Is musharakah mutanaqisah a practical alternative to conventional home financing?
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Islamic finance had a healthy double-digit growth in the last decade and an important contribution to this steady success is the increasing demand for Shariah compliant products and services from both Muslims and non-Muslims around the globe. These products and services are perceived to be more resilient in adverse economic conditions, has risk-sharing attributes and provides competitive returns to conventional counterparts. Among others, the musharakah or partnership contract is commonly applied in many investment and financing initiatives. One variation of the musharakah is the musharakah mutanaqisah (or diminishing partnership) that emphasizes on the joint ownership of the asset purchased between the bank and the purchaser (customer).
Islamic finance , Musharakah , Mutanaqisah , Diminishing partnership , Contracts
Muhamad Sori, Z., Ramadili Mohd, S. M., & Asadov, A. (2015). Is musharakah mutanaqisah a practical alternative to conventional home financing? Islamic Finance News Special Report, 12(39), 28-29.