Bai Bithaman Ajil (BBA) and Musharakah Mutanaqisah (MM): Comparative Analysis

Abstract

A comparative analysis between Bai Bithaman Ajil (BBA) and Musharakah Mutanaqisah (MM) for the home buyers preference in choosing Islamic home financing. There are three main variables that are being used to identify most influenced factor which are Shariah compliant, pricing, and equality. All variables have a significant value towards preference on Islamic home financing, it meet the purpose of the Shariah (Maqasid al Shariah). MM home financing mode is more preferable based on Mean value as Shariah compliant and Equality shows a higher value compared to BBA. These results may help Islamic banking in Malaysia in order to expand the market to compete with conventional bank.