An Islamic Debt and Wealth Management Framework in the Context of Malaysia

Abstract

The study aims to develop an Islamic debt and wealth management framework based on Shariah to improve Malaysians' financial behaviour. This is a qualitative study where semi-structured interviews were conducted to collect the primary data. The target respondents were local Shariah scholars and the Credit Counselling and Debt Management Agency (AKPK). A purposive sampling technique was used to select the samples from the population, including six Shariah scholars and six AKPK officers. The collected data were analysed thematically to come up with the main findings of the study. The study reveals several Islamic guidelines to manage personal debt and wealth. The findings outline that Islam discourages debt in personal life. Moreover, it allows debt restructuring to reduce the default rate in order to prevent insolvency. Besides, Islam encourages the practice of wealth accumulation through saving and investment, wealth protection through Takaful, balanced spending of wealth to form capital, earning a decent income, avoiding debt, securing wealth and ultimately overcoming financial difficulties. This study contributes to guiding Malaysians and other individuals to improve their financial behaviours by following Islamic guidelines of debt and wealth management so that they can avoid personal financial difficulties resulting from inefficient management of debt and wealth.