Publication: Potential use of equity-based financing
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Date
2020-07
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Universiti Sains Islam Malaysia
Abstract
To see how far the potentiality of Equity-based Financing (EBF) implementation in Malaysia, there are 3 sub aims should be achieved. First is to explore the issues of EBF. To achieve this aim, semi-structured interviews are employed including a total of 7 key personnel of Malaysian IB. They are selected based on their experiences in industries. By using Nvivo12 software in analyzing the data received, the findings revealed that there are 2 outcome issues which includes of supply (IB) and demand (customers) side. Competition, Shariah, legality and risks are resulted in supply-side issues, while, knowledge (KW), understanding (UD), awareness (AW) and religiosity believe (RB) are resulted in demand-side issues. They perceived there is potentiality to implement the EBF in Malaysia, if Malaysian IB put an effort in marketing and enhance the risk management practice. However, major attention should be focus on factors of attitude (ATT) and intention (INT) among customers as to see how far the potentiality to implement EBF. Then, this study investigates whether cognitive and affective has positive effect on ATT and INT (known as conative measures). Also, this study aim to investigate the mediator effect on INT to purchase EBF. A total of 500 users and 500 non-users of financing that are Malaysian Muslim is included in the survey. By using structural equation modelling (SEM) to examine the survey data, the findings are largely support the hypothesized relationships proposed in the models. The results revealed that the different types of customers gives different significant towards their ATT and INT. However, it is very interesting to note that the majority of the respondents expected EBF to be capable of safeguarding their interest and this is crucial to the Malaysian IB, as this position seems generally agreed and expected by majority of the respondents. Therefore, the potentiality to implement the EBF will ensure a promising future for EBF. Several recommendations are also proposed in order to revitalize the soul and spirit of Shariah which fundamentally portray the effectiveness of Islamic finance particularly in dealing with EBF for the benefit of societies as a whole. Lastly, this study has provided good insight support in upholding issues and strategies for both side. Then, this study also has contributed extention of meta-analysis and the results are integrated with Tri-component Attitudes Model which adapting models into a single ATT-INT Model. Based on the results from interviews, this study has contributed extention of 4 cognitive measures (KW, AW, UD, RB). In practical side, this study contributed on extensive product development context and also provided good indication for regulators as help them to give attention on economic value of EBF.
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Keywords
Finance, Religious aspects, Islam, Derivative securities, Malaysia
Citation
Siti Nor Amira binti Mohamad. (2020). Potential use of equity-based financing [Doctoral dissertation, Universiti Sains Islam Malaysia]. USIM Research Repository.