Search results

1 – 10 of 131
Article
Publication date: 3 August 2012

Mariam Jamilah Abdul Jalil and Zuriah Abdul Rahman

The purpose of this paper is to determine whether the amount of profits gained from musharakah mutanaqisah model using coupon rate of 4.5 per cent, price at par and tenure…

2770

Abstract

Purpose

The purpose of this paper is to determine whether the amount of profits gained from musharakah mutanaqisah model using coupon rate of 4.5 per cent, price at par and tenure of five years was greater than using ijarah principle where the price is at a discount. Also to compute and compare the profits obtained from sukuk investment in ijarah and musharakah mutanaqisah for 3.5 per cent coupon rate and price at par for a sukuk with tenure of 12.5, 15, 17.5 and 19 years.

Design/methodology/approach

In total, two models were used to calculate profit. These models are based on ijarah and musharakah mutanaqisah principles. Formulas are derived from ijarah and musharakah and mutanaqisah principles used in sukuk.

Findings

Sukuk investment using ijarah principle is found to be a better investment alternative than musharakah mutanaqisah principle, regardless of the number of years of the sukuk, as long as it is a long‐term tenure. However, for short‐term tenure, the latter is preferred based on the amount of profits generated.

Research limitations/implications

The formulas and results shown in this research are just one of the mathematical approaches that can be used for decision making in sukuk investment. There are other approaches which may deemed to be more effective in decision making. This research was applied only to ijarah and musharakah mutanaqisah types of investment.

Practical implications

The results in the research will assist in making a quick decision on what type of sukuk investment for the investors and issuers and which will be suitable given the amount of financial resources and duration of the investment period.

Originality/value

Many researchers have attempted to study the implications of using mathematical formulas to guide decision making on the choice of sukuk investment and this research has, to a certain extent, concurred with and complemented the works of past researchers. Additionally it will create awareness and provide more information to potential investors on better sukuk investment alternative principles from a mathematical point of view.

Details

Qualitative Research in Financial Markets, vol. 4 no. 2/3
Type: Research Article
ISSN: 1755-4179

Keywords

Book part
Publication date: 20 January 2022

Alam I. Asadov

The majority of economic crises impact the wealth of people which in turn affect their financial capacity to purchase residential properties. However, the home financing…

Abstract

The majority of economic crises impact the wealth of people which in turn affect their financial capacity to purchase residential properties. However, the home financing method may also have an impact on the behaviour of house prices. This chapter intends to test argued resilience of Islamic finance to situations of financial crisis by using an Islamic home financing product called Enhanced Musharakah Mutanaqisah (EMM) which was proposed by Asadov and Ibrahim (2018) as an example and compare its performance to conventional mortgage. Two different models of home financing, conventional and EMM based ones are developed with the former reflecting basic features of conventional mortgage and the latter using rental rates and house price indices for product pricing. Both models are compared using aggregate data for the US housing market for the past 30 years in order to demonstrate the resilience of the EMM model. The findings of the study show that EMM is more flexible in terms of reflecting real situations in both the housing market and aggregate economy as compared to the conventional model. Its pricing is more accommodating particularly during times of economic downturns, and it can potentially provide the solution to numerous mortgage defaults arising from such conditions. Despite the proposed models being tested using data only from the United States, the analysis can be generalized for other countries as well. The implementation of the EMM model, as an example of Shariah-based Islamic financial product, is expected to bring fairness and justice in the relationship between financial institutions and its clients. To the best of our knowledge, this is the first attempt of simulating a Musharakah Mutanaqisah based home financing using both actual rental rates and house prices for product pricing.

Article
Publication date: 2 May 2017

Hasnan Baber

This paper aims to provide comprehensive review of Islamic housing finance models. The paper provides detailed mechanism and solution to contemporary issues of these models..

Abstract

Purpose

This paper aims to provide comprehensive review of Islamic housing finance models. The paper provides detailed mechanism and solution to contemporary issues of these models..

Design/methodology/approach

This paper is conceptual in nature. Based on an extensive study of literature, this paper explains working of two Islamic models al-Bay’ Bithaman Ajil (BBA) and the Musharakah Mutanaqisah (MM) with hypothetical examples.

Findings

It was revealed in the study that BBA is just convergence of conventional housing finance and does not fall in line with shariah regulations. MM approach is a relative new concept and strictly following shariah guidelines. MM approach is based on welfare for all rather than profit for few. There were some issues spotted with MM model when implemented on the ground, and hence this study came up with solution to such issues.

Research limitations/implications

This paper cannot be tested until the models are practically applied. This MM contract is new and will take some time to be accepted by customers, but its reliability promises it..

Originality/value

This study is original and new, as it finds BBA not permissible which no other study has concluded so far. Also issues in these models, and their solutions were studied first time.

Details

Qualitative Research in Financial Markets, vol. 9 no. 2
Type: Research Article
ISSN: 1755-4179

Keywords

Content available
Book part
Publication date: 14 December 2018

Abstract

Details

Management of Islamic Finance: Principle, Practice, and Performance
Type: Book
ISBN: 978-1-78756-403-9

Article
Publication date: 5 October 2022

Yaxin Ma and Fauziah Md Taib

This study aims to propose a new housing affordability solution by combining the Islamic finance concept of Musharakah Mutanaqisah (diminishing partnership) with a…

Abstract

Purpose

This study aims to propose a new housing affordability solution by combining the Islamic finance concept of Musharakah Mutanaqisah (diminishing partnership) with a cooperative and crowdfunding model. The proposed alternative housing loan model is presented to experts in financing and real estate business, whose views and comments were solicited to evaluate the applicability of the proposed model in real world.

Design/methodology/approach

This is a qualitative study that uses semi-structured interviews to determine the initial thoughts of various stakeholders regarding the adoption and implementation of the proposed model.

Findings

The majority of experts (interviewees) agreed with and appreciated the model’s original ideas but expressed concern over the absence of community culture and trust in China, which could represent a serious threat to the model’s viability. It is anticipated that the suggested model will be implemented as pilot projects by the local government in places where Islamic culture and faith are more widespread, hence possibly impacting the model’s effective implementation.

Research limitations/implications

As there are insufficient Islamic financial specialists in China, the limitation of this qualitative study is the small sample size. If certain policymakers could participate, the outcomes would be more hierarchical and trustworthy.

Originality/value

This is, to the best of the authors’ knowledge, the first study of its kind to examine the viability of this innovative Islamic cooperative housing finance scheme within the context of a specific housing issue in China.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 3 June 2014

Hanudin Amin, Abdul-Rahim Abdul-Rahman and Dzuljastri Abdul Razak

The purpose of this study is to propose a theory of Islamic consumer behaviour to explain the factors that influence the Islamic mortgage industry. Although previous works…

6402

Abstract

Purpose

The purpose of this study is to propose a theory of Islamic consumer behaviour to explain the factors that influence the Islamic mortgage industry. Although previous works have shown that conventional marketing theories were, to a certain extent, able to predict factors influencing halal marketing and Islamic mortgage, these theories fail to capture or accommodate the Islamic perspectives of consumer behaviour. Conventional marketing theories have also been found to be inadequate to explain the Islamic mortgage preference among consumers.

Design/methodology/approach

Drawing upon the Maqasid al-Shariah, this study develops an Maqasid al-Shariah index (MSI) and religious satisfaction (RS) for Islamic mortgage industry in Malaysia. These indexes are developed as the basis of the theory development in this setting. The model developed is later examined using survey data.

Findings

This study reveals that education and RS are instrumental in determining the Islamic home financing preference. In contrast, justice and welfare are insignificantly related to the Islamic home financing preference. Religious satisfaction, to a certain extent, plays role not only as a mediator but also as a moderator. We find that RS has a full mediation effect on the relationship between welfare and willingness to consider applying Islamic mortgage. We discover justice is moderated by RS. Education and welfare however are not moderated.

Originality/value

This study contributes to the development of an empirical Islamic framework in predicting consumers’ behaviour in an Islamic mortgage market using a Maqasid approach. This study is also pioneering in introducing two indexes, notably MSI and RS, and applying these indexes to Islamic home financing context.

Details

Journal of Islamic Marketing, vol. 5 no. 2
Type: Research Article
ISSN: 1759-0833

Keywords

Article
Publication date: 18 March 2019

Muhammad Bilal, Ahamed Kameel Mydin Meera and Dzuljastri Abdul Razak

This study aims to examine the issues and challenges in contemporary affordable public housing schemes and proposes an alternative affordable public housing model for low…

4703

Abstract

Purpose

This study aims to examine the issues and challenges in contemporary affordable public housing schemes and proposes an alternative affordable public housing model for low- and middle-income households in Malaysia.

Design/methodology/approach

The paper applied qualitative research method. Semi-structured in-depth interviews with four government officials were conducted to understand the provision, framework and working mechanism of selected affordable public housing schemes. A focus group with nine participants was conducted with low- and middle-income households to validate pertaining residential issues and problems in affordable public housing schemes.

Findings

The overall findings reveal that the growing plights of unaffordability, poor maintenance and mismanagement have undermined the performance of affordable public housing schemes in Malaysia. The paper indicates that Islamic Public–Private Housing Co-operative Model (IPHCM) possibly has a comparative advantage in its design and operation and therefore can be implemented as an alternative model to address these issues in contemporary affordable public housing schemes in Malaysia. The findings also offer guidelines to government officials and managers of public housing schemes to implement the IPHCM model that can help in reducing the financial burden on low- and middle-income households, improving maintenance work and enforcing effective management practices with residents’ participation.

Research limitations/implications

The paper is limited to develop a new Shariah-compliant affordable public housing model. The paper presents a design and defines the underlying Shariah concept and contracts and their working mechanisms in the proposed model. The paper has not considered other related areas in the development of IPHCM model including Shariah and subject matter expert’s perspective, consumer behavioural intention, legal and regulatory requirements.

Originality/value

The paper has relevance for policymakers and government institutions offering affordable public housing schemes to ensure successful deliverability of sustainable and affordable public housing for low- and middle-income households in Malaysia.

Details

International Journal of Housing Markets and Analysis, vol. 12 no. 6
Type: Research Article
ISSN: 1753-8270

Keywords

Article
Publication date: 25 July 2019

Aishath Muneeza, Zakariya Mustapha, Fathimath Nashwa Badeeu and Aminath Reesha Nafiz

The purpose of this paper is to formulate ways in which Maldives could pioneer Islamic tourism on a befitting framework and financing structure as a leverage to develop…

Abstract

Purpose

The purpose of this paper is to formulate ways in which Maldives could pioneer Islamic tourism on a befitting framework and financing structure as a leverage to develop its tourism industry.

Design/methodology/approach

The research uses qualitative approach whereby primary and empirical data on tourism practices as well as relevant laws and guidelines, issued in Maldives and in other Muslim jurisdictions of the Muslim, are analyzed. Doctrinal approach is used in analyzing secondary data on the subject.

Findings

The research reveals the potential of Islamic tourism in Maldives as well as the challenges that have constrained its development in the country. Certainty is needed in halal products, services and conducts. Codifying extant Maldives Halal Tourism Standards will establish legal framework for a standard Shariah-compliant tourism industry. Islamic financing structure enables mobilizing required funds and address financing constraints.

Practical implications

This research presents an insight into establishing and developing Islamic tourism industry in the Maldives. Harmonizing tourism regulations with Shariah shall bring about the required consciousness on Shariah compliance in target tourists and their desires. Private individuals can contribute in mobilizing the much needed Shariah-compliant resources to finance Islamic model resorts befitting an Islamic tourism industry.

Originality/value

The research puts forward proposal that identifies and recognizes a more viable Islamic financing alternative as well as Shariah-compliant regulations to pioneer the development of Islamic tourism in Maldives. The research recommends how to overcome related challenges helps government understand the proposed strategies for establishing Islamic tourism industry.

Details

Journal of Islamic Marketing, vol. 11 no. 4
Type: Research Article
ISSN: 1759-0833

Keywords

Article
Publication date: 29 May 2019

Mohd Zaidi Md Zabri and Razali Haron

This study aims to compare and contrast the financial affordability of Islamic home financing instruments such as bay’ bithaman ajil and musharakah mutanaqisah (MM…

Abstract

Purpose

This study aims to compare and contrast the financial affordability of Islamic home financing instruments such as bay’ bithaman ajil and musharakah mutanaqisah (MM) offered by various home financing institutions in Malaysia.

Design/methodology/approach

Mathematical simulations were carried out in examining the financial affordability (or lack thereof) of various Islamic home financing by both Islamic commercial banks (ICB) and financial cooperatives (FC).

Findings

This study has shown that MM by FC is a workable, more financially affordable option to potential homeowners. Unlike ICB, MM by FC uses rental rates as a benchmarking tool because of its inherent nature of flexibility.

Research limitations/implications

MM by FC has the potential to reduce the cost of home acquisition (purchase affordability) and the amount of monthly installments (repayment affordability) of homeowners in Malaysia.

Originality/value

This study shows the financial implication of unaffordable Islamic home financing instruments may have on the Malaysian households, which were derived from using official data from various government agencies.

Details

International Journal of Housing Markets and Analysis, vol. 12 no. 6
Type: Research Article
ISSN: 1753-8270

Keywords

Article
Publication date: 16 January 2017

Hanudin Amin, Abdul Rahim Abdul Rahman, Dzuljastri Abdul Razak and Hamid Rizal

The purpose of this study is to investigate the effects of service quality, product choice and Islamic debt policy on consumer attitude within the context of Islamic…

2623

Abstract

Purpose

The purpose of this study is to investigate the effects of service quality, product choice and Islamic debt policy on consumer attitude within the context of Islamic mortgage sector in Malaysia. The present study also examines the effect of attitudinal-behaviour on consumer preference towards preference of Islamic mortgage selection.

Design/methodology/approach

The study is based on questionnaire survey. Data are collected using sample from customers of Islamic banks in Malaysia. The study collects 351 respondents. Data are analysed using partial least squares (PLS).

Findings

The results indicate that service quality, product choice and Islamic debt policy significantly influence consumer attitude, in turn, affecting the Islamic home financing preference. Consumer attitude also mediates the effects of service quality, product choice and Islamic debt policy on the Islamic home financing preference.

Research limitations/implications

Several limitations warrant future research. First, this study considers only a specific user group in one public university. Second, this study does not consider attitude as a moderator. Third, this study suffers from the limited number of factors used. These limitations, however, provide directions for future research.

Practical implications

Our results will add value to the consumer preference topic for Islamic home financing literature. The present study provides bank managers with valuable insights into better planning of Islamic home financing services in Malaysia.

Originality/value

This study is a pioneering effort at exploring consumer attitude and preference from the context of Islamic mortgage sector in Malaysia. The use of PLS analysis provides another important contribution to the literature in this area.

Details

Management Research Review, vol. 40 no. 1
Type: Research Article
ISSN: 2040-8269

Keywords

1 – 10 of 131