Musharakah Al-Mutanaqisah Islamic home finance in dealing with abandoned housing projects in Malaysia: Features, issues, and prospects

• Main Author: Md Dahlan, Nuarrual Hilal
• Format: Article
• Language: English
• Published: IJEISR 2018
• Subjects: K Law (General)
• Online Access: http://repo.uum.edu.my/24900/1/IJEISSSR%203%201%2014%202018%201%2013.pdf; http://repo.uum.edu.my/24900/; http://ijeisr.net/#issue

Islamic Banking has been established since 1980s in Malaysia. It was initially commenced with the incorporation of Bank Islam Malaysia Berhad (BIMB) in 1983. Until today, Islamic Banking has robustly developed in Malaysia providing various kinds of Islamic transaction products including Islamic home finance. Various Islamic Home Finance products have been introduced and practised in Malaysia. Among the products are: Bay’ Bithaman al-Ajil (‘BBA’), Musharakah al-Mutanaqisah (‘MM’), Commodity Murabahah (‘CM’) and Ijarah Mausufah Fi Zimmah (‘IMFZ’). Nonetheless, there are many issues in these products when faced with the problems of abandoned housing projects in Malaysia. One of the issues is the inadequacy of the Islamic Home Finance products to deal with the issues of abandoned housing and give equitable and fair terms to the aggrieved purchaser consumers. This paper aims to highlight and study the terms in MM and how this Islamic Home Finance product deals with the problems of abandoned housing projects. The focus of this paper is the MM as applied by Affin Islamic Bank Berhad in Malaysia. This paper used shariah (Islamic Law) and legal doctrinal and qualitative textual analysis methodologies. This paper finds that the current applicable terms in MM as practised by Affin Islamic Banks in Malaysia are inadequate and warranted them to be replaced with terms that can provide equitable protection to the aggrieved purchaser consumers in abandoned housing projects thus can fully comply with the requirements of the shariah (Islamic Law). The outcome of this paper will help the Islamic banking industry in dealing with issues in abandoned housing projects in Malaysia and provide protection to the aggrieved purchaser consumers.