Purpose – The purpose of this paper is to investigate the effects of subjective norm, relative advantage, simplicity, compatibility and perceived behavioural control on the Islamic home financing adoption. It also examines the effects of subjective norm, relative advantage, simplicity and compatibility on attitude. Analyses of attitude as a mediating factor are also provided. Design/methodology/approach – Survey data from 237 usable questionnaires are employed to test the hypothesized relationships. The proposed hypothesized relationships are examined using partial least squares (PLS). Similarly, PLS is also extended to analyse attitude as a potential mediator for the relationships between subjective norm, relative advantage, simplicity and compatibility with the Islamic home financing adoption. Baron and Kenny's (1986) procedure is used to evaluate the role of attitude as a potential mediating factor in the research's framework. Findings – This study discovers an integrative approach that is valid in the...

An integrative approach for understanding Islamic home financing adoption in Malaysia

Purpose – The purpose of this study is to propose a theory of Islamic consumer behaviour to explain the factors that influence the Islamic mortgage industry. Although previous works have shown that conventional marketing theories were, to a certain extent, able to predict factors influencing halal marketing and Islamic mortgage, these theories fail to capture or accommodate the Islamic perspectives of consumer behaviour. Conventional marketing theories have also been found to be inadequate to explain the Islamic mortgage preference among consumers. Design/methodology/approach – Drawing upon the Maqasid al-Shariah, this study develops an Maqasid al-Shariah index (MSI) and religious satisfaction (RS) for Islamic mortgage industry in Malaysia. These indexes are developed as the basis of the theory development in this setting. The model developed is later examined using survey data. Findings – This study reveals that education and RS are instrumental in determining the Islamic home financing preference. In co...

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Theory of Islamic consumer behaviour: An empirical study of consumer behaviour of Islamic mortgage in Malaysia

This paper investigates whether FS affects bank liquidity risk. Using the Malaysian banking data sets, we compare the FS-liquidity risk relationships between the Islamic and conventional banking institutions. FSs are measured by real estate financing, financing concentration, short-term FS stability, and finally medium-term FS stability. Meanwhile, for liquidity risk measures, we adopt the BASEL III approach such as liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR) in quantifying short- and long-term liquidity risk, respectively. The unbalanced static panel regressions of 27 conventional and 17 Islamic banks from 1994 to 2014 were analyzed to evaluate the relationships. Our results illustrate that increasing number of real estate financing and short-term FS stability of the Islamic banks may increase both their short- and long-term liquidity risks. On the other hand, even though real estate financing does not affect liquidity risks of the conventional banks, increasing short-term FS stability and financing specialization may increase their long-term liquidity risk. As the liquidity risk behavior, to some extent, differs between the two banking systems, we recommend the regulatory bodies and market players to develop a separate liquidity risk management framework for conventional and Islamic banking institutions.

Does financing structure affects bank liquidity risk

Purpose




The purpose of this paper is to understand consumers’ willingness to choose Islamic mortgage products as a way to help Islamic banks tap into the Islamic mortgage sector in Malaysia.




Design/methodology/approach




Using the Theory of Interpersonal Behaviour as a point of departure, this study proposes a framework that examines factors influencing consumers’ willingness to choose Islamic mortgage products. A total of 282 usable surveys are obtained from customers of Islamic banks and the data were analysed using partial least squares.




Findings




The results indicate that affect, social factors, and facilitating conditions influence willingness to choose Islamic mortgages. Besides these factors, the added factors, namely, perceived risk and perceived financial benefit, significantly influence consumers’ willingness to choose Islamic mortgages.




Research limitations/implications




This study is confined to two public universities in Malaysia. Further testing of the proposed model across different population groups is necessary to determine the generalisability of this study’s findings. This study applies consumer factors such as affect, social factors, facilitating conditions, perceived risk and perceived financial benefit. Further testing on other factors is needed to expand the findings in this area.




Practical implications




The results could help bank managers make improved decisions about the factors which they need to effectively market Islamic mortgage products. This study provides insights and guidance for bank managers to manage Islamic mortgage products.




Originality/value




The main contribution of this paper is a proposed framework of consumers’ willingness to choose Islamic mortgage products which takes into account the key factors necessary to predict consumers’ demand.

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Malaysian consumers’ willingness to choose Islamic mortgage products: An extension of the theory of interpersonal behaviour

The aim of this research is to develop a conceptual model that includes variables related to financing modes, risk-taking, efficiency, and Islamic bank profitability in GCC Countries. The results i...

https://www.tandfonline.com/doi/pdf/10.1080/23322039.2020.1750258

Financing modes, risk, efficiency and profitability in Islamic banks: Modeling for the GCC countries

Bank liquidity is a key element in managing the assets of a bank. Bank liquidity is an important element in managing the assets of a bank. The robust and sound liquidity management could raise funds to meet the demands of depositors and borrowers at any time with a satisfactory price. Without sufficient liquidity, the bank may face other risks, such as various forms of fiduciary risk, displaced commercial risk as well as other risks that affect the banks financial stability as a whole. Thus by using a dynamic panel data estimation for 17 Islamic banks, this study tried to see how Islamic banking of Malaysia manage their liquidity in response to changes on the basis of several factors other than providing a realistic number of policy implications.

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How Islamic Banks of Malaysia Managing Liquidity? An Emphasis on Confronting Economic Cycles

Produk Pembiayaan Secara Islam telah mula berkembang pesat dalam arus industri perbankan dan kewangan pada masa ini. Keadaan ini antaranya boleh dilihat melalui pertambahan aset perbankan Islam saban tahun di samping penyertaan lebih banyak institusi yang menawarkan produk secara Islam. Produk pembiayaan perumahan Islam contohnya menampilkan pengaplikasian konsep syariah seperti Murabahah, Bay ‘Bithaman Ajil (BBA), BBA komoditi, Ijarah Thumma Bay‘, Istisna’ dan Musharakah Mutanaqisah (MM). BBA paling banyak digunakan dalam menawarkan produk pembiayaan perumahan secara Islam sementara penggunaan konsep lain seperti MM masih lagi dianggap baru. MM adalah kontrak hibrid berasaskan perkongsian dan diakhiri dengan pemilikan tunggal. Konsep ini mula diaplikasi dalam amalan perbankan di Malaysia selepas tahun 2000. Konsep berasaskan ekuiti adalah sangat digalakkan penggunaanya dalam muamalat Islam berbanding konsep berasaskan hutang seperti BBA. Justeru kajian ini akan menganalisis kelebihan yang terdapat dalam produk berasaskan konsep MM dengan tumpuan kepada produk pembiayaan perumahan yang ditawarkan Kuwait Finance House Malaysia Berhad (KFHMB).
				
				Kata kunci: Produk pembiayaan perumahan Islam; Musharakah Mutanaqisah
				
				Islamic finance products has grown rapidly in the current banking and financial industry. This situation can be seen by the increasing of Islamic banking assets each year in addition to the participation of more institutions offering Islamic products. Islamic home financing products in Islamic banks use the concepts of Murabahah, Bay ‘Bithaman Ajil (BBA), BBA commodities, Ijarah Thumma Bay ‘, Istisna’ and Musharakah Mutanaqisah (MM). BBA concept is the most mode of financing use in Islamic home financing products, while others use the concept of MM. MM is a hybrid contract–based on partnerships. This concept was applied in banking practice in Malaysia since 2000. The concept of equity–based are very much encouraged to be used in the Islamic muamalat than debt–based concepts such as the BBA. Hence, this study will analyze the advantages of the products based on the concept of MM with a focus on home financing products offered by Kuwait Finance House Malaysia Berhad (KFHMB).
				
				Key words: Islamic home financing products; Musharakah Mutanaqisah

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Pembiayaan Perumahan Secara Islam Di Malaysia: Analisis Kelebihan Produk Berasaskan Musharakah Mutanaqisah Di Kuwait Finance House Malaysia Berhad (KFHMB)

The purpose of this article is to investigate the relationship between financing risk and profitability of Malaysian Islamic banks to find the impact of financing risk on bank profitabily in achieving high level of stability. A regression analysis is built on an unbalanced panel data set comprising 175 observations of 17 top Malaysian Islamic banks over the period 1994-2015. To this end, the empirical data are collected from individual Islamic banks’ financial statements as submitted to the Central Bank of Malaysia for supervisory purposes. Complementary sources include the Global Market Information Database, the World Bank's Annual Report through the International Monetary Fund (IMF), Statistical, Economic and Social Research and Training Center for Islamic Countries (SESRTCIC) and Asian Development Bank (ADB). All the determinant variables included in the model have statistically significant impacts on Malaysian Islamic banks’ profitability. However, the effects are not uniform across profitability measures. Regression findings reveal that capital ratio, financing loss provision and liquidity ratio significantly affect the profitability of Islamic banks. Some variables of monetary policy variables such as interest rate and interbank rate have a significant role on the Islamic banks’profitability. Interestingly, there is a difference of the two variables where interest rate shown negative sign while positive sign from interbank rate. Findings also suggest the economic conditions factors such as GDP growth and unemployment also affects the profitability of Islamic banks despite the sign is different.

/pdf/the-determinants-of-bank-profitability-how-malaysian-islamic-3ez9wgza4d.pdf

The Determinants of Bank Profitability: How Malaysian Islamic Banks Response to the Financing Risk

Banking system in every country tends to demonstrate unique characteristics. This uniqueness is formed by economic conditions, supervision management, legal structure and social environment of a country. The implication that can be seen is the different evolution phrases and development of the banking system. The same can be said of the Islamic banking growth and development. Initially developed as an industry to fulfill the Muslim religious community needs, it has now become a multibillion dollar industry. This rapid development spread to every corner of the world including South-East Asia and has received encouraging reaction from the Muslim and non-Muslim communities alike. In this paper, an attempt is made to study the historical development of Islamic banking sector in the selected South-East Asia countries country. Content analysis methodology was applied on this research paper. The historical development was examined from aspects of development, growth and current position in the national banking system of the respective countries. The results show that Islamic banking industry developed and evolved in a number of South-East Asia countries including Brunei, Philippines, Indonesia, Malaysia, Singapore and Thailand. Besides that, In South-East Asian countries, there are formal and no formal Islamic banking activities. However, there are some informal arrangements in these countries for mobilizing financial resources.

Mohammad Taqiuddin Mohamad

Papers

How Islamic Banks of Malaysia Managing Liquidity? An Emphasis on Confronting Economic Cycles

Pembiayaan Perumahan Secara Islam Di Malaysia: Analisis Kelebihan Produk Berasaskan Musharakah Mutanaqisah Di Kuwait Finance House Malaysia Berhad (KFHMB)

The Determinants of Bank Profitability: How Malaysian Islamic Banks Response to the Financing Risk

The historical development of modern Islamic banking: A study in South-east Asia countries

Perbankan Islam Di Malaysia: Tinjauan Strategi Pengukuhannya