Product details

The case focuses on the application of the concept of Musharakah Mutanaqisah (MM) in home financing, which is considered closer to the spirit and objectives of Shariah. It could be applied to various types of financing such as housing, vehicle, working materials and equipment as well as business projects. Nonetheless, it is noted in this case that MM is practiced differently by the various Malaysian banks. These differences include among others: 1 - Documentation; 2 - Approaches to default; 3 - Early settlement; 4 - Abandonment of the project, etc. The main issues presented in the case are: 1 - Which, among the approaches practiced in Malaysia, is most suitable?; and 2 - Have all the banks taken enough measures as per required by Shariah to ensure the risk was entirely the customer's?