Can Islamic Financial Literacy Minimize Bankruptcy Among the Muslims? An Exploratory Study in Malaysia

Studies showed that Malaysians possess low financial literacy. Consequently, bankruptcy cases among young adults in Malaysia are rising. The government and its relevant institutions, that is, credit counseling and debt management agency, provide different training and awareness programs to minimize...

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Published in:SAGE Open
Main Author: Abdullah M.F.; Hoque M.N.; Rahman M.H.; Said J.
Format: Article
Language:English
Published: SAGE Publications Inc. 2022
Online Access:https://www.scopus.com/inward/record.uri?eid=2-s2.0-85141979452&doi=10.1177%2f21582440221134898&partnerID=40&md5=63f5b7e8c26b6f75e37b5907b3118705
id 2-s2.0-85141979452
spelling 2-s2.0-85141979452
Abdullah M.F.; Hoque M.N.; Rahman M.H.; Said J.
Can Islamic Financial Literacy Minimize Bankruptcy Among the Muslims? An Exploratory Study in Malaysia
2022
SAGE Open
12
4
10.1177/21582440221134898
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85141979452&doi=10.1177%2f21582440221134898&partnerID=40&md5=63f5b7e8c26b6f75e37b5907b3118705
Studies showed that Malaysians possess low financial literacy. Consequently, bankruptcy cases among young adults in Malaysia are rising. The government and its relevant institutions, that is, credit counseling and debt management agency, provide different training and awareness programs to minimize the bankruptcy rates. Muslims are among the majority that declared bankruptcy; hence, Islamic financial literacy (IFL) may have a considerable role to minimize bankruptcy cases by changing the attitudes and behaviors of debtors. Furthermore, studying IFL is pertinent to Malaysia because it is a Muslim-majority country with the leading Islamic banking market in the world. Therefore, this study aims to construct the theory of IFL from the sources of the Shariah and examines whether it is suitable to implement IFL in different financial awareness programs in Malaysia. The study concludes that IFL provides a comprehensive guideline for borrowers, lenders, financial institutions, and society to reduce bankruptcy. Furthermore, findings from the field study confirmed that IFL could be used in Malaysia to raise awareness among the related parties. This is a qualitative study that employed an inductive and deductive approach to review the sources of the Shariah to come out with Shariah rulings. Furthermore, this study conducted semi-structured interviews with the officials of related government bodies and agencies. It is expected that the outcome would have a direct implication on the policymakers and loaning institutions in Malaysia. © The Author(s) 2022.
SAGE Publications Inc.
21582440
English
Article
All Open Access; Gold Open Access
author Abdullah M.F.; Hoque M.N.; Rahman M.H.; Said J.
spellingShingle Abdullah M.F.; Hoque M.N.; Rahman M.H.; Said J.
Can Islamic Financial Literacy Minimize Bankruptcy Among the Muslims? An Exploratory Study in Malaysia
author_facet Abdullah M.F.; Hoque M.N.; Rahman M.H.; Said J.
author_sort Abdullah M.F.; Hoque M.N.; Rahman M.H.; Said J.
title Can Islamic Financial Literacy Minimize Bankruptcy Among the Muslims? An Exploratory Study in Malaysia
title_short Can Islamic Financial Literacy Minimize Bankruptcy Among the Muslims? An Exploratory Study in Malaysia
title_full Can Islamic Financial Literacy Minimize Bankruptcy Among the Muslims? An Exploratory Study in Malaysia
title_fullStr Can Islamic Financial Literacy Minimize Bankruptcy Among the Muslims? An Exploratory Study in Malaysia
title_full_unstemmed Can Islamic Financial Literacy Minimize Bankruptcy Among the Muslims? An Exploratory Study in Malaysia
title_sort Can Islamic Financial Literacy Minimize Bankruptcy Among the Muslims? An Exploratory Study in Malaysia
publishDate 2022
container_title SAGE Open
container_volume 12
container_issue 4
doi_str_mv 10.1177/21582440221134898
url https://www.scopus.com/inward/record.uri?eid=2-s2.0-85141979452&doi=10.1177%2f21582440221134898&partnerID=40&md5=63f5b7e8c26b6f75e37b5907b3118705
description Studies showed that Malaysians possess low financial literacy. Consequently, bankruptcy cases among young adults in Malaysia are rising. The government and its relevant institutions, that is, credit counseling and debt management agency, provide different training and awareness programs to minimize the bankruptcy rates. Muslims are among the majority that declared bankruptcy; hence, Islamic financial literacy (IFL) may have a considerable role to minimize bankruptcy cases by changing the attitudes and behaviors of debtors. Furthermore, studying IFL is pertinent to Malaysia because it is a Muslim-majority country with the leading Islamic banking market in the world. Therefore, this study aims to construct the theory of IFL from the sources of the Shariah and examines whether it is suitable to implement IFL in different financial awareness programs in Malaysia. The study concludes that IFL provides a comprehensive guideline for borrowers, lenders, financial institutions, and society to reduce bankruptcy. Furthermore, findings from the field study confirmed that IFL could be used in Malaysia to raise awareness among the related parties. This is a qualitative study that employed an inductive and deductive approach to review the sources of the Shariah to come out with Shariah rulings. Furthermore, this study conducted semi-structured interviews with the officials of related government bodies and agencies. It is expected that the outcome would have a direct implication on the policymakers and loaning institutions in Malaysia. © The Author(s) 2022.
publisher SAGE Publications Inc.
issn 21582440
language English
format Article
accesstype All Open Access; Gold Open Access
record_format scopus
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