~MMP~

Sedikit penerangan berdasarkan pengetahuan in term of musyarakah mutanaqisah financing

Nowdays, many of financing like home financing uses the bai bithaman ajil (BBA), murabahah, al-ijarah thumma al bai, bai salam and others financing. In term of BBA rate, changing the profit rate will change the sale price of BBA asset. Its good idea to use floating rate BBA during economic slowdown??. If recession stays longer, the Islamic bank can’t used the BBA contract because they involved in higher risk and just hurt for their earning.

So, how can Islamic bank take an alternative??

One way to solve this problem , Islamic bank should apply the contract of partnership of ownership in arabic what we call ‘musyarakah mutanaqisah’(MMP).

This contract can avoid from interest bearing loan in term of financing. MMP contract is partnership contact involved into two parties ( bank and customer) where one party buy the share to get full ownership of asset.

As an example, this diagram gives you more understand about MMP contract


SORRY......gambarajah hilang!!!!

For example the price of housed at RM100,000. The bank contribute 90% ‘RM90,000’ as capital while customer contribute 10% is rm10,000

As we know, the capital contribution ratio is not fixed, it can adjust based on negotiated between two parties.

So, this home financing, the bank and customer should pay rental payment as many RM500, but RM300 must be pay by customer as addition purchase of that share from bank.

However, bank and customer get the profit in term of their ratio, but at the same time the customer buy the share from the bank.

Finally, Selepas kesemua share dibeli oleh customer, the asset ‘rumah anda’ become ownership 100% keatas hak anda.

Setahu saya, dua sahaja Islamic bank implement this contract, AFFIN ISLAMIC BANK AND BANK RAKYAT.

THANKS…

Maaf gambarajah xleh nak masukkan..