Analysis from perspective of maqasid achievement : case study to home financing

Abstract

Islamic banks offer various banking products and services with different nature to meet the different needs of the customers. Yet, the Islamic banking product offered by the Islamic banks must be in line with the Shariah objectives (maqasid al-Shariah) which are centralized on the objectives of accomplishing the development of both the spiritual and social-economic well-being. The main objective of this study is to analyze the debt-based (bay bithaman ajil) and equity-based financing (musharakah mutanaqisah) from perspective of maqasid achievement. Although there have been many literatures discussing the debt-based financing (bay bithaman ajil) and equity-based financing (musharakah mutanaqisah), analysis on maqasid achievement is still lacking. Bay bithaman ajil and musharakah mutanaqis?ah concepts normally being applied in home financing facilities. However, bay bithaman ajil is said to be most popular in Malaysia country as compared to the musharakah mutanaqisah. It also considered as a most debated Islamic financing modes among Shariah scholars locally and internationally in term of its validity and Shariah compliance. The aim of this paper is to review the contract, structure, features, procedures and also the issue pertaining to both Islamic contracts. This study also intends to measure the maqasid achievement towards the products using four specific Shariah objectives: Shariah compliant, fair and transparency, maintaining harmony and marketability. Semi-structured interview and survey questionnaire will be conducting to achieve the research objectives. The findings of this thesis indicate that, musharakah mutanaqisah home financing achieves higher level of maqasid because the mean score for each and every parameter is relatively higher than the bay bithaman ajil contract.