Islamic Consumer Financing I

Based on the article, which Islamic home financing structure is the most prevalent among Malaysian Islamic banks?

• Musharakah Mutanaqisah

• Tawarruq

• Ijarah Muntahia Bittamlik

• Baiʿ Bithaman Ajil (BBA)

In Musharakah Mutanaqisah home financing, how does the customer gradually acquire full ownership?

• By paying rent that automatically converts into equity

• By buying out the bank’s share step by step while paying rent for the bank’s portion

• By refinancing the property with another institution

• By pledging the property as collateral for a new loan

Which of the following is a Shariah compliance issue identified with Murabaha financing in practice?

• The bank sells the house without first taking ownership

• The customer is forced into partnership without consent

• The contract includes speculative derivatives

• The rental fee is based on interest rate benchmarks

In an Istisnaʿ al-Muwazi home financing arrangement, how does the bank manage its dual role?

• It acts only as financier without obligations.

• It signs two separate contracts — seller to customer, buyer from contractor.

• It guarantees profits to both customer and contractor.

• It sub-leases the construction rights to a third party.

A key issue with Musharakah Mutanaqisah (MM) financing in Malaysia, as identified in the article, is:

• Early settlement penalties contradict Shariah.

• The buy-back undertaking sometimes blurs independence from the partnership contract.

• The property cannot be insured with takaful.

• The profit-sharing ratio is fixed like interest.

What happens at the end of the lease in Ijarah Muntahia Bittamlik (IMBT)?

• The property reverts to the bank.

• Ownership of the property transfers to the customer

• The customer must enter a new lease contract.

• The property is auctioned and proceeds shared.

According to the article, which other significant home financing structure could be used but is not prevalent in Malaysia?

• Tawarruq-based financing

• Istisnaʿ-based financing

• Salam contract financing

• Bayʿ al-ʿInah financing

How can Murabaha be adapted for vehicle financing?

• Customer pays rent until full ownership transfers.

• Bank purchases the vehicle, assumes ownership, then sells to the customer at a markup.

• The customer and bank share ownership equally.

• The bank only finances a cash loan for the car.

What condition allows the customer to obtain ownership in vehicle financing under Ijarah (AITAB/IMBT)?

• Paying all rentals, after which ownership is transferred at nominal price.

• Refinancing through Murabaha at the end of the lease.

• Sharing equity with the bank.

• Returning the car and purchasing a new one

Which of the following is a general issue across all consumer financing structures highlighted in the article?

• Banks avoiding genuine risk-taking

• Excessive reliance on Mudaraba contracts

• Lack of regulatory approval

• Overuse of Salam contracts in housing