Publication:
Ranking the Compliance of Islamic Banking Home Financing Products with Maqasid Shariah Using Ahp

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Abstract

Compliance of Islamic banking products with Maqasid Shariah has been a never-ending debate. However, most discussions are merely explorative, descriptive and perceptive in nature. This article aims to evaluate two types of home financing products in Malaysia based on the Maqasid Shariah of the product development process in Islamic banks. To provide a more coherent and concrete decision, the Analytic Hierarchy Process (AHP) has been used. Bay’ Bithaman Ajil (sale with deferred payment) and Tawarruq (monetization) have been chosen to represent sale-based financing and Musharakah Mutanaqiṣah (diminishing partnership) represents partnership-based financing. The overall results demonstrated that partnership-based financing complied with the social requirements of MSPDF (Maqasid Shariah-based product development framework) at 87.5%, while sale-based financing was rated at 12.5%. The findings will assist Shariah advisors, Islamic finance product developers, economic analysts, financial engineers and policymakers to incorporate the relevant Shariah objectives in Islamic financial product development.

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Volume: 14 Issue: 3

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Islamic finance; product development; Maqasid Shariah; sale-based product; partnership-based product

Citation

Shahwan, S., Sapian, S. M., Ibrahim, N., Mohammed, M. O., Agha, E., & Kanesan, T. (2023). RANKING THE COMPLIANCE OF ISLAMIC BANKING HOME FINANCING PRODUCTS WITH MAQASID SHARIAH USING AHP. International Journal of the Analytic Hierarchy Process, 14(3). https://doi.org/10.13033/ijahp.v14i3.891

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