Does Tawarruq still remain the top option for Islamic home financing (IHF) products in Malaysia?

Abstract

Purpose The purpose of this study is to investigate whether Tawarruq Islamic home financing (IHF) products remain untouched and maintain their position as the top IHF product in Malaysia. Design/methodology/approach The study adopted a qualitative research methodology that included both literature review and content analysis. Firstly, the existing studies and literature were reviewed to compare different types of IHF. The composition of IHF products offered by these Islamic banks was then investigated further to analyse each bank’s progress in IHF from 2015 to 2019. The data were gathered from bank websites, brochures, product disclosure sheets and annual reports. Findings The findings reveal that around 62.5% of Islamic banks offered Tawarruq for IHF in the year 2020. For the banks that offered Tawarruq, the amount of the financing continued to grow each year. The plausible reason for the preference for Tawarruq was its less risky nature, despite facing numerous operating, legal and Shariah issues. Research limitations/implications This study has several limitations, including the fact that it was limited to home financing products only, the methodology used and the research period. Practical implications This study aimed to provide beneficial insights into the use of Tawarruq, which has been a source of concern for regulators as well as steps made to reduce its usage in the industry. Islamic banks should be more proactive in developing non-Tawarruq products to enhance product innovation in the market and minimise the heavy reliance on debt-based products. Originality/value This study provides useful insights by analysing IHF in depth for each Islamic bank and making recommendations for future research. Specifically, the method facilitated critical discussions and comparisons to previous research findings as to why Tawarruq has remained popular.

A systematic review of customer Sharia compliance behaviour in Islamic banks: determinants and behavioural intention

“…According to Maqasid al-Shariah, the findings are criteria that tend to gauge the performance of Islamic banks. Specifically, Ibrahim and Mohd Sapian (2022) highlighted research on the influence of customer preferences on house financing decisions and their enthusiasm for Islamic banking products. Minaryanti and Mihajat (2023) conducted a detailed research analysis on the relationship between Sharia governance from the Sharia Supervisory Board and internal Sharia compliance, as well as its effect on the performance of Islamic banks.…”

“…Several research studies have examined customer views and attitudes toward Islamic banking products and identified the factors influencing consumer compliance with Islamic standards (Shah et al , 2023). Another study has explored the characteristics that influence customer selection of Islamic banking services, focusing on the Sharia compliance behaviour of bank customers (Ibrahim and Mohd Sapian, 2022). Additionally, previous authors explore the elements that influence the selection of Islamic banking services, shedding light on Islamic client behaviour (Hoque et al , 2022).…”

Futbol Kulüplerinin Borçlarının Teverruk Yöntemi ile Yapılandırılmasının Finansal Açıdan İncelenmesi

“…Bu bakış açısıyla teverruk, İslama uygun olmayan muameleler için kanunu dolanma olarak nitelendirilmektedir. Bu yönüyle karşı çıkanlara ek olarak borca dayalı yöntemlerin piyasada baskın olmasının önüne geçmekte fayda olduğu yönünde görüşler de mevcuttur [5].…”

“…Bu önemli bir özelliktir. LME'de bakır, nikel, alüminyum, çinko, kurşun gibi metallerin yanı sıra platin, altın, gümüş, paladyum gibi değerli metallerin de ticareti yapılmaktadır [5].…”

“…Toplam finansman portföyünün 3 bankada %80'den fazlası, 6 bankada %60-%80 arası, 2 bankada ise %40-%60 arası kısmı teverruk tabanlı ürünlerden meydana gelmektedir [4]. Teverruğun yaygınlaşmasının en önemli sebepleri, diğer İslami finansman yöntemlerine kıyasla uygulamasının daha basit olması ve finansman sağlayan için riskinin daha düşük olmasıdır [5]. Teverruğun, konvensiyonel bankaların sunduğu imkanların alternatiflerini üretmede kullanışlı olacağı görüşü de giderek yaygınlaşmaktadır.…”