DIMINISHING PARTNERSHIP (MUSHARAKAH MUTANQISAH) PRODUCT FOR ISLAMIC HOME FINANCING: THE CONCEPT FOR ISLAMIC FINANCIAL INSTITUTIONS IN AFGHANISTAN

Abstract

This study aims to examine the factors influencing the Practitioners’ acceptance on Musharakah Mutanaqisah (MM) Islamic home financing (IHF) products amongst clients of Islamic financial institutions in Afghanistan. Using the MM model as a baseline theory, data are collected from the practitioners (Managers, Head of departments and Shari’ah advisors) of IFIs in Malaysia and Afghanistan, using self-administered open-ended questions. Using the qualitative method, the study finds that; attitude, subjective norm, perceived control and Compliancy of product are instrumental in determining the practitioners’ acceptance of Islamic home financing products. It is also discovered that; gender, academic qualification and monthly income have their own effects on without the consumer acceptance. There are three limitations for future studies of IHF in Afghanistan. First, the current work does not include the experienced users who utilize Islamic home financing products. Second, the contribution of the present study is confined to the analyzed explanatory variables. Third, this study also has geographical constraints in which it will be conducted in Afghanistan. These limitations, however, provide directions for further future research. Essentially, this study is a pioneering effort in applying the MM model to the new context of IHF products and to integrate the stakeholders’ acceptance for lower-income class in Afghanistan. This study introduces the compliancy of product and factors in explaining the practitioners/stakeholders acceptance on MM Islamic home financing products. Most fundamentally, this study proposes a modified intellectual framework that is of utmost importance to predict the demand for IHF products in the future.