Performance and impact measurement of value-based intermediation implementation by Malaysian Islamic financial institution

This research investigates the performance and impact measurement of Value-Based Intermediation (VBI) adoption in Malaysian Islamic Financial Institutions (IFIs). Since its introduction by Bank Negara Malaysia (BNM) in 2017, VBI has been a cornerstone of IFIs' sustainability efforts. While IFIs have made significant progress, challenges remain in measuring VBI performance and impact. The study evaluates the current VBI performance measurement tools used by IFIs, assesses their alignment with VBI implementation goals, and explores innovative ways to enhance measurement. By conducting an in-depth case study of Alpha Bank, this research develops a comprehensive VBI Impact Measurement (VBIIM) Model that integrates financial, social, and environmental dimensions. The VBIIM Model offers a more holistic approach to measuring VBI performance and impact, addressing the limitations of existing tools. It provides a framework for IFIs to track progress, communicate value creation, and contribute to sustainable development. Key findings reveal significant limitations in existing VBI performance measurement tools, which often fail to capture the full impact of VBI initiatives. The research contributes to the field by offering a practical tool for IFIs to enhance their VBI initiatives and support BNM's vision for a sustainable Islamic finance industry. The study also highlights Alpha Bank's commitment to social responsibility, environmental sustainability, and inclusive finance through its VBI initiatives. Moreover, the research suggests that integrating Stakeholder Theory and Maqasid Shariah elements into the VBI Scorecard can enrich the assessment of VBI performance. The VBIIM Model is a valuable tool for IFIs to measure their VBI implementation's performance and impact, identify areas for improvement, and ultimately guide them toward sustainable practices and enhanced stakeholder engagement.