Applicability of mudarabah and musharakah as Islamic micro-equity finance to underprivileged women in Malaysia
Document Type
Article
Publication Date
1-1-2020
Abstract
No microfinance institutions (MFIs) in Malaysia offer mudarabah and musharakah (M&M) as micro-equity instruments. This study looks into the possibility of introducing M&M for underprivileged women entrepreneurs in Selangor State. Hence, it assesses clients' willingness to accept Shariah rules, religiosity, product knowledge and entrepreneurial skills. Data from 330 respondents were collected from female Muslim members of an MFI, namely Amanah Ikhtiar Malaysia (AIM). The data were analysed by using exploratory factor analysis (EFA), confirmatory factor analysis (CFA) and structural equation modelling (SEM). The findings show that women entrepreneurs prefer those Shariah principles that seem easy to comprehend and preserve their interests. They possess primary knowledge of M&M and fairly practise intrinsic and extrinsic religiosity, but lack proper entrepreneurial skills. Therefore, application of M&M would be viable if clients' knowledge of Shariah and M&M were improved along with their religiosity and entrepreneurial skills. These findings would help include M&M within the context of microfinancing.
Keywords
Mudarabah and musharakah, Profit and loss sharing, Islamic microfinance, Poverty alleviation
Divisions
aei,Faculty_of_Business_and_Accountancy
Funders
Institut Pengurusan dan Pemantauan Penyelidikan (IPPP), University of Malaya "Peruntukan Penyelidikan Pascasiswazah (PPP)"-2013 (UM.TNC2/IPPP/PPGP/638/PPP)
Publication Title
European Journal of Development Research
Volume
32
Issue
1
Publisher
Palgrave Macmillan Ltd
Publisher Location
BRUNEL RD BLDG, HOUNDMILLS, BASINGSTOKE RG21 6XS, HANTS, ENGLAND