Knowledge And Application Of Islamic Financial Planning Among Small And Medium Enterprises Halal Operators In Peninsular Of Malaysia

Abstract

Malaysia plays an important role in halal industry at national and international level. In the Eleventh Malaysia Plan, 2016–2020, the halal industry was emphasised by the Prime Minister to ensure that the halal industry is highly and persistently competitive. In Asia, Malaysia is considered as a leader in the development of halal hub centre.However, halal industry is not only about halal food production but also covers the Islamic finance services that prohibit riba, gharar (uncertainties), and maysir (gambling).Islamic financial planning is one of the important parts of Islamic finance because it plays a big role in providing Shariah-compliant funds and investment opportunities especially to halal SME operators.The holistic approach of halal industry should also covers not only halal food production but also the Islamic financial planning that includes activities such as creating, increasing, purifying, and protecting wealth from the Islamic perspective.Thus, this study has conducted a survey on knowledge on Islamic financial planning among halal SME operators in Peninsular Malaysia. The findings of this study revealed that the knowledge of Islamic finance was significantly correlated with the application of Islamic financial planning among halal SME operators. This finding indicated the importance of integration between knowledge on halal food production with Islamic financial planning activities. This relationship recognises the importance of knowledge and practice of Islamic financial planning among halal SME operators in promoting halal products and services and boosts demand for Malaysian halal products at the international level.

Keywords: Halal industry, Halal SME operator, Islamic financial planning