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

Abstract

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.

Sharia stock investment decisions: Sharia stock literacy and risk factors and their relations with behavioral bias

“…Similarly, stronger representativeness behavior correlates with larger investment decisions investors make (Novianggie & Asandimitra, 2019). Research indicates that Sharia stock literacy affects Sharia stock investing decisions through behavioral bias (Abdullah et al 2022;Albaity and Rahman 2019;Alsayigh and Al-Hayali 2022;Gunawan et al 2021;Hariawan and Canggih 2022;Humaira 2021;Roemanasari and Sabela 2022) show that Sharia stock literacy influences Sharia stock investment decisions through behavioral bias. Thus, the following is the research's hypothesis, which is based on the description and findings of prior studies:…”

“…Investors must also have Sharia stock literacy to help households manage daily finances, handle emergencies, and pull them out of poverty. In addition, investors with financial knowledge and skills will make individuals capable of managing and allocating finances appropriately (Abdullah, Hoque, Rahman, & Said, 2022;Albaity & Rahman, 2019;Alsayigh & Al-Hayali, 2022;Gunawan, Asmuni, & Siregar, 2021;Hariawan & Canggih, 2022;Roemanasari & Sabela, 2022).…”

The Attitude of Kursk Region Population to the Individuals’ Bankruptcy: a Sociological Analysis

“…Также зарубежными учеными исследованы и проанализированы основные причины, приведшие к банкротству физических лиц, среди которых выделяются проблемы со здоровьем [14], низкая финансовая грамотность [15], нарушение отношений между потребителями и банками [16], гендерные особенности [17].…”