Financial Institutions In Order Research Articles

Islamic Banking in Africa: A Booming Market with Growing Pains

Islamic banking, also known as ethical banking, is a banking system for those who avoid conventional banking due to religious beliefs. It drives the creation of new financial instruments that meet the needs of a wider range of customers, and it is currently accepted as an essential banking model in the global financial landscape. This paper assesses the opportunities and challenges of Islamic banking in Africa using a systematic literature review by examining 19 articles. The paper argues that Africa is the original home of modern Islamic banking practices, and it can become an essential hub for this banking model in the future. The results demonstrate that the Islamic banking market has potential for those seeking expansion and the establishment of Shari’ah banks, as well as promising avenues for the growth of Islamic banking and finance and aligning with the continent's socio-economic dynamics by providing inclusive financial solutions. The findings also demonstrate the existing opportunities, including the large Muslim population, arguing that popularity can drive Islamic banks on the continent, while limited awareness, misconceptions, and legal restrictions are the main challenges for Islamic banks in Africa, hindering public understanding of how Islamic banks work. The paper recommended that Islamic banks should conduct market research, create innovative products, and apply tailored marketing strategies. The study also suggests that governments should recognize Islamic banks as distinct financial institutions in order to better support them.

Shadow Banking in the United States: Emerging Factors, Operation Modes and the Current Situation of Supervision - Based on the Comparison with Chinese Shadow Banking System and Market

In 2009, Ben Bernanke, chairman of the Federal Reserve, described shadow banking as a financial intermediary that converts savings into investments in addition to regulated deposit-taking institutions. To put it simply, the essence of shadow banking is a financial innovation that breaks through traditional financial institutions in order to maximize profits in the financial market environment. In this paper, we compare the U.S. and Chinese shadow banking system and their market system. From that, we analyze their similarities and differences from the aspects of emerging factors, classification and scale, and operation mode. Based on the above analysis, we then discuss the current situation of supervision of shadow banking in the United States and find that the U.S. shadow banking is negligent in institutional constraints and has practical difficulties in legal supervision. Finally, we put forward some suggestions on the future development and financial structure optimization of shadow banking.

Effects of Globalization on Third World Development: The Nigerian Experience

The study examines globalization and its effects on third world development with emphasis on the Nigerian state. The growing global economy was fastened mostly by information technology, international trade, culture, political, and social activities across the globe. It has no doubt created a global dual phenomenon where third world countries continued to experience economic and political development at the expense of western world. Thus, third world countries are fully incorporated into the global capitalist economy but the accrued benefits are not evenly distributed. Globalization is another form of colonization of third world countries achieved through the use of exploitative instruments like World Trade Organization (WTO), International Monetary Fund (IMF), World Bank, multinational corporations and other international financial institutions in order to capture the world in the name of globalization. These aforementioned instruments in the name of globalization are diversionary and plausible because there is no country in the world that is in the process of development as a result of globalization or that has developed as a product of globalization. The pro-globalizers deceive third world countries, that globalization is a path to development in which all third world countries are supposed to follow in order to become developed. Nigeria, in the current wind of globalization remains a clientele economy in the competitive global market. The study adopts documentary research methods and relied majorly on secondary data and modernisation theory was adopted as the theoretical foundation of the study. The study revealed that underdevelopment in Nigeria resulted from the negative effects of globalization are to explore the political impacts of globalization and imposition of foreign rule in Nigeria, to explore the economic impacts of globalization and unequal terms of trade in Nigeria and to identify the role of Nigeria as giant of Africa in global markets. The study, however suggest economic diversification and exportable capacity of the third world economy in the global market, regulation of international capitalist structure through applicability of market friendly policies devoid of stringent market policies placed on third world countries by the developed countries and Improving bank regulations of the third world countries nations banks are well regulated to their boost economic growth. The study concludes that there is interconnectedness between globalization and development in Nigeria, which in turn increases the rate of unemployment of masses and hinders political and economic development in Nigeria.

THE COVID-19 CONTAINMENT IN INDONESIA AND SOFT LAW: A RISK-TO-OBJECTIVE ANALYSIS

This article illustrates how Basel III, a soft law legal framework guiding how regulators supervise financial institutions in order to prevent and mitigate systemic financial crises, especially the requirement regarding the governance of sovereign debt, is being implemented in Indonesia. The analysis was done by scrutinising the relevant authority’s responses and monetary policy during COVID-19. Also, it examines whether the applicable regulations and other related policies align with the grand objectives of the financial sector. This article provides several important takeaways. First, benefiting from the soft traits of Basel III, the oversight authorities (OJK and BI) have tried to enshrine the government’s resilient and prudent financial state through flexibility. Second, instead of taking expansionary legal measures to stimulate the state’s income and limit the state’s expenses, BI and the government have worked together to contain the damage of the pandemic through a quasi-fiscal program (burden-sharing program, BSP). Third, the legislation of Law No. 3/2023 did not make the BI’s objective less risky. It also suggests that more could have been done to prevent the fiscal deficit, especially by the government, through fiscal consolidation (limiting or decreasing the state’s expenses).

A Study of the Ideas Behind Artificial Intelligence in Financial Technology

Artificial intelligence has the potential to totally revolutionize the financial industry by providing answers that are both knowledgeable and intelligent to problems that people are unable to solve on their own. FinTech systems that are powered by artificial intelligence make use of machine learning algorithms and natural language processing in order to analyze vast volumes of data and produce forecasts or judgments. Artificial intelligence is being used in the financial technology industry to improve the efficiency, personalization, and security of services provided by financial institutions. This is causing a change in the way that these institutions manage their businesses. Significant technical developments that are revolutionizing financial services have been brought about as a result of the incorporation of artificial intelligence and machine learning in the financial sector. Currently, artificial intelligence is being utilized by financial institutions in order to enhance the client experience, automate financial services, and make decisions based on actual facts.

Determining the patterns of using information protection systems at financial institutions in order to improve the level of financial security

This paper reports a study aimed at determining the features of using information protection systems at financial institutions in order to improve the level of financial security. It has been proven that under the conditions of digitization of the business environment, information provision is the basis of financial security at both the macro and micro levels. Information has become a strategic resource that needs protection due to the spread of cybercrime. The level of efficiency of information provision and the level of financial security of Ukraine was determined, and the relationship between them was confirmed. Attention is focused on the need to improve these indicators. It has been proven that an effective information protection system enables economic entities to resist dangers and threats. It was substantiated that the intensification of the processes of digitalization of economic activity had created prerequisites for the growth of risks and threats to the integral, uninterrupted, protected circulation of information resources of financial institutions, which leads to huge financial losses. This requires improvement of existing information protection systems. A topology of information protection systems has been presented. An algorithm for building effective information protection systems of financial institutions was proposed, which includes system vulnerability assessment, system assessment for compliance with security standards, penetration testing, and application assessment. Its application would allow financial market entities to promptly respond to real and potential threats, increase the level of information security, and ensure financial stability. The results of the study could also be used by state and local authorities to devise the principles of financial security management at the macro level under the conditions of the digital economy

Risk management systems in credit and financial sector organizations

This article discusses aspects related to the use of risk management systems in credit and financial organizations. The author has studied the key provisions related to risk control in credit and financial organizations. In addition, the importance of using a system of risk indicators to reduce the likelihood of potential risks and to improve the risk management system in credit and financial organizations is described. In this paper, the main stages characterizing the process of formation and further implementation of the risk indicators system in the risk management process in the complex of organizations involved in the credit and financial sphere are also considered and studied. A special place in this article is given to the consideration of the provisions necessary for the successful functioning of risk management systems in credit and financial organizations. In addition, the author describes and substantiates the principles of building a system of risk indicators applicable in the field of credit and financial relations. This article also examines the provisions related to the regulatory and legal support for the functioning of the risk management system in credit and financial organizations and related to international documents in the field of risk assessment and their management. The author has identified a number of coefficients reflecting the main performance indicators of a credit and financial institution in order to apply the risk management system in more detail and accurately. In the final part of the article, the author draws conclusions about the current situation in which credit and financial organizations are located, in terms of the impact of risks. In this regard, the author substantiates the importance of competent development of a system of risk indicators and improvement of the risk management system of organizations.

Hybrid MADM-based study of key risk factors in house-for-pension reverse mortgage lending in Taiwan's banking industry

The issue of financial problems among the elderly has garnered the attention of multiple generations. In 2018, Taiwan formally attained an ageing society status. In order to address the financial difficulties elderly people face, an annuity system reform was launched by the Taiwanese government. Reverse mortgage lending, which is performed on the basis of house-for-pension, is an alternate method for enhancing their standard of living and sustaining their financial stability. The elderly applicants often mortgage their properties to financial institutions in order to maintain a steady cash flow for the fulfilment of their daily needs and live their remaining years in the mortgaged properties without vacating. Prior studies on house-for-pension in the Taiwanese context primarily concentrated on institutional implementation analysis but limitedly explored the uncertainty risks banks face when implementing the house-for-pension scheme. First, a literature review on the risks associated with house-for-pension reverse mortgage financing and comprehensive interviews with banking industry professionals were conducted. Subsequently, in the Taiwanese banking sector, assessment criteria for important risk factors in house-for-pension reverse mortgage financing were devised. The decision-making trial and evaluation laboratory (DEMATEL) was utilised to assess the interdependence of the assessment criteria. Next, the DEMATEL-based analytic network process (ANP) or DANP were used to calculate the weights of evaluation criteria. By employing modified VlseKriterijumska Optimizacija I Kompromisno Resenje (VIKOR), a gap analysis was undertaken on the assessment criteria and sub-criteria. The study's findings serve as a guideline for the Taiwanese banking industry in formulating, improving, or amending the risk exposure mitigation measures for reverse mortgage lending.

The Role of Baitul Maal (BMN) East Java Pamekasan Pegantenan Branch In Improving Community Welfare

This Baitul Maal has existed since the time of the Prophet Muhammad. However, the most visible role since the time of the companions of the Prophet was during the time of Abu Bakr as Siddiq to the time of Ali Bin Abi Thali. Where is the role and function of the Baitul Maal at the time of the friends not only as a financial institution that manages the economy in a simple way, but instead becomes an institution that takes care of all state financial matters as well as a financial institution that manages all state assets. Then the development of this institution is now the Baitul Maal which is complete as a financial institution in order to be part of activities for the welfare of the people's lives.

Contribution of Project Management Knowledge Areas on the Performance of Affordable Housing Projects; a Case of Kigali City

The research aimed to scrutinize the contribution of project management knowledge areas on the performance of affordable housing projects in Rwanda, case of Kigali City. The specific objective of the study was to examine the contribution of project cost management, to find out the contribution of project risk management, and assess how project quality management contributes on the performance of affordable housing projects. Institutional theory, resource-based view and dynamic concept of formation of business knowledge were used in theoretical review. A sample of 93 respondents among 121 of total population was engaged. For data alysis, SPSS version 23 was used. The findings indicated that cost management, risk management and quality management can influence the performance of affordable housing projects. It was recommended that there should be housing for different categories of people and their status; if it is for single person, small family or large family. The City of Kigali should advocate for the benefit of beneficiaries to get access to finance from different financial institutions in order to facilitate them getting those affordable houses. The cost of housing should be considered but without forgetting their quality. Keywords: Project management knowledge area, performance, affordable housing projects

International economic relations

Methods. Generalization and system analysis made it possible to determine that one of the urgent problems of our time is the provision of stable development of societies with energy resources. Currently, this development is taking place under conditions of uncertainty and under the influence of geo-economics and geopolitics. The processes that form such uncertainty include high growth rates and changes in regional proportions of energy consumption, increased competition for scarce resources, which implies increased contradictions between the main representatives of the sector in the fuel and energy markets, lack of stability and independence of the energy product. To do this, it is necessary to use tools for generating new ideas for the formation of an economic ideology of energy security as a vector for the development of the state in conditions of constructive destabilization. Results. The author of the article determined that the growing importance of the convergent communication basis for the formation of the economic ideology of the energy security of the state, uniting common or regional infrastructures, can act as tools of economic, technological, military, diplomatic, informational or other influence, which can develop into open conflicts. , the growth of political risk forces The development of state systems in the field of energy security management of Ukraine in conditions of constructive destabilization, including also innovative enterprises, scientific organizations, financial institutions in order to increase the competitiveness of the economy. The gradual transformation of society leads to a reduction in auxiliary labor flows, as well as an increase in decarbonization processes in the strategies of leading oil and gas and energy companies, which are influenced by the main factors that change the activity of the fuel and energy complex. Novelty. It has been determined that there is a trend towards finding solutions to existing problems and resolving crises both at the global and regional levels. At the same time, the failure of the existing global and regional architecture, as well as the imperfection of legal instruments and mechanisms, increasingly threaten the energy security of the country. It is revealed that in this regard it is necessary to develop a unified approach to energy security as a component of the national security system. National energy security consists of components that are interconnected and interact with each other, in other words, national energy security is a functional system that reflects the processes of interaction of interests and threats. The economic ideology of the energy security of the state in the conditions of constructive destabilization is proposed. Practical value. It has been established that maintaining a stable pace of economic development in unstable conditions, the implementation of the planned modernization and innovative development of the country largely depends on the quality of the changes that support these processes. The fuel and energy complex of the country, the potential of which is represented mainly by large corporations - natural monopolies, which, together with other similar complexes, are the basis for the revival and further development of the domestic industry and ensuring the economic security of the state.

The Role of the Financial Regulator of Thailand in Ensuring the Information Security of the Financial and Banking Sector

The object of the study is the relations arising during the functioning of the national legal mechanism for ensuring cybersecurity. The subject of the study is presented by regulatory legal acts and sources of "soft law" of Thailand, which establish requirements for information systems of the financial and banking sector. Using the example of the second economy in Southeast Asia - Thailand, the role of the financial regulator of the state – the Bank of Thailand (Bank of Thailand, BOT) in ensuring cybersecurity of the financial and banking sectors is described. The features of the legal status of the Bank of Thailand, determining the coordinating role in the institutional mechanism for ensuring cybersecurity, are highlighted. The key documents of the financial regulator that form the regulatory mechanism for ensuring cybersecurity in Thailand are examined. The powers of the financial regulator of Thailand are distributed among three bodies. The Bank of Thailand controls commercial banks, financial companies, credit institutions, asset management companies, electronic payment services and credit card companies. The Securities and Exchange Commission oversees securities transactions, while the Insurance Commission oversees the activities of insurance companies. Ensuring information security is entrusted to the Bank of Thailand, which is authorized to create a risk management system for financial institutions in order to ensure their stability. To this end, it adopts regulations that establish security standards for three types of information systems: general, serving electronic payments and serving electronic payment cards. Noteworthy is the requirement for information system operators, when concluding a service agreement, to determine the rights of internal and external auditors, as well as an official of the Bank of Thailand to verify transactions and control the service provider. The financial regulator determines the status of service providers of particularly important payment systems, charging them with the obligation to develop security measures for information systems, depending on the types and complexity of their own services.

Financing low-carbon transport transition in the Philippines: Mapping financing sources, gaps and directionality of innovation

Successfully achieving a low-carbon transition in the transport sector requires an understanding of the lending logics of the financial institutions in order to identify the financing directionality and gaps. However, in the transportation literature, there is a lack of attention on the relationship between financing sources and the direction of innovation. The present study seeks to address this by mapping the flow of finance from financial institutions to transport projects. Our dataset consists of 9 transport projects included in the Philippines’ Nationally Determined Contribution (NDC). We consider different types of projects (rail development, bus rapid transit implementation, jeepney modernization) and various financial actors (multi-lateral banks, private and government banks). Through an analysis of loan portfolio composition and interview data, we uncover the underlying logics of each financial institution in lending to transport projects. Our findings suggest that the lending logics of many financial institutions is primarily driven by portfolio and borrower credit-worthiness considerations, and less by motivations concerning sustainability transition. As a result, with respect to the average, some transport projects are over-financed (e.g. rail development), while others – which have a high potential to accelerate decarbonization – are under-financed (e.g. jeepney modernization). All these have profound implications for the directionality of low-carbon transition. Deeper engagement of transition research with finance is a nascent field, and the current research contributes to the literature not only by presenting a comprehensive mapping of several financing sources and projects, but also of proposing three credit enhancement mechanisms to mobilize capital for under-financed projects.

UANG DAN MONETER ISLAM DALAM SISTEM MONETER GANDA DI INDONESIA

The Islamic monetary system in the dual monetary system has not been able to avoid the use of conventional banking instruments, namely the fiat money and fractional reserve banking (FRB) system and only the profit-sharing system that can be applied instead of the interest system. The purpose of this study is to analyze money and the role of the Islamic monetary system in the dual monetary system. This study applies qualitative descriptive analysis by literature study. The results show that Islamic monetary with flow concept and economic value of time can play a role in the dual monetary system in Indonesia by encouraging investment, production and distribution, as well as the application of sharia contracts and the imposition of zakat. The research is expected to be useful for the monetary authorities to activate Islamic financial institutions in order to increase their role in the monetary system in Indonesia.

THE EFFECT OF SAVING ACCOUNT OWNERSHIP AND ACCESS TO FINANCIAL INSTITUTIONS ON HOUSEHOLD LOANS IN INDONESIA

This study investigates whether saving account ownership and access to financial institutions influence household credit in Indonesia. Using a multinomial logit regression model and a sample of 294,426 households from the 2018 national socioeconomic survey and the village potential data, we find that account ownership is essential in encouraging formal credit and reducing informal credit. Access to commercial banks, rural banks, and cooperatives can then improve formal credit without significantly reducing informal credit. Hence, the government needs to encourage bank account ownership and facilitate access to financial institutions in order to promote formal credit and reduce informal credit.

SO MUCH OWED BY SO MANY TO SO FEW: HOW THE FINANCIAL ADVISORY AND INTERMEDIARIES ACT 37 OF 2002 ADDRESSES “CONFLICT OF INTEREST”

Winston Churchill delivered his famous speech entitled “The Few” after the Battle of Britain of 1940. This historical conflict saw 2353 young men from Great Britain and 574 from overseas, pilots and other aircrew fly at least one authorized operational sortie with an eligible unit of the Royal Air Force or Fleet Air Arm during the period 10 July to 31 October 1940. Although conflict on the scale of a world war cannot be equated to conflicts of interest between financial-services providers (FSPs), representatives and clients, the potential damage that can be caused by intermediaries and representatives who act in their own interest can be devastating to that particular client. In addition, it also has wider implications for the financial-services industry. It is consequently up to the FinancialServices Board (FSB) to ensure that conflict of interest between intermediaries and representatives and clients are managed in anacceptable way. As a matter of background: The FSB was established by the Financial Services Board Act (97 of 1990) and has as its main objective the supervision of financial institutions in order to achieve maximum consumer protection. As such, the FSB acts as statutory registrar of a variety of financial institutions. Hattingh and Millard explain that the FSB is currently in control of the Collective Investment Schemes Control Act, the Financial Services Board Act, Financial Institutions (Protection of Funds) Act , Financial Supervision of the Road Accident Fund Act, Friendly Societies Act, Inspection of Financial Institutions Act, Long-term Insurance Act, Pension Funds Act, Short-term Insurance Act, Supervision of the Financial Institutions Rationalisation Act, the Securities Services Act, and the Financial Advisory and Intermediaries Act. The FSB drafted the FAIS Act with the aim of creating a regulatory structure which regulates the way in which intermediary and advisory services in respect of financial products are rendered. Conflict of interests is but one of the issues that arise between intermediaries, advisors, financial-services providers and clients and the purpose of this note is to analyse a number of key issues introduced by Board Notice 58 of 19 April 2010. This note sets out to explain what the position was before the introduction of the new rules on the management of conflict of interest. It then proceeds to discuss the new definitions that now form part of the legislation. In addition, it discusses the detailed provisions pertaining to conflict of interest and explains what a conflict-of-interest management policy entails. Finally, the note evaluates the new regulations and asks whether they have thepotential to eliminate unfair dealings by advisors and intermediaries and thereby enhancing the professionalism of those who work in the financial-services industry.

FinTech – A Step Ahead or a Force of Creative Destruction in Finance

The purpose of the article/hypothesis. This article aims to introduce the concept of creative destruction in relation to transformative solutions in finance based on the example of FinTech and innovative technologies with special emphasis on blockchain and cloud computing. As a means to reach its objective this paper analyzes in depth the concept of creative destruction originated by Schumpeter in 1940s and translates it to modern business financial environment to present the reader with double-sided effects of introduced changes, their unique and unprecedented character both from the perspective of FinTech and traditional financials intermediares.
 Methodology. In order to research the effects of innovations on the financial markets the critical study of the foreign literature will be conducted.
 Results of the research. The conducted considerations displayed a parallel between innovations introduced by FinTech and actions undertaken by traditional financial institutions in order to remain strong players on the financial market. Even though solutions provided by start-ups may debilitate gained trust, which is one of the fundamental cores of finance, and raise questions related to breach of established regulations, they support the market with increased efficiency and variability of products and services. However, it can be easily perceived that advantages of introduced solutions outweigh possible dangers, and financial intermediaries, especially banks, decide to operate on the basis of the enagament model that supposes a synergy with start-up to blend favourable aspects of both of them including banks’ well-established repute and trust along with FinTech’s innovative potential.

Modelling the Language of Cyber Scammers: A Forensic Linguistics Analysis of Malaysian Illegal Investment Scheme

Over the last few years, there are growing concerns over the astronomical increase of reported cases of illegal internet investment schemes in Malaysia. Although the Central Bank of Malaysia (CBM) regulates and supervises financial institutions in order to combat illegal investment scheme through Financial Services Act 2013 (FSA 2013) and Islamic Financial Services Act 2013 (IFSA 2013), they do not protect the consumers should they choose to deal with the illegal financial service providers. The large financial losses have a negative impact fiscally on investors’ socioeconomic. Hence, this study is proposed to analyse Malaysian illegal internet investment scammers’ language properties to provide cyber defense for the public. Using Zhang and Wildermuth’s (2009) content analysis process, this study intends to examine the linguistic strategies used by scammers in their websites to deceive their targets. This study will focus on several websites identified by CBM as the primary data source. Semi-structured interviews will be conducted with personnel from relevant government agencies. For triangulation purposes, individuals who have experienced investing and willing to share their experiences and data will be interviewed. All data will be coded and categorised, and emergent themes will be presented to answer research questions. With great hope, this study’s results will help provide comprehensive public education about these scams’ linguistics strategies as a strong defense against them. The results may also help the authorities develop better crime prevention methods and contribute to the criminal justice system in presenting more significant linguistic evidence in the court of law.

The effect of Islamic intellectual capital, corporate governance, and corporate social responsibility disclosure on maqashid sharia performance, with reputation as a moderating variable

This study aims to show that there is a positive relationship between Islamic intellectual capital, corporate governance, disclosure of corporate social responsibility on the performance of maqashid sharia, and this study wants to show that reputation strengthens this positive relationship. This study's sample consists of 33 annual reports from 11 Islamic banking companies in Indonesia for the 2016-2018 period, chosen using the purposive sampling method. This study was tested by using the Moderated Regression Analysis test. The results of this study indicate that Islamic intellectual capital, corporate governance, disclosure of corporate social responsibility have a negative effect on the performance of Islamic maqashid. The role of reputation can not increase the relationship of Islamic intellectual capital to the performance of maqashid sharia. Reputation also can not increase the relationship of disclosure of corporate social responsibility to the performance of maqashid sharia, but reputation has been proven to improve the relationship of corporate governance to the performance of maqashid sharia. The results of this study are input for the Financial Services Authority (OJK) and Bank Indonesia (BI) as regulators to monitor the performance of Islamic financial institutions in order to protect the public interest as a whole.

Islamic House Financing through Diminishing Musharakah: A Cheaper Solution

Shelter is one of the basic necessity along with food and clothing which any human endeavors for. The assiduous efforts to acquire basic necessities is made part of human nature (Shahzad & Farooq, 2014). Quran and Hadith emphasizes on the importance of housing; “And Allah has made for you from your homes a place of rest and made for you from the hides of the animals tents which you find light on your day of travel and your day of encampment; and from their wool, fur and hair is furnishing and enjoyment for a time” (Al Quran An-Nahl: 80) The Holy Prophet Muhammad (PBUH.) said; “The happiness of son of Adam is determined by three things: a pious wife, a good house and a good vehicle, and the misery of son of Adam is determined by three things: an impious wife, a bad House, and bad vehicle.” (Musnad Ahmad: 1368). Irrespective of housing being one of the basic necessity, the high expenses to acquire it usually costs people all of their reserves and life savings. But not all people have sufficient resources to get a house and therefore, they often approach the financial institutions in order to fulfil their financial needs. The financial institutions offer house financing facility for buying, construction, renovation or balance transfer (Muhammad Asghar Shahzad, 2012; Shahzad, 2015; Shahzad & Farooq, 2014; Shahzad, Saeed, & Ehsan, 2019) . Conventional banks provide financing for building a house based on interest (Riba), which is strictly prohibited in Islam. According to the Quran, dealing with interest is equivalent to waging war against Allah (SWT) and His Prophet (PBUH) (Council of Islamic Ideology, 2003; Khan, 2000; Shahzad & Hameed, 2018). In order to provide alternative solution of house financing, contemporary Sharī‘ah scholars have introduced Sharī‘ah compliant methods of house financing. There are different modes of Islamic house financing being used in Muslim and non-Muslim countries, i.e., Murabahah Lil-Amiri bi-al-Shira, Istisna’, Ijara, and Diminishing Musharakah (Al-Shalhoob, 2008). However, the Diminishing Musharakah is more acceptable to Sharī‘ah scholars as compared to other modes for house financing. (Shirazi, Syed Ali, & Zafar, 2014)