| Summary: | Financial education and literacy are important in personal life to make prudent
financial decisions. Without proper financial decisions, an individual may fall into
various types of financial difficulties. Recently, a survey by Credit Counselling and
Debt Management Agency (AKPK), reported that one out of three Malaysians still
have a low level of confidence in personal financial management. Moreover, one out
of ten Malaysians confessed that they are not good enough at managing their
financings. As a result, Malaysian households, especially with low income, are still
experiencing the excessive debt burden, inadequate savings and lack of capital. To
address the issues, the study aims to develop an Islamic debt and wealth management
framework. The framework outlines Shariah guidelines upon personal debt and wealth
management with a view to improving Malaysians' financial behaviour in managing
debt and wealth. In order to achieve the aims, the study us d ualitative methods
whereby primary data collected through semi-structured interviews. Purposive
sampling technique was used to reach a sample of 12 informants from the Shariah
experts of the International Shariah Research Academy (ISRA) and the officials of
AKPK in Kuala Lumpur, Malaysia. Moreover, the study has used a thematic analysis
technique to analyse the data. Nvivo software was used for coding the data. The
findings of the study reveal that there are several elements in Islam, which may
improve the financial behaviour of the Malaysians. Islam discourages debt and loan to
satisfy unnecessary desires as loan and debt should be taken only to fulfil the
necessities. Besides, Islam suggests the creditor restructure the instalment and to
extend the deadlines of debt if the debtor is in financial trouble. Furthermore, Islam
encourages individuals to accumulate wealth, be prudent in spending without
following the desires and protect the wealth form any loss and uncertainty, so that
they can build capital and avoid excessive debt and loan. The findings of the study
may improve the Malaysian borrowing behaviour and enable them to become efficient
in personal wealth and financial management. Besides, the findings may improve the
knowledge of students, researchers and practitioners in the field of Islamic finance.
Based on the findings, it is recommended to study further on the applicability of
Islamic philanthropy to reduce personal financial difficulties in Malaysia.
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