V. CONCLUSION
Liquidity is a company’s ability to meet current obligations with cash or other assets that can be quickly converted to cash. Thus, liquidity management is prudently managing assets and liabilities (on and off-balance sheet) to ensure that cash inflows can meet the approaching size of cash outflows. The un-ability in managing liquidity will in one side will disturb daily operation, which if frequently happen can smash the business and in other side will also destroy the creditworthiness.
Sharia financing is type of financing which are not allowed to take profit in form of interest. The financing can be divided into 3 categories. The first category is financing base on sales and purchase method consist of Murabaha (cost-plus financing), Salam (pre-paid purchase) and Istisna (progressive financing). The second category is investment method, which includes Mudaraba (trust financing) and Musharaka (partnership financing). The last category consists of financings, which can be categorized in sales and purchase or investment method. Ijara (leasing), hawala (factoring) rahn (collateralized borrowing) and qard hasan (benevolent loan) belong to this category.
Liquidity management is compiled as liquidity policy divided into operating liquidity and strategic liquidity. Operating liquidity is conducted to meet day-to-day cash outflow obligations in the next one month as strategic liquidity to anticipate cash outflow in longer-term basis and unexpected business conditions. To measure or control the liquidity risk various ratios are used, namely current ratio, quick ratio, working capital, days’ sale receivables, receivables turnover, days’ sale inventory and inventory turn over.
As interest is forbidden, it is difficult for sharia financing to adjust in cash financing required by liquidity management. However some scholars have proposed qardh and hawala as alternative but there is still argument in determining the administration fee. Another scholars have proposed murabaha system but it makes the facility difficult to distinguish it with working capital facility.
REFERENCES
Antonio, Muhammad Syafii, Bank Syariah : Dari Teori ke Praktek, Gema Insani Press, Jakarta: 2001
Arifin, Zainul, MBA, Menyoal Konsep Rekening Koran Syariah, in www.tazkiaonline.com/print.php3?sid=450, June 5th, 2004
Baraba, Achmad, Prinsip Dasar Operasional Perbankan Syariah, in
www.bi.go.id/bank_indonesia2/utama/ publikasi/upload/bemp-vol-2-no-3-des99.pdf, June 5th, 2004
Office of the Superintendent of Financial Institution Canada, Standards of Sound Business and Financial Practices - Liquidity Management, in www.osfi-bsif.gc.ca/eng/documents/guidance/docs/f10e.pdf, in June 6th, 2004
www.bankersonline.com/tools/riskmgt_liquidityrisk.doc, May 28th, 2004-06-30
www.islamic-banking.com/shariah
www.soba.fortlewis.edu/mull/ba382/powerpoint/ch09.ppt, May 28th, 2004
Liquidity is a company’s ability to meet current obligations with cash or other assets that can be quickly converted to cash. Thus, liquidity management is prudently managing assets and liabilities (on and off-balance sheet) to ensure that cash inflows can meet the approaching size of cash outflows. The un-ability in managing liquidity will in one side will disturb daily operation, which if frequently happen can smash the business and in other side will also destroy the creditworthiness.
Sharia financing is type of financing which are not allowed to take profit in form of interest. The financing can be divided into 3 categories. The first category is financing base on sales and purchase method consist of Murabaha (cost-plus financing), Salam (pre-paid purchase) and Istisna (progressive financing). The second category is investment method, which includes Mudaraba (trust financing) and Musharaka (partnership financing). The last category consists of financings, which can be categorized in sales and purchase or investment method. Ijara (leasing), hawala (factoring) rahn (collateralized borrowing) and qard hasan (benevolent loan) belong to this category.
Liquidity management is compiled as liquidity policy divided into operating liquidity and strategic liquidity. Operating liquidity is conducted to meet day-to-day cash outflow obligations in the next one month as strategic liquidity to anticipate cash outflow in longer-term basis and unexpected business conditions. To measure or control the liquidity risk various ratios are used, namely current ratio, quick ratio, working capital, days’ sale receivables, receivables turnover, days’ sale inventory and inventory turn over.
As interest is forbidden, it is difficult for sharia financing to adjust in cash financing required by liquidity management. However some scholars have proposed qardh and hawala as alternative but there is still argument in determining the administration fee. Another scholars have proposed murabaha system but it makes the facility difficult to distinguish it with working capital facility.
REFERENCES
Antonio, Muhammad Syafii, Bank Syariah : Dari Teori ke Praktek, Gema Insani Press, Jakarta: 2001
Arifin, Zainul, MBA, Menyoal Konsep Rekening Koran Syariah, in www.tazkiaonline.com/print.php3?sid=450, June 5th, 2004
Baraba, Achmad, Prinsip Dasar Operasional Perbankan Syariah, in
www.bi.go.id/bank_indonesia2/utama/ publikasi/upload/bemp-vol-2-no-3-des99.pdf, June 5th, 2004
Office of the Superintendent of Financial Institution Canada, Standards of Sound Business and Financial Practices - Liquidity Management, in www.osfi-bsif.gc.ca/eng/documents/guidance/docs/f10e.pdf, in June 6th, 2004
www.bankersonline.com/tools/riskmgt_liquidityrisk.doc, May 28th, 2004-06-30
www.islamic-banking.com/shariah
www.soba.fortlewis.edu/mull/ba382/powerpoint/ch09.ppt, May 28th, 2004
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