International Journal of Academic Research in Business and Social Sciences

search-icon

Islam, Western Materialism and Malaysian Muslims’ Complex Debt Behavior: An Analysis of the Religious Experts’ Viewpoints

Open access
Malaysian Muslims household debt level has been persistently increasing despite its overwhelming negative effects. This paper attempts to explain the influence of two dominant conflicting ideologies namely Islam and western materialism on Muslims debt behavior. Semi-structured interviews were carried out with six religious experts including two state muftis from Malaysia. Three out of five hypotheses are supported and five other vital issues have emerged. The findings show Muslims debt behavior turns complex when facing the conflict between religious values and materialistic objectives with materialism supersedes Islamic religiosity. Islamic banking and finance (IBF) successfully dilute the conflicts by offering debt-based Syariah-compliant financing that can fulfil both material aspirations and religious consciousness. Certain traditional Islamic principles are compromised with religious experts taking soft stance concerning their applications. Ambiguities, inconsistencies, misleading information, hasty interpretation of riba’, unrealistic aspirations and unconditional support for IBF are other pressing issues emerged from the interviews. Despite the Muslims’ increasing interest in Islam, there is clear lack of concrete guidance on the matter of debt as far as religious experts’ views are concerned. This paper has important implications for understanding in depth the underlying reasons behind Malaysian Muslims’ complex debt behavior reflected by their growing indebtedness. For future research, a survey among ordinary Muslims should be carried out in order to have a broader understanding of Muslims’ actual debt behavior.
Ahmad, K. (2000). Islamic finance and banking: the challenge and prospects. Review of Islamic Economics, 9, 57–82. http://mihe.albaraa-soft.co.uk/sites/default/files/upload/Documents/Review of Islamic Economics.pdf
Ahmed, A. S. (2003). Postmodernism and Islam: Predicament and promise. Routledge.
Al-sultan, W. (1999). Financial characteristics of interest-free banks and conventional banks [University of Wollongong]. http://ro.uow.edu.au/theses/1019
Ali, M., & Chin-Hong, P. (2015). Factors affecting intention to use Islamic personal financing in Pakistan: Evidence from the modified TRA model. https://mpra.ub.uni-muenchen.de/66023/
Amin, H., Abdul-Rahman, A.-R., & Abdul Razak, D. (2014). Theory of Islamic consumer behaviour: An empirical study of consumer behaviour of Islamic mortgage in Malaysia. Journal of Islamic Marketing, 5(2), 273–301. http://dx.doi.org/10.1108/JIMA-06-2013-0042
Amin, H., Abdul Rahman, R. A., & Abdul Razak, D. (2014). Consumer acceptance of Islamic home financing. International Journal of Housing Markets and Analysis, 7(3), 307–332. http://www.emeraldinsight.com/doi/10.1108/IJHMA-12-2012-0063
Bakar, A., Lee, R., & Hashim, H. N. (2013). Parsing religiosity, guilt and materialism on consumer ethics. Journal of Islamic Marketing, 4(3), 232–244. http://www.emeraldinsight.com/doi/abs/10.1108/JIMA-04-2012-0018
Barriball, K. L., & While, A. (1994). Collecting Data using a semi?structured interview: a discussion paper. Journal of Advanced Nursing, 19(2), 328–335.
http://onlinelibrary.wiley.com/doi/10.1111/j.1365-2648.1994.tb01088.x/abstract
Belk, R. W. (1985). Materialism: Trait Aspects of Living in the Material World. Journal of Consumer Research, 12(3), 265–280.
http://jcr.oxfordjournals.org/content/12/3/265.abstract
Burroughs, J. E., & Rindfleisch, A. (2002). Materialism and Well-Being: A Conflicting Values Perspective. Journal of Consumer Research, 29(3), 348–370.
https://academic.oup.com/jcr/article-lookup/doi/10.1086/344429
Chong, B. S., & Liu, M.-H. (2009). Islamic banking: Interest-free or interest-based? Pacific-Basin Finance Journal, 17(1), 125–144.
http://www.sciencedirect.com/science/article/pii/S0927538X08000036
Cynamon, B. Z., & Fazzari, S. M. (2008). Household Debt in the Consumer Age?: Source of Growth — Risk of Collapse. Capitalism and Society 3, 3(2), 1–30.
http://www.degruyter.com/view/j/cas.2008.3.2/cas.2008.3.2.1037/cas.2008.3.2.1037.xml
Dubois, H., & Anderson, R. (2010). Managing household debts?: Social service provision in the EU. In Working paper.
https://scholar.google.com.my/scholar?hl=en&q=Managing+household+debts%3A+social+service+provision+in+the+EU.&btnG=&as_sdt=1%2C5&as_sdtp=
Dusuki, A. W., & Abdullah, N. I. (2007). Maqasid al-Shariah, Maslahah, and Corporate Social Responsibility. The American Journal of Islamic Social Sciences, 24(1), 25–45. http://www.ncbi.nlm.nih.gov/pubmed/20304693
Eckersley, R. (2006). Is modern Western culture a health hazard? International Journal of Epidemiology, 35(2), 252–258. https://oup.silverchair-
cdn.com/oup/backfile/Content_public/Journal/ije/35/2/10.1093/ije/dyi235/2/dyi235.pdf?Expires=1497935760&Signature=RnlTjIpGc8Gf9q~U~FXkBD9oEIlKxjavZ89tIUsrGJ43KfCutKonjiEzgSP~2HOA1Rkp5OSkPH8xX22-6MkrGH74mQz6z-ZbHOqswtx4EFHwU7z2Pvb~0
Fan, J. X. (2000). Linking consumer debt and consumer expenditures: Do borrowers spend money differently? Family and Consumer Sciences Research Journal, 28(3), 358–401. http://onlinelibrary.wiley.com/doi/10.1177/1077727X00283004/abstract
Farooq, M. O. (2015). Islamic finance and debt culture: treading the conventional path? International Journal of Social Economics, 42(12), 1168–1195.
http://www.emeraldinsight.com/doi/abs/10.1108/IJSE-09-2013-0197
Gardarsdóttir, R. B., & Dittmar, H. (2012). The relationship of materialism to debt and financial well-being: The case of Iceland’s perceived prosperity. Journal of Economic Psychology, 33(3), 471–481. https://doi.org/10.1016/j.joep.2011.12.008
Haron, S, & Hisham, B. (2003). Wealth mobilization by Islamic banks: the Malaysian case. In In International Seminar on Islamic Wealth Creation, University of Durham, Durham. http://scholar.google.com.my/scholar?q=haron+and+hisham+wealth+mobilization+by+islamic+banks&btnG=&hl=en&as_sdt=0%2C5#0
Haron, Sudin, Ahmad, N., & Planisek, S. L. (1994). Bank Patronage Factors of Muslim and Non-Muslim Customers. International Journal of Bank Marketing, 12(1), 32–40. http://dx.doi.org/10.1108/02652329410049599
Hess, D. (2012). The impact of religiosity on personal financial decisions. Journal of Religion and Society, 14, 1–13. https://dspace.creighton.edu/xmlui/handle/10504/64313
Jappelli, T., & Pagano, M. (1989). Consumption and capital market imperfections: An international comparison. The American Economic Review, 79(5), 1088–1105. http://www.jstor.org/stable/1831438
Keng, K. A., Swinyard, W. R., & Yin, P. H. (2002). Quality of life in Singapore: an analysis of the influence of materialism and religiosity. ACR Asia-Pacific Advances. http://www.acrwebsite.org/volumes/11816/volumes/ap05/AP-05
Khraim, H. (2010). Measuring Religiosity in Consumer Research From an Islamic Perspective. Journal of Economic and Administrative Sciences, 26(1), 52–78.
http://www.emeraldinsight.com/doi/10.1108/10264116201000003
Mccleary, R. M. (2007). Salvation, Damnation, and Economic Incentives. Journal of Contemporary Religion, 22(1), 49–74.
http://www.tandfonline.com/doi/abs/10.1080/13537900601114503
Metawa, S. A., & Almossawi, M. (1998). Banking behavior of Islamic bank customers: perspectives and implications. International Journal of Bank Marketing, 16(7), 299–313. http://www.emeraldinsight.com/doi/abs/10.1108/02652329810246028
Moraru, M. (2012). Debt and religion: are religious people more debt averse and have high willingness to pay their debts off? [(Master’s thesis, University of Stavanger, Norway)]. https://brage.bibsys.no/xmlui/handle/11250/183950
Naqvi, S. (2016). Perspectives on Morality and Human Well-being: A Contribution to Islamic Economics. Kube Publishing Ltd.
http://scholar.google.com.my/scholar?q=naqvi+2003+Perspective+of+morality+and+human&btnG=&hl=en&as_sdt=0%2C5#0
Naser, K., Jamal, A., & Al-Khatib, K. (1999). Islamic banking: a study of customer satisfaction and preferences in Jordan. International Journal of Bank Marketing, 17(3), 135–151. http://www.emeraldinsight.com/doi/abs/10.1108/02652329910269275
Okumus, H. S. (2005). Interest-free banking in Turkey: A study of customer satisfaction and bank selection criteria. Journal of Economic Cooperation, 26(4), 51–86. http://library.sesrtcic.org/files/article/83.pdf
Rakrachakarn, V., Moschis, G. P., Ong, F. S., & Shannon, R. (2015). Materialism and life satisfaction: The role of religion. Journal of Religion and Health, 54(2), 413–426. http://dx.doi.org/10.1007/s10943-013-9794-y
Rosly, S., & Bakar, M. (2003). Performance of Islamic and mainstream banks in Malaysia. International Journal of Social Economics, 30(12), 1249–1265. http://www.emeraldinsight.com/journals.htm?articleid=847832&show=abstract
Siddiqui, S. H. (2001). Islamic Banking: True Modes of Financing. Eminent Pakistani Banker & Economist, 109(2), 1–12. http://nzibo.com/IB2/truemodes.pdf
Sipon, S., Othman, K., Ghani, Z. A., & Radzi, H. M. (2014). The Impact of Religiosity on Financial Debt and Debt Stress. Procedia - Social and Behavioral Sciences, 140, 300–306. http://dx.doi.org/10.1016/j.sbspro.2014.04.424
Stone, D. N., Wier, B., & Bryant, S. M. (2008). Reducing Materialism Through Financial Literacy: Certified Public Accountant. The CPA Journal, 78(2), 12–14. http://search.proquest.com.ezaccess.library.uitm.edu.my/docview/212266832/527B96743A53451DPQ/2?accountid=42518
Swinyard, W., Kau, A., & Phua, H. (2001). Happiness, materialism, and religious experience in the US and Singapore. Journal of Happiness Studies, 2(1), 13–32. http://link.springer.com/article/10.1023/A:1011596515474
Taheri, B., & Taheri, B. (2017). Emotional connection, materialism, and religiosity: An Islamic tourism experience. Journal of Travel & Tourism Marketing, 33(7), 1011–1027. http://www.tandfonline.com/doi/abs/10.1080/10548408.2015.1078761
Tyler, A. (2008). Islam, the West, and tolerance: conceiving coexistence. Springer. https://books.google.com.my/books?hl=en&lr=&id=ob7IAAAAQBAJ&oi=fnd&pg=PP1&dq=Islam,+the+West,+and+tolerance:+conceiving+coexistence&ots=wy89ww2B4W&sig=Bhhdrg77lCvhzN1XUaaq1U8UPOA
Watson, J. J. (2003). The relationship of materialism to spending tendencies, saving, and debt. Journal of Economic Psychology, 24, 723–739.
http://dx.doi.org/10.1016/j.joep.2003.06.001
Worldbank. (2016). Only 20% of Muslims access financial services, says World Bank. Vanguard News. http://www.vanguardngr.com/2016/10/20-muslims-access-financial-services-says-world-bank/
Yeniaras, V. (2016). Unpacking the relationship between materialism, status consumption and attitude to debt: The role of Islamic religiosity. Journal of Islamic Marketing, 7(2), 232–247. https://doi.org/10.1108/JIMA-03-2015-0021
Zainuddin, Y., Jahyd, N., & Ramayah, T. (2004). Perception of Islamic banking: does it differ among users and non-users. Jurnal Manajemen Dan Bisnis, 6(2), 135–149.
Zinman, J. (2014). HOUSEHOLD DEBT: FACTS, PUZZLES, THEORIES, AND POLICIES (NBER Working Paper No. 20496). http://dx.doi.org/10.1146/annurev-economics-080614-115640