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RENT TO OWN AS VALUE-BASED FINANCIAL INTERMEDIATION: LEGAL AND SHARIAH ANALYSIS

Authors :
Mohd Zakhiri Md Nor
Ani Munirah Mohamad
Ain Husna Mohd Arshad
Najah Inani Abdul Jalil
Source :
Journal of Business Management and Accounting, Vol 11, Iss 1 (2021)
Publication Year :
2021
Publisher :
UUM PRESS, 2021.

Abstract

Generally, Rent to Own (RTO) is a financial scheme offered by financial institutions to help those who cannot afford the 10% initial deposit and access to financial schemes. One value-based intermediation (VBI) initiative is the RTO Islamic financing product. The market segment of this product is for the new generation whereby they can own a house without paying any deposit on account of the fact that housing estates are increasingly expensive. This paper starts with the background concept of VBI, then it discusses on the modus operandi of RTO offered by financial institutions. This paper also discusses legal and Shariah aspects related to RTO. Adopting a qualitative method, the data were collected through semi-structured interviews with relevant parties involved with the RTO product. In addition, some preliminary information had been accessed through the financial institution’s website. This paper found that RTO has played important roles as one viable VBI initiative and it is approved as a Shariah compliant product

Details

Language :
English, Malay
ISSN :
22319298 and 26369249
Volume :
11
Issue :
1
Database :
Directory of Open Access Journals
Journal :
Journal of Business Management and Accounting
Publication Type :
Academic Journal
Accession number :
edsdoj.f5a46157c3a9468d923b8e394fc7a7e5
Document Type :
article
Full Text :
https://doi.org/10.32890/jbma2021.11.1.3