Understanding of Tawarruq as an alternative to the Bai al-Inah financing in Sabah Credit Corporation (SCC) / Ayuni Mohd Raslim

Islamic Banks offer personal financing in Malaysia based on the concept of Bai al-Inah. However, there exists some concern over the treasure of riba in the implementation of Bai al-Inah especially in Personal Financing. This study hence attempts to seek opinion of scholars, muftis and practitioners (Sabah Credit Corporation’s Staff) on the usage of Bai al-Inah and its alternative, Tawarruq. This study also hence attempts to seek advantages that are available in the contract of Tawarruq which meet the necessary criteria of Islamic Banking. Tawarruq is widely used in the Middle East commercial transaction but not in Malaysia. From a survey of these respondents, I obtained the following findings: 1) Although Tawarruq is better alternative for personal financing, there are still a numbers of SCC’s staff are not familiar with this concept, 2) Tawarruq is acceptable to be used in SCC as the alternative of Bai al-Inah, 3) The acceptance of the majority scholars is really important to boost the confidence of customer is the advantages of Tawarruq concept that really convinced the SCC’s staff.