Takaful Scheme Research Articles

EXPLORING THE ROLE OF GOVERNMENT ASSISTANCE TOWARDS MICROENTERPRISES' PARTICIPATION IN TAKAFUL: A QUALITATIVE PERSPECTIVE

The study aims to discuss a comprehensive overview pertaining to the microenterprise’s participation in Takaful with the aid of government role. This study was conducted qualitatively where the data gathered through semi-structured interview with a microenterprise’s owner. The findings revealed three distinct themes that consist of business operations and risk exposures, the awareness of microenterprise owner with regards to Takaful and Insurance schemes, and his perception towards government role in assisting business owner to participate in Takaful. From the findings, it showed that low risks encountered by the owner due to strategic location of his business and there is an awareness on the importance of protection (Takaful/insurance) in protecting himself and his business. Furthermore, the findings also discover the limitation of the owner’s understanding relating to government assistance in helping the microenterprises to participant in Takaful scheme. The findings of the study enrich the existing knowledge about the obstacles and possibilities encountered by microenterprises. Additionally, the data gathered can be used to develop policies and support systems that are specifically designed to address the business risks among microenterprises.

Smallholder Farmers’ Readiness for Contributing to Crop Microtakaful Scheme

The study intends to identify smallholder farmers’ readiness to participate in Crop Microtakaful Scheme. This protection is significant for smallholder farmers to provide sustainable economic growth and food security. To understand the necessity of having the scheme, a few key areas must be observed. An overview of the smallholder farmers in Malaysia is presented, focusing on their demographics, readiness to participate in the scheme, and affordable contributions. In addition, risks and perils in agriculture, including natural disasters, pests, and crop diseases, are also outlined. The role of agriculture insurance/takaful is also discussed, highlighting its many benefits to smallholder farmers. For this study, a survey is carried out among 275 smallholder farmers to gain information on their demographic profiles, farming activities, and willingness to contribute to the Crop Microtakaful Scheme. The information is vital in developing a suitable and well-accepted Crop Microtakaful Scheme, specifically among the smallholder farmers in Malaysia. Findings show that a large percentage of the smallholder farmers were ready to participate in a takaful scheme to protect their crop losses. Contributions vary greatly, with 54.2% of respondents willing to contribute an amount ranging from RM50.00 to RM149.00, while 33.9% of respondents are only willing to contribute an amount of less than RM50.00. The Crop Microtakaful Scheme can reduce the community’s dependence on the government with stakeholders’ involvement in contributing a certain sum as part of their corporate social responsibility initiative.

HARNESSING SUSTAINABLE NATIONAL FOOD SECURITY THROUGH INTEGRATED AGRO-TAKAFUL FRAMEWORK IN MALAYSIA

Agriculture is a crucial economic sector to generate income and supply food resources for a country. The agriculture sector contributes 7.1 per cent (RM101.5 billion) to Malaysia Gross Domestic Product (GDP) and provides 10.5 per cent (1,566.0 thousand) jobs in 2021. However, the agro-food agriculture sector is exposed to many risks due to disasters caused by climate change, diseases, and pest attacks. It is estimated that the loss suffered by the agro-food sector is around RM90.6 million due to the flood incidents that hit several states in recent years. This condition is quite concerning because it leads to the destruction of livestock and crops, which will have an impact on farmers' income. In the long run, this may have an impact on the assurance of national food security as well as the occurrence of poverty. Until now, there hasn't been a national takaful programme that safeguards the rice agro-food sector as the primary source of food supply in Malaysia. The takaful scheme is believed to have the potential to provide social security guarantees in the form of income protection for rice farmers and further ensure the national food supply. This study employs document analysis of article journals, internet sources and policy documents to understand the current state of Malaysia’s takaful business in addressing agriculture risks. It is also important to explore the understanding of the rice farmers in Malaysia on the agriculture takaful. The novelty of this study is to explore the potential of introducing a blended financing mechanism of Islamic social finance (ISF) on the existing takaful business structure to establish a viable agriculture takaful framework based on the principle of ta’awun (cooperation) that can secure farmers' income more sustainably as well as preserve the national food security.

Business entrepreneurs’ intention towards takaful participation to mitigate risk: a study in Sri Lanka based on the theory of planned behaviour

PurposeTakaful is a social security approach that guarantees business risks in light of shari’ah, thus playing a crucial role in human life and the economy. The purpose of this study is to examine the factors that influence the behavioural intention of micro, small and medium-sized enterprises (MSMEs) entrepreneurs to participate in takaful in Sri Lanka.Design/methodology/approachThis study is designed quantitatively with deductive approach using the theory of planned behaviour. A total of 432 MSMEs in Sri Lanka were surveyed using convenience sampling to measure the intention to participate in takaful as a risk mitigation. The collected data were analysed through partial least square-structural equational modelling.FindingsAttitude, subjective norm and perceived behavioural control variables positively influenced the intention, with t-values of 3.216, 3.813 and 3.859, respectively. The influence of these variables exhibits not much difference.Research limitations/implicationsThis study only focuses on MSMEs and a general takaful scheme. Future researchers may consider family takaful involvement among Sri Lankan business entrepreneurs.Practical implicationsTakaful practitioners should gain from the entrepreneurs’ intention to participate in takaful. Findings from this study could help marketing managers to revamp their strategies to further attract the entrepreneurs and make them to understand risk they are facing and, subsequently, participate in the takaful scheme.Originality/valueThis paper focuses on the context of Muslim minority among pluralism, where there is no regulation for Islamic financial products and services, and under the Islamic financial market crisis. This unleashes how business owners feel about takaful system on different dimensions.

Involvement of micro, small and medium entrepreneurs (MSMEs) in takaful in Sri Lanka: an extension of theory of planned behaviour

PurposeThis study aims to investigate the factors affecting micro, small and medium entrepreneurs’ (MSMEs) behavioural intention to participate in takaful schemes in Sri Lanka.Design/methodology/approachThis research adopted a quantitative approach using primary data from a questionnaire. Out of 470 questionnaires, 432 were collected (91.91%) from MSMEs in Kalmunai business region in Sri Lanka. The data obtained were analysed using partial least square-structural equation modelling.FindingsThis study revealed that the extension model of the theory of planned behaviour (TPB) can be effectively applied to behavioural intentions towards a takaful scheme by MSMEs. Out of eight hypotheses, seven were significant, including: attitude towards behavioural intention; subjective norm; perceived behavioural control; knowledge; religiosity; income; trust in takaful as a significant influence. However, awareness of intention was not found to be significant.Practical implicationsThis study suggests advantages for takaful providers in Sri Lanka, especially marketing departments, for enhancing sale of products, refurbishing marketing strategies and understanding the purchasing motivation of business entrepreneurs. This study guides takaful companies as to where they should concentrate to enhance market penetration.Originality/valuePrevious studies have concentrated on only three factors which comprise TPB. This paper’s main contribution is on the uniqueness of the Muslim minority context in a pluralistic context, providing a marketing model for takaful operators based on the different relevant dimensions.

Does Nigerian Low-Income Families Need For Micro Family Takaful Scheme?

Does Nigerian Low-Income Families Need For Micro Family Takaful Scheme?

Takaful Scheme for Mental Health Disorders: A Systematic Literature Review

Wealth management involved cycles which are wealth creation, wealth protection, wealth distribution, wealth purification, and wealth accumulation that must in line with the financial objectives of the individual through their life. The current study is focused on the wealth protection element which a takaful scheme for mental health disorders. However, little was known about it. Thus, the objective of this systematic review was to synthesize findings of trend and population-based studies on takaful scheme for mental health disorders. The aim was to presents an extensive systematic review of takaful schemes for mental health disorders. A systematic review was identified using electronic database searches (Google, PubMed, and Scopus), previous reviews and reference lists to identify articles published between 2010 and 2020. Narrative synthesis and systematic review were performed and reported according to the preferred reporting items statement. The current evidence showed there is less study on takaful schemes for mental health disorders in the period 2010 to 2020. The two main contributions of this paper are its use of a readily-available and powerful new instrument, and its use of extremely large data which gives us the power to takaful scheme for mental health disorders for disaggregated health care services. More good quality of systematic literature with comparable assessment tools is needed.

Market thoughts: Potential implications of COVID-19 on takaful scheme for mental health disorders

Malaysia's takaful market is showing steady growth and is overtaking conventional insurance in a very obvious way despite the pernicious COVID-19 pandemic hitting global Islamic finance sectors. As comparison, family and general takaful premiums rose by 29.6 percent and 16.4 percent respectively in the first half of 2019, as compared with 12.2 percent in conventional life and -1.3 percent in general insurance. The COVID-19 pandemic's rapid emergence poses unparalleled challenges the world is dealing with. In addition to the risks to human health and lives, this pandemic has a drastic effect on companies and economies worldwide and is also affecting people's mental health due to depression issues. Hence, this commentary aims to discuss the market thoughts on the potential implications of COVID-19 on takaful scheme for mental disorders. Mental health issues in Malaysia continue to be a major concern, generating debates about causes, responses and, more recently, insurance or takaful plans. Mental illness is costly to treat, especially for the disfavoured group. As a result, people with an ultimate goal will try to have a good plan protection to cover their uncertain health conditions. Thus, to overcome this scenario takaful provider should introduce a takaful scheme for mental health disorders in the country where the growth of market potential is there.

Malaysian Consumer Intention toward Takaful Scheme for Mental Health Disorders

This paper investigates the factors influencing Malaysian consumer intention toward takaful scheme for mental health disorders. An applied expanded Theory of Reasoned Action (TRA) model were used in the research and the variables of awareness, perception, attitude, subjective norm and intention toward a takaful scheme for mental health disorders were investigated. It is a pilot research carried out in Malaysia. The respondents are 60 Malaysian takaful consumers based on an online survey inside Klang Valley, Malaysia. This study reveals that the mean of attitude with the score of 4.27 is the highest score. The Pearson correlation is positive for both independent and dependent variables. Analysis of regression indicates a strong positive relationship between subjective norm and intention, thus suggesting that subjective norm is an important area to link to intention against mental health disorder takaful scheme. This is also proposed that future studies will concentrate on the factors that affect the willingness of consumers towards takaful mental health disorder schemes. It is hoped that the results of this study will serve as an informative reference for further development of takaful scheme for mental health disorder.

Determination of Malaysian consumer intention toward purchasing Takaful scheme for mental health disorders

Purpose – The purpose of this paper is to determine the factors influencing Malaysian consumer toward intention to purchase Takaful scheme for mental health disorders. Design/methodology – This paper adopts a quantitative approach by using an extended Theory of Reasoned Action (TRA) model. A pilot study with the total of 60 questionnaires were obtained from online survey to examine the significance relationship using multiple regression analysis. Findings – The result from this study portrays that subjective norm are strong predictors of a Malaysian consumer intention to purchase Takaful scheme for mental health disorders. Moreover, factors such as awareness, perception and attitude have positive and significant impacts on consumer intention to purchase takaful scheme for mental health disorders in Malaysia. Research limitation – There are some constraints. First, it focuses only on the actions of Malaysian consumers against a takaful scheme for mental health disorders; thus, the findings cannot be generalized to other takaful schemes. Therefore, more studies in other takaful settings, such as general takaful, need to begin. Second, this study considered only four factors were awareness, perception, attitude and subjective norm, and the factors selected might not cover all the factors which may have an effect on Malaysia's intentions toward takaful mental health disorders scheme. Originality - This study not only helps takaful operators design, develop and promote better approved takaful products and services, but also offers a new insight into how these products and services can be marketed to these particular consumers. Previous empirical studies that employed TRA focused on various types of variables, such as attitude and subjective norm, especially in the financial service environment. This research thus adds to the body of information by analysing the relative value of the goal affecting it.

Developing a sustainable model of Waqf-based Takaful for flood victims in Malaysia

Purpose Given the scarcity of Takaful products to provide financial preparation for flood victims, this study aims to propose an alternative Takaful model based on Waqf principle for the flood victims in Malaysia. This study serves as an initial stage to propose the above Takaful model and discusses the theoretical background of the model, which includes identifying the suitable Islamic principles and roles of parties involve in the model framework. Design/methodology/approach To achieve the said objectives, this paper reviews previous studies, opinions of scholars and existing Takaful models that are currently offered in the market. Findings In an effort to alleviate the financial burden of businesses and individuals affected by flood, Takaful industry needs to offer a special Takaful scheme to the flood victims and achieve its main objective to prepare a financial protection for social well-being. There is no harm for the various institutions (Takaful operators and State Islamic Religious Council) to do collaboration in realizing the Waqf-based Takaful model to ensure it is done in its original form to achieve the maqasid Shariah. Practical implications As an Islamic entity, the objective of Takaful business should focus on assisting the society in reducing their financial burden rather than just concentrating on achieving business profit. Thus, Waqf-based Takaful model would give platform to the operators to play their role in the society. Originality/value The views discussed in this paper originally from the researchers which is done by integrating the Islamic principles and roles of all stakeholders that may involve to implement Waqf-based Takaful model mainly for risk and financial protection for the future flood victims. The proposed framework discussed in this paper is in original form as a result of literatures and market practice in Malaysia.

Is the Introduction of National Plan of Coastal Erosion Takaful Scheme Necessary?

Is the Introduction of National Plan of Coastal Erosion Takaful Scheme Necessary?

Predicting customers’ adoption towards family takaful scheme in Pakistan using diffusion theory of innovation

PurposeThis paper aims to examine the determinants that influence the customer’s adoption towards the use of family takaful scheme by extending diffusion theory of innovation (DOI) in the context of Pakistan.Design/methodology/approachThe published work allied to takaful studies and DOI was reviewed. Total of 282 respondents who are non-users of family takaful product were used for the purpose of primary data collection through convenience sampling.FindingsThe customer’s adoption towards Islamic insurance is determined not only by perceived relative advantage and perceived compatibility but also by awareness and religious belief. Perceived complexity, on the contrary, turns out not to be a predictor of family takaful adoption. Further, gender, age and education do not moderate the family takaful adoption by the customers.Research limitations/implicationsThis research alike others have limitations in terms of sampling method used and only covers one city of Pakistan, namely, Karachi. Further studies need to be conducted in other cities as well with a large population.Originality/valueExtended DOI is not used in the context of takaful in Pakistan as evident from scarce literature on the empirical studies. Therefore, the authors extend the DOI in the current work. Further, this paper will be a useful reference guide for the academicians, operators of takaful business and future researchers.

THE TENDENCY OF USING MICRO TAKAFUL AMONG MICRO, SMALL AND MEDIUM ENTREPRENEURS AT PELEPAT ILIR, JAMBI, INDONESIA

Micro takaful is one of the takaful product development strategies in developing the 'marginalized' economy of financial institutions. The objective of this study is to provide empirical evidence on financial inclusion as a factor of behavioral control in the Theory of Perceived Behavior (TPB) to analyze its influence with the tendency of micro, small and medium enterprises (MSME) entrepreneurs to the use of micro takaful. Data distributed via questionnaires to 372 respondents were analyzed using descriptive and structural equation modeling. The results of the study showed that there was a positive and significant effect between attitude and financial inclusion on the tendency of using micro takaful. On the contrary, subjective norm factors have no significant effect on the proposed model. The implications of the study indicate that financial inclusion is one of the most important policies to achieve sustainable development. In addition, takaful institutions and policy makers need to expand the supply of microfinance products, especially micro takaful scheme to MSME in Indonesia to ensure the protection and security of their businesses.

Exploration of Micro-Finance Banking Policies and Strategies for Poverty Reduction in Nigeria

Poverty is one of the socioeconomic challenges bed evilling many families, particularly the northern states of Nigeria. This study applied qualitative research paradigm and generated the perceptions of informants via convinience sampling. We analyzed the data through thematic, narrative and interactional apparoach. Our objective is to explore microfinance institutions strategic policies for poverty reduction and recommend to policy makers. The results exposed that micro financial institutions were classified into formal, informal, development and those with mortgage outlook.The Central Bank of Nigeria issue the certificate for authorization, the licensing and ownership. The Paid-up capital requirements, the permissible and acceptance of deposits, savings from individuals, groups and associations were the policies which propel these institutions. The non-permissible policies are restrictions on acceptance of public sector deposits. The study identified inadequate supervsions and loans defaults, poor infrasturectural facilities in rural areas, pitiable communication and derisory banking experience among the poor and low income earners, limited standardization and operating system as well hampered their services in the quest to mitigate poverty in the study area.The re-capitalization, efffective regulatory control via financial control, regularly supervision, checks and balances. Capacity building programs and Proper staffing.Provision of appropriate business model; strategies and creation of awareness. The provision of door to door banking marketing awareness, establishment of financial literacy; consumer protection programs and Provision of non-interest banking programs were perceived to overcome the perils of these institutions respectively. The study recommended for establishment of Islamic financial institutions and Takaful insurance scheme.

Leveraging on Religious and Ethical Aspects in Marketing Takaful Products- Malaysian Experience

Takaful serves as an alternative for the Muslims to fulfill their insurance needs in a Shariah compliant manner. Participating in a takaful scheme, while aimed mainly at gaining protection against the risks, could also be perceived as a scheme of mutual help. The religious and ethical aspects of takaful can be an attractive value proposition to the people especially Muslims, as in Islam helping those in need with sincere intention for the sake of Allah is an act of piety rewarded by Him. Apart from the inherent spiritual distinctive feature of takaful, takaful products might also provide for other religious contentment. Some takaful products cover debt settlement for the deceased, payment for outstanding zakat, execution of charitable donation or waqaf and even providing for the performance of hajj, which are religiously of tremendous values for the deceased. All these features could be attractive marketing points for takaful especially among the Muslims. This study focuses on the religious and spiritual dimensions of takaful products and explores on the experience of a group of takaful agents of a selected takaful operator in marketing their products by leveraging on these aspects.

The Perception of Muslim on Family Takaful Scheme Participation in Malaysia: A Qualitative Study

Takaful industry has experienced rapid growth and gained wider acceptance among Muslims and non-Muslims. The growth of takaful industry has contributed to economic development especially in the Islamic financial system. In general, this study discusses the perception of Muslim on family takaful scheme participation in Klang Valley, Malaysia. In particular, this study aims to identify the perception of Muslim on family takaful scheme participation, the sources that might influence the intention to participate into the scheme, the perception on the importance of Islamic element in purchasing insurance, and problems that might impede individual’s intention from participating in family takaful scheme. This study uses semi-structured interviews question to collect the data. Interview data are analyzed using thematic analysis. The result shows that Muslim perception and intention to participate in family takaful scheme is mixed. While most of the respondents agree that family takaful is a necessity, money was the main factor that impedes their intention from participating in the scheme. This study suggests the influence of media and takaful agent in enhancing Muslim awareness, knowledge and intention to participate in family takaful scheme.

Predicting intention to participate in family takaful scheme using decomposed theory of planned behaviour

Purpose The purpose of this paper is to examine the factors that influence an individual’s intention to participate in the family takaful scheme based on decomposed theory of planned behaviour (DTPB). The central hypotheses for this study are that individual’s intentions to participate in family takaful scheme are a result of attitudes towards participation in family takaful scheme, subjective norms, and perceived behavioural control (PBC). Awareness and knowledge, as well as exposure and religiosity, are integrated into the model. Design/methodology/approach Using primary data collection method, 384 questionnaires were distributed to target respondents comprising of Muslims in Klang Valley, Malaysia. The data were analysed using Statistical Package for the Social Sciences and SmartPLS. Findings The DTPB model is effective in predicting individual’s intention to participate in family takaful scheme. Out of 15 hypotheses, 12 were found to be significant. Attitudes towards participation in family takaful scheme, PBC, knowledge, and exposure have significant influences on purchase intention. However, this study found the path from religiosity, awareness, and subjective norm to intention was insignificant. Practical implications The results of this study highlight the applicability of DTPB into takaful research and suggest marketing strategies for family takaful operators. Originality/value The value of this paper lies in its presentation of a model for factors that affect individual’s intention to participate in family takaful scheme.

The roles of mass media, word of mouth and subjective norm in family takaful purchase intention

Purpose – This paper aims to address the influence of mass media (MM) and word of mouth (WOM) on subjective norm (SN) and the intentions to purchase a family takaful scheme among Muslim Malaysians. Design/methodology/approach – Data were collected from 384 Muslim consumers in Kuala Lumpur, Malaysia, using a convenience sampling approach. The hypotheses were tested by applying structural equation modelling. Findings – The results revealed that MM and WM were able to influence SN. In addition, the results also found that SN significantly influences intentions to purchase a family takaful scheme. Practical implications – By examining MM and WM on SN, the study validated the importance of both constructs in affecting consumers’ SN and purchase intention. This study would be useful for takaful operators, as the findings would help them to formulate strategies for promotional activities. Originality/value – This paper empirically justifies the relationship between MM and WM on SN and purchase intention of family takaful schemes in an integrated model.

What drives consumers to participate into family takaful schemes? A literature review

Purpose – This paper aims to examine the basic determinants of consumers intention to participate in family takaful scheme using decomposed theory of planned behaviour (DTPB) and identifying relevant factors may be moderate the relationship. Design/methodology/approach – A comprehensive review of the DTPB literature is undertaken, with a particular focus on contribution to family takaful scheme. Findings – The review finds that intention toward participating in family takaful scheme is are not only affected by attitude, subjective norm and perceived behavioural control but also influence by moderating factors like demographic variables, consumer knowledge, situational factors and consumer level of religiosity. Inhibiting factors related to insurance and takaful purchase is also highlighted. Originality/value – Such an extensive review on identifying relevant factors to participate in takaful using DTPB has not been done before. The paper will be useful to researchers, professionals and others concerned with family takaful to understand the importance factors in participating in family takaful scheme.