A study on Islamic home financing: Bai Bithaman Ajil & Musyarakah Mutanaqisah case study: Telekom Malaysia Berhad / Siti Nur Fatimah Mohd Anuar

This case study covers Telekom Malaysia’s home financing under the contract of Bai Bithaman Ajil (BBA) and introduce one type of home financing named Musyarakah Mutanaqisah (MM) to their employees. The BBA is Murabahah contract, based on buy and sell principle where MM includes of Musyarakah (partnership) and an Ijarah (rental) contract where the equity of the financier follows a diminishing balance method. The purpose of this study is to investigate the differences of these two types of financing and also states the advantages of MM over BBA. Scholars are consensus on the Shariah permissibility of the MM contract but not consensus on the permissibility of the BBA contract. Middle Eastern scholars generally disapprove of the BBA. Other than that, this study is beneficial to academics and students by offering an insight into Islamic home financing in Malaysia which has limited previously been investigated. Moreover, bank management can offer more attractive packages of financing for Islamic financing market in order to fulfill customer’s needs.