Towards an application of musharakah mutanaqisah principle in Islamic microfinance

This paper is aimed at explaining the application of musharakah mutanaqisah into a newly context of Islamic microfinance. The term Islamic microfinance is similar to that of conventional but it is varied in terms of Shariah principles used and the prohibition of interest in business operations. Fu...

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Main Authors:	Md Saad, Norma, Abdul Razak, Dzuljastri
Format:	Article
Language:	English
Published:	Unimas 2013
Subjects:	HG1501 Banking
Online Access:	http://irep.iium.edu.my/31020/ http://irep.iium.edu.my/31020/ http://irep.iium.edu.my/31020/1/Article_IJBS_pdf_improved.pdf

id	iium-31020
recordtype	eprints
spelling	iium-310202013-07-29T01:17:53Z http://irep.iium.edu.my/31020/ Towards an application of musharakah mutanaqisah principle in Islamic microfinance Md Saad, Norma Abdul Razak, Dzuljastri HG1501 Banking This paper is aimed at explaining the application of musharakah mutanaqisah into a newly context of Islamic microfinance. The term Islamic microfinance is similar to that of conventional but it is varied in terms of Shariah principles used and the prohibition of interest in business operations. Further, microfinance institutions have been established in many developing countries to solve the problem of poverty. In muslim countries, Islamic microfinance can be a powerful tool to fight poverty if these institutions are managed in the right way. Islamic finance scholars have argued that the provision of equity based financing by Islamic financial institutions will facilitate toward achieving the Islamic socio-economic objectives which include social justice, economic growth, efficiency and stability. This paper illustrates that musharakah mutanaqisah, an equity based financing instrument, is better than debt-based financing because of its flexibility and end result in the ownership of assets on the part of the customer. The paper also highlights musharakah mutanaqisah as an innovative mode of financing and should be a preferred instrument of financing by Islamic microfinance institutions. Our study provides further evidence regarding the applicability of musharakah mutanaqisah into the context of microfinance, thus closing the research gaps. Limitation and potential future work are outlined to assist future researches in the area. Keywords: Islamic microfinance, Profit-loss sharing, Musharakah mutanaqisah, Microfinance, Poverty Unimas 2013-07 Article PeerReviewed application/pdf en http://irep.iium.edu.my/31020/1/Article_IJBS_pdf_improved.pdf Md Saad, Norma and Abdul Razak, Dzuljastri (2013) Towards an application of musharakah mutanaqisah principle in Islamic microfinance. International Journal of Business and Society, 14 (2). pp. 212-223. ISSN 15116670 http://www.ijbs.unimas.my
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG1501 Banking
spellingShingle	HG1501 Banking Md Saad, Norma Abdul Razak, Dzuljastri Towards an application of musharakah mutanaqisah principle in Islamic microfinance
description	This paper is aimed at explaining the application of musharakah mutanaqisah into a newly context of Islamic microfinance. The term Islamic microfinance is similar to that of conventional but it is varied in terms of Shariah principles used and the prohibition of interest in business operations. Further, microfinance institutions have been established in many developing countries to solve the problem of poverty. In muslim countries, Islamic microfinance can be a powerful tool to fight poverty if these institutions are managed in the right way. Islamic finance scholars have argued that the provision of equity based financing by Islamic financial institutions will facilitate toward achieving the Islamic socio-economic objectives which include social justice, economic growth, efficiency and stability. This paper illustrates that musharakah mutanaqisah, an equity based financing instrument, is better than debt-based financing because of its flexibility and end result in the ownership of assets on the part of the customer. The paper also highlights musharakah mutanaqisah as an innovative mode of financing and should be a preferred instrument of financing by Islamic microfinance institutions. Our study provides further evidence regarding the applicability of musharakah mutanaqisah into the context of microfinance, thus closing the research gaps. Limitation and potential future work are outlined to assist future researches in the area. Keywords: Islamic microfinance, Profit-loss sharing, Musharakah mutanaqisah, Microfinance, Poverty
format	Article
author	Md Saad, Norma Abdul Razak, Dzuljastri
author_facet	Md Saad, Norma Abdul Razak, Dzuljastri
author_sort	Md Saad, Norma
title	Towards an application of musharakah mutanaqisah principle in Islamic microfinance
title_short	Towards an application of musharakah mutanaqisah principle in Islamic microfinance
title_full	Towards an application of musharakah mutanaqisah principle in Islamic microfinance
title_fullStr	Towards an application of musharakah mutanaqisah principle in Islamic microfinance
title_full_unstemmed	Towards an application of musharakah mutanaqisah principle in Islamic microfinance
title_sort	towards an application of musharakah mutanaqisah principle in islamic microfinance
publisher	Unimas
publishDate	2013
url	http://irep.iium.edu.my/31020/ http://irep.iium.edu.my/31020/ http://irep.iium.edu.my/31020/1/Article_IJBS_pdf_improved.pdf
first_indexed	2023-09-18T20:45:16Z
last_indexed	2023-09-18T20:45:16Z
_version_	1777409632290996224

Towards an application of musharakah mutanaqisah principle in Islamic microfinance

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