The Behavior Of Profit Of Musharakah Mutanaqisah Homeownership Partnership By The Case Of Abandoned Housing Project In Malaysia
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Date
2016-09
Authors
Syed Ahmad, Farhana
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Abstract
The practice of housing project in Malaysia is worrisome because housing financing system implement the sell-then-built contract. This is believed to be a major factor that leads to the abandoned housing project. The system let the selling made from the developer to the purchaser before the housing project is complete. The main issue cause from the abandoned housing project is when it involving the Islamic financing system particularly on Bai’ Bithaman Ajil(BBA) facility. From the cases study in Malaysia, most purchasers of houses under construction were disappointed with the Islamic banking system because of the abandoned housing project is suddenly occurred and they have to suffer the losses and facing more difficulties to solve the problem legally. The Islamic bank should not let the debtors to face the losses alone because each of the parties responsible for selling the rights which failed to complete in duration. Furthermore, the Islamic bank is trusted by the society to bring justice and compassion for the people as it provides legitimate and ethical practice following the Shariah. Scholars introduce Musharakah Mutanaqisah Homeownership (MMP) as an alternative home financing facility replacing the BBA. Nevertheless, from the financier’s point of view, there is still a probability of abandoned housing project will occur to the MMP facility. However, there is no specific method to calculate this
particular risk and its impact toward the profit of the bank. The main finding of this research is a critical approach for the MMP facility on the Islamic housing finance to ensure the bank provided a convinced and secure financing system to the society with the application of mathematical approach such as the actuarial mathematics and financial mathematics methods as the precedence subjects, as there is no single research about implementing these particular methods to the MMP facility to suit and balance the practice of Islamic financing and the practice of selling the incomplete houses in Malaysia. The development of the simulation modeling prepared by this research is to investigate the impacts of various variables such as the failure rate to the profit of the bank. This research should be able to portray the reality and give significant information for the financiers to be prepared and manageable their financing system even though the failure of abandoned housing project may occur at any time.
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Most purchasers of houses under construction were disappointed with the Islamic banking system , because of the abandoned housing project.