Halal Investment through the Islamic Capital Market, Perspectives on Opportunities and Challenges in Indonesia

Abstract

The capital market is an alternative source of funding for the government and the private sector which plays a very important role in the progress of economic development. The sharia-based capital market in Indonesia was officially opened on March 14, 2003 with the signing of a Memorandum of Understanding between Bapepam-L-K and the National Sharia Council of the Indonesia Ulema Council (DSN-MUI). In particular, the sharia capital market was developed to meet the needs of Muslims in Indonesia who want to invest in capital market products that are in accordance with the basic principles of sharia. Where Indonesia is a country where the majority of the population is Muslim, it is an opportunity for the development of sharia-based investment. However, behind this progress, there are a number of challenges and problems that need to be faced. The main benefits of this research are to increase knowledge about Islamic finance, provide guidelines for regulators and policymakers to improve a supportive regulatory framework, and open up new opportunities for the development of Islamic investment practices.