Abstract
Problem statement: Diminishing partnership or musharakah mutanaqisah contract in home financing is recently introduced by the Islamic banking industry as an alternative of the bay bi’thaman ajil contract which has received many criticism from shariah scholars as mimicking conventional loan. This study aims to examine customers’ attitude upon diminishing partnership home financing and their intention to subscribe into the financing scheme. Approach: This study gauges customers’ perception on the salient features of diminishing partnership home financing from Islamic banks through a survey of 504 respondents comprise officers, managers and academician in Kuala Lumpur. The structural equation modeling was utilized to find out factors that influence customers’ intention for diminishing partnership home financing under the framework of the theory of reasoned action. Results: The main finding indicates that customers perceived the equity sharing features in diminishing partnership home financing mode differ from the conventional loan and other existing Islamic home financing modes. The result from structural equation modeling shows that customers’ intention for diminishing partnership is more influenced by their subjective norms compared to their attitude toward diminishing partnership home financing. Conclusion: The customers have perceived diminishing partnership as more shariah compliant than bay bi’thaman ajil. Afterwards, opinions from people perceived important by customers are giving more influence towards their decision making process.
Highlights
Similar to food, clothing and security, home is a basic need for everyone
The regression model is concept in conventional and Bay Bi’thaman Ajil (BBA) home financing. These results provide useful feedback for banks to differentiate their existing BBA home financing product with the newly introduced Diminishing Partnership (DP) home financing mode
The results from the Structural Equation Model (SEM) are supporting all the hypotheses developed in this study and significant and meaningful due to the significant p- automatically confirmed that attitude and subjective value at 1% alpha and the estimated path coefficients norm have influenced on customers’ selection for DP
Summary
Similar to food, clothing and security, home is a basic need for everyone. It is a place to dwell in comfort with family. If the model is accepted, the researchers can proceed to interpret the path coefficients in the model This is Customers’ attitude towards DP home financing: Table 4 illustrates the descriptive analysis on customers’ attitude for DP home financing based on the six variables namely concept used (question 1), method of computation and pricing (question 2, 3, 4 and 5), because ‘significant’ path coefficients in a poor fit models is not meaningful. The NB is significantly and positively (β = 0.634) related to the SN (H2) and the SN to the INT with β equal to 0.656 (H4) These results are confirming the RQ2 of this study that customers’ attitude and subjective norm are able to explain their intention behavior towards the DP home financing. The R-square value for the endogenous variable of INT is equal to 0.695 which means that almost 70% of its variation can be explained by its predictors i.e. SN and ATT
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
