Shariah Solutions to Minimising Personal Bankruptcy Cases in Malaysia: A Juristic Analysis
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This study aims to analyse the Shariah principles for borrowing and lending practices to minimise bankruptcy cases among the public. Several elements in the Shariah may have effect changes in the behaviours and attitudes of debtors. Firstly, Shariah discourages individuals from taking a loan for luxury items even though it is permissible in Shariah. Secondly, people are advised to be prudent in their spending and cautious against succumbing to desires. Finally, there is a genuine concern in Shariah on the repayment of loans and debts. Apart from that, Shariah advises the creditors to extend the time for repayment without charging interest if the debtor is in difficulty. For Islamic financial institutions, Shariah prescribes profit and loss sharing contracts. Furthermore, different types of charities, i.e. zakat, sadaqah and waqf, might be used in the Muslim society to protect the debtors from bankruptcy. This study adds new knowledge in Islamic financial literacy, which would contribute to enhancing the financial well-being of the people.
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