Bithaman Ajil Research Articles

RANKING THE COMPLIANCE OF ISLAMIC BANKING HOME FINANCING PRODUCTS WITH MAQASID SHARIAH USING AHP

Compliance of Islamic banking products with Maqasid Shariah has been a never-ending debate. However, most discussions are merely explorative, descriptive and perceptive in nature. This article aims to evaluate two types of home financing products in Malaysia based on the Maqasid Shariah of the product development process in Islamic banks. To provide a more coherent and concrete decision, the Analytic Hierarchy Process (AHP) has been used. Bay’ Bithaman Ajil (sale with deferred payment) and Tawarruq (monetization) have been chosen to represent sale-based financing and Musharakah Mutanaqiṣah (diminishing partnership) represents partnership-based financing. The overall results demonstrated that partnership-based financing complied with the social requirements of MSPDF (Maqasid Shariah-based product development framework) at 87.5%, while sale-based financing was rated at 12.5%. The findings will assist Shariah advisors, Islamic finance product developers, economic analysts, financial engineers and policymakers to incorporate the relevant Shariah objectives in Islamic financial product development.

Do Islamic Banking Financial Instruments Achieve Equitable Income and Wealth Distribution?

The study investigates empirically whether the current practices of Sharīʿah-based financing contracts namely, Murabahah, Musharakah, Mudarabah, Istisna, Bai Bithaman Ajil, Ijarah and other contracts in the Malaysian Islamic banking industry achieved equitable income and wealth distribution. To do so, the study applied the bounds test and ARDL model to investigate the relationship between Sharīʿah-based financing contracts and Malaysian GINI coefficient index over the period from 1Q 2014 to 1Q 2019. In analyzing the long- and short-run implications, it was found that the practice of such Sharīʿah-based financing contracts in the Islamic banking industry achieved equitable income and wealth distribution in Malaysia using Murabahah, Mudarabah, Istisna, Bai Bithaman Ajil, and other (i.e., forward Ijarah) financing contracts. On the other hand, the findings indicated that Musharakah and Ijarah-based financing contract practices did not achieve equitable income and wealth distribution in Malaysia. This may be because the current practices of both contracts which seem to be handled as debts instruments and designed to the benefit of the banking sector only. To improve the Islamic banks’ financing practices in Malaysia, the outcomes of the study suggest that bank operators should strengthen the weight of Sharīʿah-based profit and loss sharing financing contracts with small and mid-size enterprises (SMEs) instead of corporations. In other words, Islamic banks are able to achieve fair income and wealth distribution and uphold the concept of justice for all by gradually increasing Musharakah-based financing for SMEs that can potentially grow and create economic value. Further, to solve the problem of Ijarah contract practices, Islamic banks must take steps to enhance the requirements of Ijarah contracts, specifically ownership transformation, maintenance responsibility, default penalty, and the issue of legal treatment as well as bear the costs, risks and rewards related to the leasing asset instead of borne by the clint. The empirical findings of the study will provide valuable input for banks policymakers, particularly central banks, and Islamic bank management to evaluate the current practice of Islamic finance and proactively correct shortcomings to achieve equitable wealth distribution. This study is a pioneering investigation that empirically evaluates whether the current practices of Islamic banking financial instruments achieve the aims of the equitable financial system, and ensure that Islamic banks, as intermediaries, address the issue of inequality and attain equitable wealth distribution worldwide.

Commodity Murabahah Home Financing in Malaysia in the Case of Abandoned Housing Projects: A Shariah Analysis on Its Operation


 
 
 Commodity murabahah has received extensive exposure since the Islamic financial industry shifted from bay’ bithaman ajil for its banking and financial products. The muamalat based contract which is innovated from the classical tawarruq with certain modifications has proliferated in many of the retail products in Malaysia including home financing. This paper analyses the financing facility offered to Malaysian homebuyers to investigate the extent of safeguards present in the facility when there are project abandonments. The operation of commodity murabahah as practiced in Malaysia for houses under construction are discussed and analysed with respect to their operations to know whether they conform both in form and substance. The analysis is done via library research while semi-structured interviews on operation of the facilities are done with experts in the field. The study finds that the commodity murabahah facility catered lacks the necessary safeguards for customers of Islamic banks. This can further aggravate the situation of homebuyers who have no proper recourse when their under constructed houses are left abandoned by developers. The paper calls for a more Shariah based oriented facility for houses under construction which is close to its muamalat nature in order for the rights and obligations of parties involved in home financing be inherent. 
 
 

Bai Bithaman Ajil (BBA) and Musharakah Mutanaqisah (MM): Comparative Analysis

A comparative analysis between Bai Bithaman Ajil (BBA) and Musharakah Mutanaqisah (MM) for the home buyers preference in choosing Islamic home financing. There are three main variables that are being used to identify most influenced factor which are Shariah compliant, pricing, and equality. All variables have a significant value towards preference on Islamic home financing, it meet the purpose of the Shariah (Maqasid al Shariah). MM home financing mode is more preferable based on Mean value as Shariah compliant and Equality shows a higher value compared to BBA. These results may help Islamic banking in Malaysia in order to expand the market to compete with conventional bank.

Trend Analysis of Islamic Financing: A Case of Islamic Banks in Malaysia

The objective of this study is to identify and analyze the trend of different modes of financing offered by standalone Islamic banks and Islamic subsidiaries of conventional banks of Malaysia. At present, there are 5 standalone Islamic banks and 11 Islamic subsidiaries of conventional banks operating in Malaysia. All banks are selected for analysis. Annual audited financial statements of standalone Islamic banks and Islamic subsidiaries of conventional banks have been utilized for obtaining data. The study period is from year 2010 to 2016. Vertical and horizontal analysis techniques are applied for analyzing the data. The results indicate that Islamic subsidiaries of conventional banks are more efficient in providing different modes of financing out of 6 popular modes; Islamic subsidiaries of conventional banks are capturing 4 modes which are in double figure as percentage of the total portfolio; while in standalone Islamic banks, 3 modes are in double figure. In sales base products standalone Islamic banks are more efficient, while Islamic subsidiaries of conventional banks are more efficient in providing rental base products. In products like mur¯abah. ah and ij¯arah, Islamic subsidiaries of conventional banks are more efficient, while standalone Islamic banks are more efficiently managing the controversial products such as Bai Bithaman Ajil and tawarruq. While three products are showing upward trends, the other three are showing downward trend. The study concluded that despite being exalted in Islamic banking and finance, still the Islamic financing base of Malaysian banks comprises the debt creating modes.

KONSEP PEMBIAYAAN BERBASIS AKAD JUAL BELI PADA BAITUL MAAL WAT TAMWIL PAHLAWAN TULUNGAGUNG

Financing using a sale and purchase contract is one of the most dominant financing in Islamic financial institutions. One of the Islamic microfinance institutions namely baitul maal wat tamil has two types of sale and purchase agreements on its financing products, namely the contract of sale and purchase of murabahah and bai bithaman ajil. This study discusses the concept of financing based on the sale and purchase contract, namely murabahah and bai bithaman ajil on baitul maal wat tamwil (BMT) Pahlawan Tulungagung. The things that need to be reviewed in the practice of the ajabahah and bai bithaman contract are adjusted to the points in the DSN-MUI Fatwa on murabahah financing. This study uses qualitative methods with descriptive case study strategies. Data collection through interviews with four respondents consisting of financing managers, managers and two members of the financing of buying and selling financing and documentation. Interpretation and conclusions are made by linking between data obtained in interviews and documentation. The results of the study show that the concept of financing murabahah and bai bithaman ajil in BMT Pahlawan is not fully in accordance with the DSN-MUI Fatwa regarding the purchase of goods. However, this is still tolerated because of the limitations of BMT to purchase goods which then applies the Al-hajatu tunazzilu rule, manzilata al-dharurah, which is a requirement or need to occupy an emergency position so that the purchasing system is allowed.Keywords: Financing, Murabaha, Bai bithaman ajil, DSN-MUI, BMT Pahlawans

House financing: contracts used by Islamic banks for finished properties in Malaysia

PurposeThe purpose of this paper is to find out the existing practices of the Islamic banks in providing financing to the customers who have a requirement to purchase a finished property and to examine the existing products used by the Islamic banks in this regard by providing an insight into the modus operandi of these products. In doing this, attempt is made to find out the most famous product offered by the Islamic banks in this regard and to find out whether in reality, Malaysian Islamic banking industry has moved away from Bai Bithaman Ajil (BBA) or not.Design/methodology/approachThis is a qualitative research, largely library-based, and it will consist of secondary sources such as books, journals, articles and other sources related to the Islamic house financing in Malaysia for finished properties. Recent information of the practises of the banks in this regard is obtained from the official websites of the banks.FindingsIt is found from this study that majority of Islamic Banks in Malaysia prefer to use the Commodity Murabahah facility for finished property. This finding contradicts with the observations made by some scholars who state that in Malaysia, BBA was initially used, and nowadays, the use of Musharakah Mutanaqisah is more common. The reason why Commodity Murbahah has gained popularity is because of the fact that via the Bursa Suq Al Sila platform, it is easy, swift, reliable, profitable, cheaper, convenient and has zero risk to do this type of transaction at the comfort of the office. It is recommended in this paper to use Musharakah Mutanaqisah, as this contract is an innovative contract that is classified as an equity contract under shariah where risk is shared between the parties. There is need to conduct further research to implement Musharakah Mutanaqisah in Malaysia, specifically to reduce the risk that Islamic Banks will bear by practicing this contract.Originality/valueThe findings of this paper might create confusion among readers, as some may perceive that the finding of the paper is not new as BBA has been dominating Islamic house financing industry from the inception of Islamic banking in the country, and BBA and Murabahah are similar in nature, and as such, commodity Murabahah is also a Murabahah transaction. The reality that needs to be understood is that the way BBA was or is practised in Malaysia in relation to Islamic house financing is that in the name of BBA, the transaction actually followed the Bai’ ‘inah contract, which is a controversial contract among the shariah scholars. Likewise, commodity Murabahah is also a different contract than Murabahah, as it actually refers to tawarruq. As such, this research finding is important to the Islamic banking industry to understand that Malaysia has moved away from the Bai’ ‘inah contract practised in the name of BBA in Islamic house financing, and there are new products introduced by the Islamic banks in Malaysia to replace this practice which were criticised by Shariah scholars.

A comparative analysis of financial affordability in Islamic home financing instrumentsin Malaysia

Purpose This study aims to compare and contrast the financial affordability of Islamic home financing instruments such as bay’ bithaman ajil and musharakah mutanaqisah (MM) offered by various home financing institutions in Malaysia. Design/methodology/approach Mathematical simulations were carried out in examining the financial affordability (or lack thereof) of various Islamic home financing by both Islamic commercial banks (ICB) and financial cooperatives (FC). Findings This study has shown that MM by FC is a workable, more financially affordable option to potential homeowners. Unlike ICB, MM by FC uses rental rates as a benchmarking tool because of its inherent nature of flexibility. Research limitations/implications MM by FC has the potential to reduce the cost of home acquisition (purchase affordability) and the amount of monthly installments (repayment affordability) of homeowners in Malaysia. Originality/value This study shows the financial implication of unaffordable Islamic home financing instruments may have on the Malaysian households, which were derived from using official data from various government agencies.

Islamic Contracts for Home Financing: A Comparative Analysis

Home financing is widely needed by many people across different countries. Through the years, Islamic banks have developed several models for home financing to address the growing demand from customers. Two products that Islamic banks use extensively are Murabahah and Bay Bithaman Ajil (BBA) which in practice have similar characteristics to their conventional counterparts, which leads to criticism from Islamic scholars. Alternative Islamic home financing schemes that have been introduced to the market in recent years include Musharakah Mutanaqisah (MM), Ijarah Muntahiya Bit Tamlik (IMBT) and Istisna. These three financial products have different features that could overcome the weaknesses of Murabahah and Bay Bithaman Ajil. However, these three financial contracts are not without limitations. This paper provides a theoretical overview of these contracts. Further studies should discuss more practical issues that could promote the use of these contracts.

Shari’ah Perspective Ratio of Islamic Financing: Base Profit Rate vs Rule 78

In Malaysia, Islamic financing contract has various of concepts for example Bai Bithaman Ajil (BBA), AlIjarah Thumma Al-Bai (AITAB) and Musharakah. One of the model is used in calculating financing Islamic concept is called Rule 78. This model is widely used by Islamic finance/banking in Malaysia. However, there are lack of Shari'ah in this formulation based on parameter and also foundation of its formulation. Hence, an alternative model is more Shari'ah perspective is build, namely base pro t rate (BPR). Therefore, the intention of this paper is to investigate the existing model and alternative model used by Islamic finance/banking that is Rule 78 and BPR, respectively based on Shari'ah perspective.

A Proposal of AMM (Adapted Mudarabah Model) for Shariah Compliant Home Financing in Malaysia

This study aims to propose a Shariah compliant mode of house financing named as “Adapted Mudarabah Model” or abbreviated as AMM. The proposal is made after discussing the most two common schemes for Islamic home financing i.e. BBA (Bayʿ Bithaman Ajil) dan MM (Musharakah Mutanaqisah) and their Shariah related issues. Thus, it is exploratory and conceptual in nature. This Shariah compliant financing model is proposed due to the shortfalls in the BBA and MM models where there are some unresolved and controversial Shariah and legal issues. This study uses the concept of mudarabah in this model and suggests that by implementing this model, all of the issues discussed in BBA and MM can be mitigated as the model does not require the Islamic banks to fulfill any of the conditions and obligations of counter-values. The proposal discussed in this article could contribute to the diversification of Shariah contracts for Islamic financing products. It is one of the celebrated ways in developing Islamic finance practices. The discussions of this paper focus on the Shariah aspects of the proposed model especially on mudarabah and qard contracts. The technical applications presented stand as illustrations and require further investigations and examinations for further application.

The Structure in Existing Shariah Principle of Islamic Home Financing: A Review

Islamic finance has grown tremendously since it first emerged in 1970’s. Malaysia's Islamic finance industry has been in existence for over 40 years. This research aims for knowing the structure in top three most applied in Islamic home financing which are Bai Bithaman Ajil, Musyarakah Mutanaqisah and Tawarruq. The structure for each syariah principles is different due to its dealing party. From the structure, borrower gets a clearer view of party that participates in buying a house.

ISLAMIC HOME FINANCING BASE ON DEBT: A REVIEW OF PRACTICES OF ISLAMIC BANK IN MALAYSIA

Nowadays the dual banking system in Malaysia has enable banks to offer two forms of home financing method, the Islamic home financing and the convensional home loan. As we know a house is a everyone needs. They will get by all means by purchase it, renting or build the house themselves. Islamic home financing product is one of the sources that generate profits for the local and foreign Islamic bank in Malaysia. Thus, very few people can afford to purchase a house on a cash basis. As muslim consumers, it is important for them to choose wisely on their financing. This study attempts to analyse the practice of Islamic home financing product base on debt in Malaysia since 2000 till 2016. The study is motivated by few shortcomings of current Islamic home product as well as an increasing the number of shariah instrument contracts among Islamic banking in Malaysia. Islamic home financing in Malaysia can divided into two types, which is debt and equity. Bai bithaman ajil (bba) is the most marketable mode of home financing in Malaysia since 1983 but nowadays, many Islamic banks in Malaysia was accepted musyarakah mutanaqisah (mm) and tawarruq as an alternative to bai bithaman ajil. This study uses a qualitative approach. The paper would survey the practice on Islamic home financing in Malaysia base on debt since 2000 until 2016.

PERCEIVED FAIRNESS IN ISLAMIC HOME FINANCING: COMPARISON BETWEEN AL-BAY’BITHAMANAJIL AND MUSHARAKAH MUTANAQISAH PARTNERSHIP CONTRACTS

While many see housing sector as a commodity, there are still many people in Malaysia who fail to own homes and many are forced to rent or stay away from urban areas. This paper aims to provide information and disclosure of available loan opportunities for house purchases in Malaysia. Apart from the importance among buyers, it is also seen as important from the perspective of property valuers and professionals involved in housing industry. This study compares the perceive fairness between three types of home financing that are available in Malaysia, namely conventional home loan, al-bay’ bithaman ajil, and musharakah mutanaqisah partnership (MMP) contracts among the customers in Malaysia. The study conducts a survey among 100 respondents to examine the relationship between customer intentions to use Islamic home financing based of MMP. The study concludes that the MMP has several advantages and cheaper over the BBA for the customer. Apart from being unanimity Shari’ah-compliant, it can be made to keep away from interest completely by means of practicing rental or house price index at the same time as reducing the cost of homes and the duration of financing. This paper concludes by suggesting recommendations for the appropriate actions to address the issues and challenges facing the MMP home finance products and deregulate BBA in Malaysia.

PERCEIVED FAIRNESS IN ISLAMIC HOME FINANCING: COMPARISON BETWEEN AL-BAY’BITHAMANAJIL AND MUSHARAKAH MUTANAQISAH PARTNERSHIP CONTRACTS

While many see housing sector as a commodity, there are still many people in Malaysia who fail to own homes and many are forced to rent or stay away from urban areas. This paper aims to provide information and disclosure of available loan opportunities for house purchases in Malaysia. Apart from the importance among buyers, it is also seen as important from the perspective of property valuers and professionals involved in housing industry. This study compares the perceive fairness between three types of home financing that are available in Malaysia, namely conventional home loan, al-bay’ bithaman ajil, and musharakah mutanaqisah partnership (MMP) contracts among the customers in Malaysia. The study conducts a survey among 100 respondents to examine the relationship between customer intentions to use Islamic home financing based of MMP. The study concludes that the MMP has several advantages and cheaper over the BBA for the customer. Apart from being unanimity Shari’ah-compliant, it can be made to keep away from interest completely by means of practicing rental or house price index at the same time as reducing the cost of homes and the duration of financing. This paper concludes by suggesting recommendations for the appropriate actions to address the issues and challenges facing the MMP home finance products and deregulate BBA in Malaysia.

INTRODUCTION TO SPECIAL ISSUE 4 : 2017

This issue of Planning Malaysia Journal includes a mixture of articles addressing various issues in contemporary urban planning. Article 1 raises the question of whether green initiatives in educational institutions, especially universities, were successful in producing green graduates. A survey among green and non-green universities students showed that there is no significant difference in the level of perception, attitude and responsible environmental behaviour between green and non-green universities graduates. Thus, it suggests that students’ involvement in universities’ green initiatives should be increased.Article 2 discusses the impacts of street urban design on the perceived safety by women respondents. As women’s role in the cities becoming more pronounced, the authors suggest that streets and urban design should consider the safety of women so that street can become a safe and highly utilised public space. Article 3 looks at the factors affecting house prices in Malaysia in order to determine the alternative benchmark for Islamic home financing scheme. It shows that house price index are influenced by economic growth, demand for housing loan and construction materials. Article 4, in the meantime, compares the Islamic home financing schemes on offer in Malaysia nowadays, and suggest that there is a need for banks to move on from the Al-Bay Bithaman Ajil to Musharakah Mutanaqisah Partnership housing financing scheme.Article 5 looks how innovative management of natural resources leads to increased participation of the local community and improved revenue for rural businesses. These, in turn, motivates local stakeholders to continue preserving the resources. Article 6 examines the practices regarding food waste management in hotels in Langkawi. It found that there was a lack of emphasis from the hotels on their policy related to wastage of food and unsustainable food consumption pattern by their guests. This reflects on the lack of practices towards sustainable food waste management by the hotel sector.Article 7 identifies changes and threats to Malay landscape preservation in traditional Malays houses in Melaka and Kelantan. It concludes that threats to such preservation include inappropriate use of garden space, problems regarding house ownership, inadequate fund for maintenance, and current development trend that leads to traditional Malay garden setting being replaced by modern setting.Article 8 discusses the use of agroforestry approach to improve sustainability of oil palm smallholdings. Rapid development and expansion of natural forest into oil palm land has decreased the agricultural sustainability of Malaysian oil palm production. However, the article shows that sustainability of oil palm smallholdings can be improved through agroforestry, which at the same time was found to also improve income of the smallholders.

INTRODUCTION TO SPECIAL ISSUE 4 : PLANNING MALAYSIA JOURNAL

This issue of Planning Malaysia Journal includes a mixture of articles addressing various issues in contemporary urban planning. Article 1 raises the question of whether green initiatives in educational institutions, especially universities, were successful in producing green graduates. A survey among green and non-green universities students showed that there is no significant difference in the level of perception, attitude and responsible environmental behaviour between green and non-green universities graduates. Thus, it suggests that students’ involvement in universities’ green initiatives should be increased.Article 2 discusses the impacts of street urban design on the perceived safety by women respondents. As women’s role in the cities becoming more pronounced, the authors suggest that streets and urban design should consider the safety of women so that street can become a safe and highly utilised public space. Article 3 looks at the factors affecting house prices in Malaysia in order to determine the alternative benchmark for Islamic home financing scheme. It shows that house price index are influenced by economic growth, demand for housing loan and construction materials. Article 4, in the meantime, compares the Islamic home financing schemes on offer in Malaysia nowadays, and suggest that there is a need for banks to move on from the Al-Bay Bithaman Ajil to Musharakah Mutanaqisah Partnership housing financing scheme.Article 5 looks how innovative management of natural resources leads to increased participation of the local community and improved revenue for rural businesses. These, in turn, motivates local stakeholders to continue preserving the resources. Article 6 examines the practices regarding food waste management in hotels in Langkawi. It found that there was a lack of emphasis from the hotels on their policy related to wastage of food and unsustainable food consumption pattern by their guests. This reflects on the lack of practices towards sustainable food waste management by the hotel sector.Article 7 identifies changes and threats to Malay landscape preservation in traditional Malays houses in Melaka and Kelantan. It concludes that threats to such preservation include inappropriate use of garden space, problems regarding house ownership, inadequate fund for maintenance, and current development trend that leads to traditional Malay garden setting being replaced by modern setting.Article 8 discusses the use of agroforestry approach to improve sustainability of oil palm smallholdings. Rapid development and expansion of natural forest into oil palm land has decreased the agricultural sustainability of Malaysian oil palm production. However, the article shows that sustainability of oil palm smallholdings can be improved through agroforestry, which at the same time was found to also improve income of the smallholders.

Does Musharakah Mutanaqisah converge with Bai Bithamin Ajil and conventional loans?

PurposeThis study aims to examine the disputable Shari’ah and the technical issues underlying the implementation of the Musharakah Mutanaqisah partnership (MMP) model in home financing by Islamic banks in Malaysia. It assesses whether this much-lauded facility is in line with Shari’ah rules and whether it diverges from or converges to the Bay’ Bithaman Ajil (BBA) and conventional loan models.Design/methodology/approachThis study uses a qualitative methodology based on in-depth interviews to achieve these objectives.FindingsWith regard to the issue of convergence, it is obvious from the interviewees’ perceptions that the MMP model is converging with the BBA and conventional housing loans.Originality/valueMany factors were mentioned as the reasons for this convergence, with the most important being that Islamic banks are not operating in a fully fledged Islamic financial system, reducing the risk weightage and regulatory restrictions. As for Shari’ah compliance, controversy may result from the enhanced features that structure this facility. Though these enhanced features are Shari’ah compliant, it transforms the MMP model into a debt rather than a partnership contract.

BAI’ BITHAMAN AJIL, ALTERNATIF PEMBIAYAAN PERUMAHAN PADA PERBANKAN SYARIAH

During this recent two decades, national economy sharia continiue growth.Though it just still smaller compare to the existing of conventional finance, itconscioused the growth of sharia finance currently has a significant enhancement. Thepositive and stable economy performance has given good opportunities to thedevelopment of sharia economy in Indonesia. The existence of syariah economy inIndonesia, who has a muslim mayority, is a new point of national economy history.Sharia banking is one of the tools for developing national economy sharia. Manyproducts offered by national sharia banking, which includes basic principles ofimplementation with profit sharing. One of them is Bai’ Bithaman Ajil, which is the partof trading (Baiah). Bai’ Bithaman Ajil product is expected as an alternative for society tochoose sharia banking as a mediator in transaction, specially to fulfill production needsas well as consumption needs, whose transactions are done on a long-term credit.

BAI’ BITHAMAN AJIL, ALTERNATIF PEMBIAYAAN PERUMAHAN PADA PERBANKAN SYARIAH

During this recent two decades, national economy sharia continiue growth.Though it just still smaller compare to the existing of conventional finance, itconscioused the growth of sharia finance currently has a significant enhancement. Thepositive and stable economy performance has given good opportunities to thedevelopment of sharia economy in Indonesia. The existence of syariah economy inIndonesia, who has a muslim mayority, is a new point of national economy history.Sharia banking is one of the tools for developing national economy sharia. Manyproducts offered by national sharia banking, which includes basic principles ofimplementation with profit sharing. One of them is Bai’ Bithaman Ajil, which is the partof trading (Baiah). Bai’ Bithaman Ajil product is expected as an alternative for society tochoose sharia banking as a mediator in transaction, specially to fulfill production needsas well as consumption needs, whose transactions are done on a long-term credit.