A comparative analysis between musharakah mutanaqisah and al-bay` bithaman ajil contracts under the islamic home financing in Malaysia

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Author: 
Abu Hasnat, Shahedin Alom and Kamrul Islam Talukder
Abstract: 

House is one of the essential needs for every human being. People mostly use conventional financing to finance their home. The conventional system is based on interest which is entirely prohibited in Islam, its utilization is not recommended. Islamic home financing such as Bay Bithaman Ajil (BBA) and Musharakah Mutanaqisah (MM) are proposed as an alternative home financing. MM is believed to be a better option than BBA nowadays. This study uses a convenient sampling technique by using a questionnaire for college students and employees at the securities commission because of the need to explain the product features for BBA and MM home financing. The result showed that MM as an alternative home financing is trusted and perceived by the customer to substitute BBA application. Furthermore, MM is recognized as the product whereby it perceived as a fully-Shariah product compares with BBA and conventional financing. In Malaysia, housing stock has increased since 2005-2015 but the supply of housing still experiencing deficiencies. It is shown by the gap between housing stock and household number broaden to 2.5 million units in 2015. HSBC Amanah looks the potential visibility for MM product to be marketed for low income to high-income customers and also sustain in the market due to fulfilling Maqasid Al-Shariah and also high-profit generation.

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   Vol. 07, Issue 03, March 2017

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