Micro-takāful scheme for the protection of houses belonging to low-income groups in Malaysia

Abstract

PurposeThis study aims to assess the availability of micro-takaful (micro-Islamic insurance) schemes for the protection of houses belonging to low-income groups in Malaysia.Design/methodology/approachThe study is conducted via desk research and interview discussions with representatives from takaful operators and key stakeholders.FindingsFindings of the study confirm the importance of micro-takaful as a scheme for the protection of low-income groups. Micro-takaful schemes in Malaysia are, however, skewed towards the protection of health, life and family. The study finds little industry interest in the provision of micro-takaful schemes for the protection of houses for low-income groups. This represents another important area that takaful operators should take into consideration in their planning.Research limitations/implicationsThe paper will help the Majlis Agama Islam Negeri-Negeri (MAINs), the regulator, takaful operators and government agencies such as Jabatan Wakaf, Zakat dan Haji (JAWHAR) to generate awareness and promote the offering of micro-takaful schemes for the protection of houses belonging to low-income groups in Malaysia.Practical implicationsIn light of the limited availability of micro-takaful schemes for the protection of houses for low-income groups, this study argues that takaful operators should offer and promote them.Social implicationsThe study is significant for fulfilling the need of low-income groups in Malaysia to protect their houses in the event of catastrophes so that they will not suffer significant losses. Rather, micro-takaful will assist them in improving their standard of living.Originality/valueThis study promotes the idea that it is essential to facilitate the low-income groups with appropriate coverage made available to them; micro-takaful schemes in protecting their houses and home contents, should any defined calamities occur. The outcomes are necessary for further development of micro-takaful models, specifically for the protection of properties. The developed model shall be proposed for application in the Malaysian takaful and housing industry to facilitate low-income groups to obtain protection for their household and home contents.

Awareness of Microtakaful Development among Low-Income Earners in Malaysia

“…However, not all vulnerable people are able to effectively advocate for themselves (LoBiondo-Wood & Haber, 1998). According to Matul (2005), twenty percent of rural households have no fixed source of income and hardly save income due to urgent necessities like groceries, education expenses, and utility bills taking priority. Limited resources hinder effective financial planning for them.…”

Advancing social impact through Islamic social finance: A comprehensive bibliometric analysis

“…ISF specifically includes zakah (Abdullahi, 2019), infaq (Mustika et al, 2019), and alms (Abdullahi, 2019). Economic sources of waqf by strengthening waqf in the form of cash-waqf (Usman and Ab Rahman, 2021), productive waqf (Muthoifin and Firdaus, 2020), waqf sukuk (Ascarya et al, 2022), and waqf for infrastructure (Mohd Fauzi and Laldin, 2022).…”