Results and Findings

7.1 Does the syllabus play their role to nourish students understanding on Islamic banking
and finance?

The findings through questionnaire about the effect of the Diploma Islamic banking and
finance syllabus shows that all students are agreed that the syllabus enhance their
understanding. Effective roles played by the lecturers and the commerce department
smoothen their learning process.

Academic Mean
A-1 Islamic banking and finance as a part of course curriculum 1.06
A-2 Better understanding of Islamic banking and finance after 1.13
graduation
A3 Effective roles by higher education institutions to enhance student 1.09
knowledge (i.e. lecturer and department)
A4 Relevancy of syllabus and content with current Islamic banking and 1.07
finance industry
A5 Provision of needed information through the implementation of 1.03
Islamic banking and finance education in Malaysia
A-6 The ability to explain about Islamic banking and finance to 1.17
common people
Table 1: Syllabus roles on students understanding

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7.2 Does the students have initiative to explore the Islamic banking and finance field?

Students had agreed on all nine categories (all averaging 1.01 to 1.36). This shows that
the students have the effort to improve their knowledge by seeking more information other
than what they were taught during learning process.

Islamic Finance Information Mean

B-1 Students effort to find information in improving their knowledge 1.09
B-2 Knowledge on Islamic banking financial products 1.06
B3 Students knowledge on riba 1.01
B4 Students knowledge on Al-Wadiah 1.03
B5 The ability to explain Bai al Salam 1.24
B-6 Students knowledge on Sukuk 1.09
B-7 Students knowledge on Interest Free Home Financing 1.31
B-8 The ability to differentiate between Islamic banking and 1.01
conventional financial product
B-9 The accessibility to find information on Islamic banking and 1.36
finance
Table 2: Students effort to enhance knowledge

7.3 How the syllabus effects the students decision in choosing the financing products and
services?

After the quantitative data were analyzed, the third scale showed mean score range
between 4.19 to 4.57. Based on the score it can be said that the syllabus affects the students
preference in choosing the financing products and services. For C-5 category, majority of
participants select religion as the main factor in choosing Islamic finance products and
services.

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Individual Preference Mean

C-1 Experience on Islamic banking product 4.19
C-2 Preference between Islamic finance and conventional 4.57
C3 Students rank on Islamic banking and finance preference 4.31
C4 Students continuous adherence to Islamic financing products in the 4.33
future
C5 Main factor that affects students preference in choosing Islamic 1.55
finance products and services
Table 3: Students preference towards Islamic finance products and services

8.0 DISCUSSION

Based on research findings, most of the participants agreed Diploma Islamic Banking and
Finance syllabus has significant effect on their understanding. Lecturers, commerce department
and students enthusiasms were seem as the core factors to strengthen the implementation of this
course in polytechnic systems. The roles of the lecturers were to give students more
responsibility, providing more opportunities to the students to improve their knowledge on
Islamic banking and finance.

From the questionnaire answered, participants revealed that they have better
understanding and clarification of Islamic terms and contracts as compared to before entering the
polytechnic. The students also agreed that the syllabus designed assists them in improving the
understanding and theoretical aspects of the Islamic banking and finance.

Other than that, it is undeniable that religion plays important role in students preference
to adhere to Islamic financing products in the future. The roles that the syllabus played in
providing the fundamental of Shariah knowledge, could be one of essential determinants to
increase students understanding on what Islamic banking and finance is all about and why they
need to adhere to the services provided by Islamic financial institutions.

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9.0 CONCLUSIONS AND RECOMMENDATIONS

As Diploma Islamic Banking and Finance programme overview suggests, the course is
offered to develop students knowledge and skills to meet global challenges and requirements set
by the Islamic banking industry. When all these objectives are met, the graduates will be able to
educate the society as a whole.

The implementation of Diploma Islamic Banking and Finance in polytechnics is a

virtuous step taken as the industry is develops currently. As one of higher education institutions
in Malaysia, polytechnics had showed interests in supplying the manpower needed by the
industry. However, the polytechnic system will be able to supply more quality graduates for the
industry if most of the commerce department at polytechnic offers this course.

Furthermore, the polytechnics system as a whole should establish better relationship with
the industry to ensure the syllabus of the Diploma Islamic Banking and Finance prepares
students to meet the industry needs. Other than that, lecturers have to play their function
diligently by enhancing their own knowledge, skills and expertise before they teach the students.

Other than that, with the assistance of higher education ministry, the polytechnics system
must have a better teaching and learning method that will enhance students understanding.
Innovation and research could be done in order for the polytechnics to be one of the highest
quality higher learning institutions in Malaysia, simultaneously creating healthy education
culture in the system.

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9.0 APPENDIX

9.1 References

1. Abdullah, D.V. (2011), Industry Snapshot: E.P.L. in Islamic Finance Education,

Internet download

2. Arifin, Z. (1999), Memahami Bank Syariah: Lingkup, Peluang, Tantangan dan Prospek,
Alvabet, Jakarta

3. Askari, H., Iqbal, Z. and Mirakhor, A. (2009), Issues and Challenges, in New Issues in
Islamic Finance and Economics: Progress and Challenges, John Wiley & Sons (Asia)
Pte. Ltd., Singapore, pp 72

4. Aziz, Z.A., (2004), The Challenges to Promote a Competitive, Dynamic and Sustainable
Islamic Financial Services Industry, in Islamic Banking and Finance Progress and
Prospects Collected Speeches: 2000-2006, Central bank of Malaysia, Internet download,
pp 129-139

5. Azmi, M.F., and Othman, A. (2010), General Overview of Islamic Finance in Asia, IFN
Daily 25 October, pp18

6. Hamid, A.H., and Nordin, N.A. (2001), A Study on Islamic Banking Education and
Strategy for The New Millennium Malaysian Experience, International Journal of
Islamic Financial Services 2, No. 4.

7. Kalim, R. and Lodhi, S.A., (2006), Strategic Directions for Developing an Islamic
Banking System, International Association for Islamic Economics, Review for Islamic
Economics 10, No. 1, Internet download, pp 5-21

8. Kayed, R.N., (2010), Appraisal of the Status on Research on Labor Economics in the
Islamic Framework, Internet download, pp 183-198

9. AIBIM. (2012). Education & Research/ Universities/ Colleges. Available online:

www.aibim.com. Accessed: December 12, 2011

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9.2 Questionnaire

Khairul Jannah binti Samsudin

Lecturer, Commerce Department, PSIS
Email: jannahsamsudin@psis.edu.my

Norhidayah binti Mohd Salleh

Lecturer, Commerce Department, PSIS
Email: norhidayah@psis.edu.my

The Effect of Diploma Islamic Banking Syllabus on Students Understanding

You are invited to participate in the above project, which is being conducted by Khairul Jannah
binti Samsudin and Norhidayah binti Mohd Salleh. You have been identified as a participant
based on the fact that you would be able to provide vital information for this research.

The aim of this study is to investigate how effectively the Islamic banking and finance education
in Malaysia plays its role in improving the understanding of Islamic finance system, not only
among graduates but also for the society as a whole.

The data obtained from the questionnaire will be reported as group data only. Your individual
information will not be identifiable in the report. Furthermore, the completed questionnaire will
be anonymous, as you are not required to reveal personal information such as your name or
contact number.

Please be advised that your participation in this study is completely voluntary. Should you wish
to withdraw at any stage you are free to do so without prejudice. If you would like to participate,
please return the completed anonymous questionnaire, which will consequently indicate your
consent to participate in this project.

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QUESTIONNAIRE

Survey on Islamic Banking and Finance Education in Malaysia

Section 1: General Information of Respondent

Please check ( ) where appropriate

Age : 18 20 21 - 23 24 - 26 27 and above

Gender : male female

Semester : 5 6

Religion : Muslim others

Section 2

Please check ( ) where appropriate

A Academic Yes No

A-1 Was Islamic finance a part of your curriculum at any level in your studies? 1 2

A-2 Do you think you have better understanding of Islamic finance after you
1 2
graduated?

A-3 Do you think your institution (i.e. lecturer and faculty) play their roles
1 2
effectively to enhance your knowledge in Islamic finance?

A-4 Do you think the syllabus and content were relevant with current Islamic
1 2
banking and finance industry?

A-5 Do you think the implementation of Islamic finance education in Malaysia,

1 2
could provide you with needed information of Islamic finance?

A-6 Do you think you are able to explain what Islamic finance is about to
1 2
common people?

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B Islamic Finance Information Yes No

B-1 Did you ever search from other sources on Islamic finance (i.e. internet,
1 2
books or journals) to improve your knowledge?

B-2 Do you know about Islamic banking financial products?

If yes, name some products;
i. _____________________________ 1 2
ii. _____________________________
iii._____________________________

B-3 Do you know what riba is?

1 2
From where? Name the source: ______________________________

B-4 Do you know what Al-Wadiah is?

1 2
From where? Name the source: ______________________________

B-5 Do you know what Bai' Al Salam is? If yes, explain.

_________________________________________________________ 1 2
_________________________________________________________

B-6 Do you know what Sukuk is? 1 2

B-7 Do you know about Interest Free Home Financing? 1 2

B-8 Do you know the difference between Islamic banking and conventional
1 2
financial product?

B-9 Do you think it is easy to find information about Islamic finance? 1 2

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Strongly Strongly
C Individual Preference Disagree Agree

C-1 Have you ever used any Islamic banking product? 1 2 3 4 5

C-2 Do you think the Islamic finance is better for you

1 2 3 4 5
than the conventional?

C-3 Rank your preference towards Islamic finance and

1 2 3 4 5
banking.

C-4 Do you think you will adhere to Islamic financing

1 2 3 4 5
products in the future?

C-5 Please state the main factor that affects your preference in choosing Islamic finance products
and services.
1 Education
2 Religion
3 Profit
4 Financial Stability
5 None of the above. Please specify __________________________________

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