Keywords: Debt-taking, Charity-giving, Low-income Households


Households’ financial problem was perceived to be solved by taking other source of fund such as debt. In Islam, taking debt should be considered as the last resource when other sources were not available. Islam gives solution for those who have financial problem. Giving just small amount of money would give barakah to the giver. Charity-giving is not privilege for the rich people, but also for those in dire conditions. This paper attempts to explore whether low-income households’ perception on consecutive debt-taking influences their perception on regular charity-giving especially to achieve stipulated outcomes, i.e. households’ financial resilience. Structural Equation Modelling (SEM) is employed to analyse 1780 data from respondents across six areas in Indonesia. Low-income households perceived consecutive debt-taking to have negative relationship with regular charity-giving and positive relationship with outcomes (households’ financial condition and lifestyle satisfaction). Meanwhile, regular charity-giving has negative relationship with the outcomes when consecutive debt-taking intervene the relationship. Financial education and selection of financing institution have been proven to have relationships with variables which influence both regular charity-giving and consecutive debt-taking behaviours. As recommendation, charity education or sharing values should be included in the current financial education program. Formal financial institutions and social finance institution should also encourage supervision and continuously give financial education to social funds receivers.

Author Biographies

Laily Dwi Arsyianti, Leturer, Bogor Agricultural University

Laily is currently PhD candidate at the IIUM Institute of Islamic Banking and Finance, International Islamic University Malaysia (IIUM). She graduated from the same institution to earn her Master of Science in Finance degree, and Bogor Agricultural University (Institut Pertanian Bogor, or IPB), Indonesia for her Bachelor degree. She is attached with her under-graduate institution in Department of Islamic Economics, Faculty of Economics and Management (FEM). Her research interests include Islamic banking and finance and behavioural finance. She has published some of her research in refereed academic journals and earned grants to present in several conferences.

Scopus ID: 57190190979


Salina Kassim, Associate ProfessorIIUM Institute of Islamic Banking and Finance

Dr Salina Kassim is currently Associate Professor at the IIUM Institute of Islamic Banking and Finance, International Islamic University Malaysia (IIUM). Prior to becoming an academician, she has several years of working experience in a commercial bank in Malaysia. She teaches Money and Banking, and Islamic Banking and Finance at the under-graduate level, and Islamic Financial System, Financial Economics and Contemporary Issues in Islamic Finance at the graduate level. Her research interests include Islamic banking and finance, and monetary/financial economics. She has published extensively in refereed academic journals in her areas of research interest. Dr Salina also sits on the editorial boards of several reputable international journals. She earned her PhD in Monetary Economics in 2006 from the IIUM and her Masters and Bachelor degrees from the USA in 1992 and 1994, respectively.

Scopus ID: 32667637500


Adewale Abideen Adeyemi, Associate ProfessorIIUM Institute of Islamic Banking and Finance

Bachelor of Science (Hons), University of Ilorin

Master of Science in Finance, University of Lagos Akoka, Nigeria

Ph.D in Business Administration, IIUM

Area Specialization: Corporate Finance, Islamic Finance

Scopus ID: 56924968200



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How to Cite
Arsyianti, L., Kassim, S., & Adeyemi, A. (2018). DEBT-TAKING AND CHARITY-GIVING AMONG LOW-INCOME HOUSEHOLDS: STRENGTHENING RESILIENCE IN ISLAMIC PERSPECTIVE. Journal of Islamic Monetary Economics and Finance, 4(1), 1 - 22.