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Factors Affecting The Acceptance Of Equity-Based Financing: A Study Among Muslim Users Of Financing

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Abstract

Equity-based Financing (EBF) - Musharakah and Mudharabah are one of the unique contracts introduced by Islamic banks because they have unique features compared to other types of financing such as in terms of types of partners, rights of management, sharing profit-and losses, liability and ownership of assets. This paper aims to examine the factors that drive Malaysian Muslim users of financing to accept EBF. Specifically, this paper examines the relationship between five factors: knowledge, understanding, perception, the level of awareness and religiosity among Malaysian Muslim users of financing regarding their acceptance on EBF. Approximately 258 Malaysian Muslim users of financing around Kuala Lumpur, Selangor and Negeri Sembilan were randomly picked as respondents of this study. Qualitative data were also collected through interviews with the bank personnel and the bank’s customers besides the online-based self- administered questionnaire survey. Employing the SPSS approach, the hypotheses of the study were tested. The findings showed that there are significance relationships between understanding, perception, the level of awareness and religiosity perceived among Malaysian Muslim users of financing and their acceptance of EBF except for knowledge was not significant. Keywords: Equity-based Financing (EBF), Musharakah, Mudharabah, Islamic Banking and Finance

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Date: 9 September 2021 Platform: MSTeams, USIM Nilai, Negeri Sembilan, Malaysia.

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Equity-based Financing (EBF),, Musharakah,, Mudharabah,, Islamic Banking and Finance

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