Islamic home financing instruments in Malaysia: the emerging issue of financial (Un)affordability
This study compares and contrasts Islamic home financing instruments such as bay bithaman ajil and musharakah mutanaqisah (MM) by Islamic commercial banks, government-owned home financing institution and financial cooperative. Mathematical simulations were carried out in examining the purchase- and...
| Main Authors: | , |
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| Format: | Proceeding Paper |
| Language: | English English |
| Published: |
2018
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| Online Access: | http://irep.iium.edu.my/70254/ http://irep.iium.edu.my/70254/1/70254%20-%20Islamic%20Home%20Financing%20Instruments%20in%20Malaysia.pdf http://irep.iium.edu.my/70254/2/70254%20-%20programme%20book.pdf |
| _version_ | 1848787258436485120 |
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| author | Md Zabri, Mohd Zaidi Haron, Razali |
| author_facet | Md Zabri, Mohd Zaidi Haron, Razali |
| author_sort | Md Zabri, Mohd Zaidi |
| building | IIUM Repository |
| collection | Online Access |
| description | This study compares and contrasts Islamic home financing instruments such as bay bithaman ajil and musharakah mutanaqisah (MM) by Islamic commercial banks, government-owned home financing institution and financial cooperative. Mathematical simulations were carried out in examining the purchase- and repayment-affordability of Islamic home financing instruments by the above-mentioned providers. We have shown that Islamic home financing instruments by Islamic commercial banks are an unaffordable option for most Malaysians, even vis-à-vis the conventional home loan. Although government-owned home financing institution provides the cheapest option for homeowners, it is, however, restricted to civil servants. MM by the financial cooperative, on the other hand, is a workable, more financially affordable option to potential homeowners. The reason for this is that, unlike Islamic commercial banks, MM uses rental rates as a benchmarking tool which is more flexible as well as more responsive to its member-customers’ specificities of localities and types of homes. As a result, it may reduce the cost of home acquisition (purchase-affordability) and the amount of monthly instalments (repayment-affordability) by homeowners in Malaysia. |
| first_indexed | 2025-11-14T17:22:04Z |
| format | Proceeding Paper |
| id | iium-70254 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English English |
| last_indexed | 2025-11-14T17:22:04Z |
| publishDate | 2018 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-702542019-02-13T07:45:15Z http://irep.iium.edu.my/70254/ Islamic home financing instruments in Malaysia: the emerging issue of financial (Un)affordability Md Zabri, Mohd Zaidi Haron, Razali HG1501 Banking HG3368 Islamic Banking and Finance This study compares and contrasts Islamic home financing instruments such as bay bithaman ajil and musharakah mutanaqisah (MM) by Islamic commercial banks, government-owned home financing institution and financial cooperative. Mathematical simulations were carried out in examining the purchase- and repayment-affordability of Islamic home financing instruments by the above-mentioned providers. We have shown that Islamic home financing instruments by Islamic commercial banks are an unaffordable option for most Malaysians, even vis-à-vis the conventional home loan. Although government-owned home financing institution provides the cheapest option for homeowners, it is, however, restricted to civil servants. MM by the financial cooperative, on the other hand, is a workable, more financially affordable option to potential homeowners. The reason for this is that, unlike Islamic commercial banks, MM uses rental rates as a benchmarking tool which is more flexible as well as more responsive to its member-customers’ specificities of localities and types of homes. As a result, it may reduce the cost of home acquisition (purchase-affordability) and the amount of monthly instalments (repayment-affordability) by homeowners in Malaysia. 2018-11-14 Proceeding Paper PeerReviewed application/pdf en http://irep.iium.edu.my/70254/1/70254%20-%20Islamic%20Home%20Financing%20Instruments%20in%20Malaysia.pdf application/pdf en http://irep.iium.edu.my/70254/2/70254%20-%20programme%20book.pdf Md Zabri, Mohd Zaidi and Haron, Razali (2018) Islamic home financing instruments in Malaysia: the emerging issue of financial (Un)affordability. In: 6th ASEAN Universities International Conference on Islamic Finance (AICIF), 14-15 November 2018, Makati, Manila. (Unpublished) http://aicif.net/ |
| spellingShingle | HG1501 Banking HG3368 Islamic Banking and Finance Md Zabri, Mohd Zaidi Haron, Razali Islamic home financing instruments in Malaysia: the emerging issue of financial (Un)affordability |
| title | Islamic home financing instruments in Malaysia: the emerging issue of financial (Un)affordability |
| title_full | Islamic home financing instruments in Malaysia: the emerging issue of financial (Un)affordability |
| title_fullStr | Islamic home financing instruments in Malaysia: the emerging issue of financial (Un)affordability |
| title_full_unstemmed | Islamic home financing instruments in Malaysia: the emerging issue of financial (Un)affordability |
| title_short | Islamic home financing instruments in Malaysia: the emerging issue of financial (Un)affordability |
| title_sort | islamic home financing instruments in malaysia: the emerging issue of financial (un)affordability |
| topic | HG1501 Banking HG3368 Islamic Banking and Finance |
| url | http://irep.iium.edu.my/70254/ http://irep.iium.edu.my/70254/ http://irep.iium.edu.my/70254/1/70254%20-%20Islamic%20Home%20Financing%20Instruments%20in%20Malaysia.pdf http://irep.iium.edu.my/70254/2/70254%20-%20programme%20book.pdf |