An Islamic debt and wealth management framework in the context of Malaysia


Total Views: 689

Authors

  • Hossain Biplob Faculty of Business & Economics, University of Global Village, 874/322, C&B Road, Barishal, Bangladesh
  • Md Faruk Abdullah Faculty of Business and Management, University of Sultan Zainal Abidin (Gong Badak Campus), 21300 Kuala Nerus, Terengganu, Malaysia
  • Gazi Md. Shakhawat Hossain Faculty of Business & Economics, University of Global Village, 874/322, C&B Road, Barishal, Bangladesh and School of Management, Huazhong University of Science and Technology, Luoyu Road 1037, Wuhan, China

DOI:

https://doi.org/10.33102/jmifr.v19i2.460

Keywords:

Debt, wealth management, financial behaviors, Malaysians

Abstract

The study aims to develop an Islamic debt and wealth management framework based on Shariah to improve Malaysians' financial behaviour. This is a qualitative study where semi-structured interviews were conducted to collect the primary data. The target respondents were local Shariah scholars and the Credit Counselling and Debt Management Agency (AKPK). A purposive sampling technique was used to select the samples from the population, including six Shariah scholars and six AKPK officers. The collected data were analysed thematically to come up with the main findings of the study. The study reveals several Islamic guidelines to manage personal debt and wealth. The findings outline that Islam discourages debt in personal life. Moreover, it allows debt restructuring to reduce the default rate in order to prevent insolvency. Besides, Islam encourages the practice of wealth accumulation through saving and investment, wealth protection through Takaful, balanced spending of wealth to form capital, earning a decent income, avoiding debt, securing wealth and ultimately overcoming financial difficulties. This study contributes to guiding Malaysians and other individuals to improve their financial behaviours by following Islamic guidelines of debt and wealth management so that they can avoid personal financial difficulties resulting from inefficient management of debt and wealth.

Downloads

Download data is not yet available.

References

Ab Rahman, S., Tajudin, A., & Tajuddin, A. F. A. (2018). The significant role of Islamic financial literacy among college students in Malaysia. International Journal of Managerial Studies and Research, 6(11). http://dx.doi.org/10.20431/2349-0349.0611005

Abdallah, D. H. R., & Razzak, L. A. (2015). Exploratory research into Islamic financial literacy in Brueni Darussalam. Islamic Financial Literacy, 59-83. DOI:10.13140/RG.2.1.4815.1765

Abdullah, M. A., & Anderson, A. (2015). Islamic financial literacy among bankers in Kuala Lumpur. Journal of Emerging Economies and Islamic Research, 3(2), 79-94. https://doi.org/10.24191/jeeir.v3i2.9061

Ahmed, M. H. (2016). Micro takaful insurance as a tool to guaranteeing financing and protecting micro enterprises. Journal of Business & Financial Affairs, 5(4), 1-11. DOI:10.4172/2167-0234.1000228

Ahmed, H., & Salleh, H. (2016). Inclusive financial planning: A conceptual framework. Journal of Islamic and Middle Eastern Finance and Management, 9(2), 170-189. https://doi.org/10.1108/IMEFM-01-2015-0006

Ali, A., Rahman, M. S. A., & Bakar, A. (2015). Financial satisfaction and the influence of financial literacy in Malaysia. Social Indicators Research, 120(1), 137-156. DOI:10.1007/s11205-014-0583-0

Al -Quran (Translated by Abdul Haleem, M. A. S), Oxford University Press. UK (2008).

Al-Bukhary, M. I. (810-870 A.D). Sahih Al Bukhary (Translated by Khan. Dr. M. M.). Darussalam Publications (3rd Edition, 2013).

Ansari, Y., Albarrak, M. S., Sherfudeen, N., & Aman, A. (2022). A study of financial literacy of investors—A bibliometric analysis. International Journal of Financial Studies, 10(2), 36. https://doi.org/10.3390/ijfs10020036

Antara, P. M., Musa, R., & Hassan, F. (2017). Conceptualisation and operationalisation of Islamic financial literacy scale. Pertanika Journal Social Sciences and Humanities, 25(S), 251-260.

Arsyianti, L. D., & Kassim, S. (2018). Financial prudence through financial education: A conceptual framework for financial inclusion. JKAU: Islamic Economics, 31(1), 151-166. DOI:10.4197/Islec.31-1.10

Asian Institute of Finance. (2015). Finance matters: Understanding Y generation. http://www.raymondmadden.com/publications/GenY.pdf

At Thirmidhi, M. E. S. M (824-892 A.D). Jami at –Thirmidhi (Translated by Khaliyl, A.). Darussalam Publications (2007).

Baele, L., Farooq, M., & Ongena, S. (2014). Of religion and redemption: Evidence from default on Islamic loans. Journal of Banking & Finance, 44, 141-159. https://doi.org/10.1016/j.jbankfin.2014.03.005

Basah, S., & Tahir, P. R. (2019). Towards acceptance of Islamic wealth management. Journal of Islamic, Social, Economics and Development, 4(24), 14-21. http://www.jised.com/PDF/JISED-2019-24-09-06.pdf

Briliana, V., & Mursito, N. (2017). Exploring antecedents and consequences of Indonesian Muslim youths' attitude towards halal cosmetic products: A case study in Jakarta. Asia Pacific Management Review, 22(4), 176-184. DOI:10.1016/j.apmrv.2017.07.012

Biplob, H., & Abdullah, M. (2019). The importance of Islamic financial literacy for Muslims: A general review. Islam & Civilisational Renewal, 10(1), 106-117.

Blaikie, N. (2010). Designing social research. Polity Press.

Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77-101. DOI:10.1191/1478088706qp063oa

Chaudhry, M. S. (2016). Fundamentals of Islamic economic system. Burhan Education and Welfare Trust.

Consumer Resource and Research Centre. (2012). A survey of financial behaviors and financial habits of young workers. https://www.crrc.org.my/crrc/

Creswell, J. W., & Plano Clark, V. L. (2007). Designing and conducting mixed methods research. SAGE.

Dali, N. R. S. M., Yousafzai, S., & Hamid, H. A. (2015). Credit cards preferences of Islamic and conventional credit card. Journal of Islamic Marketing, 6(1), 72-94. https://doi.org/10.1108/JIMA-05-2013-0039

Garman, E. T., & Forgue, R. (2014). Personal finance. Cengage Learning

Glasser, B. G. (1992). Emergence versus forcing: Basics of grounded theory analysis. Sociology Press.

Haneef, M. A., Pramanik, A. H., Mohammed, M. O., Amin, M. F. B., & Muhammad, A. D. (2015). Integration of waqf-Islamic microfinance model for poverty reduction: The case of Bangladesh. International Journal of Islamic and Middle Eastern Finance and Management, 8(2), 246-270. https://doi.org/10.1108/IMEFM-03-2014-0029

Kasri, R. A. (2016). Effectiveness of zakah targeting in alleviating poverty in Indonesia. Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah, 8(2), 169-186. DOI:10.15408/aiq.v8i2.3005

Khan, M. A. (2020). Theory of consumer behavior: An Islamic perspective (MPRA Paper 104208). University Library of Munich. DOI:10.13140/RG.2.2.12941.97760

Kimiyaghalam, F., & Yap, S. P. L. (2017). Level of financial literacy in Malaysia. International Journal of Research, 4(7), 1064-1074.

Lamido, A. A. (2016). Maqasid al-shari’ah as a framework for economic development theorization. International Journal of Islamic Economics and Finance Studies, 2(1), 27-49. DOI:10.12816/0036594

Lusardi, A. (2019). Financial literacy and the need for financial education: Evidence and implications. Swiss Journal of Economics and Statistics, 155(1), 1-8. https://doi.org/10.1186/s41937-019-0027-5

Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5-44. DOI: 10.1257/jel.52.1.5

Lahsasna, A. (2017). Readings in personal financial planning, shariah wealth management and case studies. Islamic Banking & Finance Institute.

Mahadi, N. A., Mazli, S. A., & Muneeza, A. (2019). Islamic financial wealth management: Empowering women in Islamic societies. International Journal of Management and Applied Research, 6(3), 116-129. DOI:10.18646/2056.63.19-008

Malaysia Department of Insolvency. (2017). Personal bankruptcy. https://www.mdi.gov.my/

Md, A. S., & Ahmad, W. M. W. (2020). Financial literacy among Malaysian Muslim undergraduates. Journal of Islamic Accounting and Business Research. 11(8), 1515-1529. https://doi.org/10.1108/JIABR-10-2017-0149

Muhammad, I. (2019). Analysis of zakat system in high-income Islamic countries. The Journal of Muamalat and Islamic Finance Research, 16(2), 1-11. DOI:10.33102/jmifr.v16i2.219

Murugiah. (2016). The level of understanding and strategies to enhance financial literacy among Malaysian. International Journal of Economics and Financial Issues, 6(S3), 130-139.

Muslim, A. W. Q. (821-875). Sahih Muslim (Translated by Siddiqi, A. H). Kitab Bhaban Publications (2000).

Muttaqin, Z. (2019). The nature of excessive behavior (israf) in the Islamic economic framework. Journal of Business Economics Review, 4(1), 49-57. https://doi.org/10.35609/jber.2019.4.1(6)

Nawi, F. A. M., Daud, W. M. N. W., Ghazali, P. L., Yazid, A. S., & Shamsuddin, Z. (2018). Islamic financial literacy: A conceptualisation and proposed measurement. International Journal of Academic Research in Business and Social Sciences, 8(12), 629–641. DOI:10.6007/IJARBSS/v8-i12/5061

Nawaz, T. (2019). Exploring the nexus between human capital, corporate governance and performance: Evidence from Islamic banks. Journal of Business Ethics, 157(2), 567-587. DOI:10.1007/s10551-017-3694-0

Neves, J. A. (2016). Factors influencing impulse buying behaviour amongst Generation Y students [Doctoral dissertation]. North-West University.

Othman, M. A., Rahim, H. A., Sabri, M. F. (2015). Differences in financial information and financial status among Malaysian bankrupts. Proceedings of the Australasian Conference on Business and Social Sciences, 525- 531.

Selvanathan, M., Krisnan, U. D., & Wen, W. C. (2016). Factors effecting towards personal bankruptcy among residents: Case study in Klang Valley, Malaysia. International Journal of Human Resource Studies, 6(3), 98-109. DOI:10.5296/ijhrs.v6i3.10092

Tirmidhi, M., (1988). Sunan al –Thirmidhi. Thqiq; Nasar al –Din al-Bani. Maktabah al- Ma’rifa.

Zainol, Z., Nizam, A. N. H. K., & Ab Rashid, R. (2016). Exploring the concept of debt from the perspective of the objectives of the Shariah. International Journal of Economics and Financial Issues, 6(7), 304-312. https://www.econjournals.com/index.php/ijefi/article/view/3624

Zuliani, R., & Ab Rahman, A. (2018). Micro-takaful in Aceh. In New developments in Islamic economics (pp. 101-116). Emerald Publishing Limited. https://doi.org/10.1108/978-1-78756-283-720181007

Published

2022-12-01
CITATION
DOI: 10.33102/jmifr.v19i2.460
Published: 2022-12-01

How to Cite

Hossain Biplob, Md Faruk Abdullah, & Gazi Md. Shakhawat Hossain. (2022). An Islamic debt and wealth management framework in the context of Malaysia. The Journal of Muamalat and Islamic Finance Research, 19(2), 41-57. https://doi.org/10.33102/jmifr.v19i2.460

Issue

Section

Regular Issues