Latest news with #Syariah-compliant
Barnama
28-05-2025
- Business
- Barnama
- Young Malaysians, Big Money Mistakes: What's Going Wrong With Islamic Financial Behaviour?
Opinions on topical issues from thought leaders, columnists and editors. But here's the twist: despite this impressive progress, many Malaysians, especially the younger generation, still struggle when it comes to managing their money wisely and in line with Islamic principles. Malaysia has come a long way in promoting financial inclusion. With more than 96 per cent of adults now having access to formal financial services, up from just 46 per cent in 2011, the country is often praised as a model in Southeast Asia. Moreover, while insurance penetration in Malaysia has reached 40 per cent, family takaful participation lags at only 20 per cent, raising questions about why many Muslims hesitate to adopt Syariah-compliant financial products. Recent reports highlight the nation's inadequate retirement savings, with nearly half of Employees Provident Fund (EPF) members under 55 holding less than RM10,000 in their accounts. Rising living costs, slow wage growth, and limited financial literacy worsen the problem, leaving many individuals financially vulnerable despite broad financial inclusion. While Malaysia has made remarkable progress in expanding access to financial services, a worrying mismatch remains: many Malaysians, especially younger ones, face serious personal financial challenges. A recent study has peeled back the layers of this issue, focusing on university students in Malaysia, and uncovered some surprising truths about what really drives Islamic financial behaviour. It turns out that it's not just about knowing the rules of Islamic finance; confidence and family influence play a much bigger role than many of us might expect. These gaps point to a deeper need to understand and improve Islamic financial behaviour among Malaysia's young adults. Why Financial Literacy Alone Isn't Enough Conventional wisdom tells us that the more you know, the better you do. But this new research challenges that idea, at least when it comes to money. The study, which surveyed university students across different higher learning institutions, looked at how factors like Islamic financial literacy, parental financial socialisation, financial risk attitude, and financial self-efficacy shape financial habits. Surprisingly, Islamic financial literacy, the understanding of key Islamic finance concepts such as riba (interest), halal investments, and Syariah-compliant banking, wasn't the strongest predictor of good financial behaviour. 'This finding really caught us off guard,' said one of the researchers. 'We've always assumed that knowledge is power, but in this case, knowledge alone wasn't translating into action.' So, if simply knowing the dos and don'ts of Islamic finance isn't enough, what makes the real difference? The Big Impact of Parental Influence One of the standout findings was the power of parental financial socialisation. In simpler terms, how parents teach and model financial behaviour for their children. Students who reported that their parents regularly talked about money, showed them how to save, and demonstrated ethical financial habits were much more likely to manage their finances in ways that align with Islamic principles. 'This really reinforces the idea that financial habits are shaped at home,' the study noted. 'When parents openly discuss budgeting, saving, and responsible spending, they're not just passing on knowledge, they're instilling values and habits that stick.' Indeed, one student shared, 'My parents always taught me to avoid debt and to save for big purchases. I've carried those lessons with me, and they guide how I manage my money now.' The takeaway here is clear: if we want to raise a generation of financially responsible adults, it's crucial to start young, and that starts at home. Confidence is Key Another major finding of the study was the role of financial self-efficacy, that is, a person's belief in their ability to manage their own finances effectively. Students who felt confident about budgeting, saving, and making smart financial decisions were far more likely to actually do those things. This echoes what many financial planners have observed: confidence breeds action. 'When people believe they can handle their finances, they're more likely to take proactive steps, whether it's starting a savings plan or investing in halal financial products,' said one financial advisor familiar with the study's findings. Interestingly, this sense of self-efficacy appeared to have a stronger impact than even financial knowledge. 'It's not just what you know; it's whether you believe you can put that knowledge into practice,' the researchers explained. Risk Attitude: Less Important Than Expected The study also looked at financial risk attitude, which measures how willing someone is to take risks with their money. In the world of conventional finance, risk tolerance is often seen as a key driver of investment and spending behaviour. But in the Islamic finance context, where ethics, compliance, and risk-sharing are emphasised over speculative risk-taking, risk attitude played a much smaller role than expected. This makes sense when you consider that Islamic finance principles discourage high-risk speculation (gharar) and prohibit interest-based transactions (riba). As a result, ethical and religious considerations may outweigh personal risk preferences when it comes to making financial decisions. What Does This Mean for Malaysia's Financial Future? So, what can we learn from all of this? For one, financial education campaigns need to go beyond simply teaching the rules of Islamic finance. 'We have to focus on building students' confidence and involving their families in the process,' one of the researchers suggested. 'It's about creating a culture of good financial habits, not just delivering information.' There's also a role for universities and financial institutions. Offering workshops that involve both students and their parents could help reinforce positive financial behaviours. Likewise, programmes that focus on practical, hands-on financial skills, like how to set a budget or choose a Syariah-compliant investment, could help build that all-important financial self-efficacy. For policymakers, these findings offer a roadmap for improving financial inclusion in a way that's meaningful and sustainable. It's not enough to get people through the door of a bank or a takaful office; the goal should be to empower them with the skills and confidence they need to make sound financial decisions for life. The Bigger Picture At a time when many Malaysians are worried about their financial security, whether it's a lack of retirement savings or rising living costs, these insights couldn't come at a better moment. The study's findings highlight that while knowledge is essential, it is confidence and early family influence that often set the course for a lifetime of financial well-being. In the words of one student participant: 'I've attended financial literacy talks before, but what really helps is seeing my parents budget every month and learning to do it myself. That's what makes it real.' Ultimately, the message is clear: to foster better Islamic financial behaviour among young Malaysians, we need a combined effort, one that involves families, builds confidence, and offers not just knowledge, but the tools and mindset to act on it. -- BERNAMA Dr Mohd Faizuddin Muhammad Zuki ( is Senior Lecturer at the Islamic Business School, Universiti Utara Malaysia. Muhammad Arif Fadilah Ishak (ariffadilah@ is Lecturer at the Faculty of Quranic Science, UCYP University. Muhammad Hafiz Hassan (muhammadhafiz@ is Lecturer at the Faculty of Muamalat & Islamic Finance, Universiti Islam Antarabangsa Tuanku Syed Sirajuddin.
New Straits Times
13-05-2025
- Business
- New Straits Times
Investors seek probe into firm linked to RM80 million in losses
KUALA LUMPUR: A total of 232 investors are calling for a thorough investigation into a firm that ran a purported Islamic investment scheme, which chalked up at least RM80 million in losses. Malaysian International Humanitarian Organisation secretary-general Datuk Hishamuddin Hashim said the company also used the name of a well-known Syariah-compliant investment figure. He said, at first glance, the investment appeared "clean", and the involvement of the figure further boosted the confidence of victims. "The company used marketing agents to promote and offer the IRPS (Islamic Redeemable Preference Shares) scheme, which they claimed was Shariah-compliant. "They had Shariah compliance certificates and also submitted a document known as the Information Memorandum (IM) to the Securities Commission (SC)," he told reporters outside the Securities Commission Headquarters today. He said the problem was that many investors thought that the investment had been approved by the SC. Also present was Datuk Seri Mahadi Badrul Zaman, a marketing agent for the investment scheme, who claimed he was also a victim of the scheme. Mahadi claimed he suffered over RM20.7 million in losses after investing in the two companies involved. Hishamuddin said the investment companies misled investors using the Information Memorandum. "The submission of an Information Memorandum is only allowed for sophisticated investors — those with a net asset value of at least RM3 million and a minimum investment of RM250,000. "However, many of the complainants were retail investors, investing between RM50,000 and RM100,000 each. "This shows that the scheme was offered to parties who were not legally eligible under the Capital Markets and Services Act 2007 (Act 671)," he added. He said the memorandum submitted to the SC included a request to investigate the involvement of the investment figure, who is also a registered Shariah adviser for the company. MHO is also calling for investigations into possible false representation and misleading advertising with the intent to defraud investors. "This is a major case involving public interest. Among the victims are individuals from the oil and gas sector as well as prominent corporate figures. "We urge the SC to open an investigation paper and submit it to the Attorney-General's Chambers for prosecution of those behind the scheme," he said. It was reported early last year that Mahadi, husband to actress Heliza Helmi, had been included in the Securities Commission's (SC) investor alert list . Checks on the SC's website showed that his name and that of his company, AUF MBZ Consortium Plt, had been added to the investor alert list. Under the remarks column, the site stated that Mahadi's name was listed for "Carrying on unlicensed capital market activities of dealing in securities about the marketing of Unlisted Public Company shares". Social media was abuzz previously when actress Fathia Latiff claimed that Heliza's husband, who is better known as Mahadi BZ, had "cheated her". She had alleged that Mahadi had failed to complete a house that she bought five years ago.
New Straits Times
23-04-2025
- Business
- New Straits Times
Bank Rakyat unveils Akaun-i eGold for online gold trading
KUALA LUMPUR: Bank Rakyat has launched the Akaun-i eGold, a Syariah-compliant digital gold investment platform that enables customers to conveniently and securely buy and sell gold through the iRakyat online banking service. The account allows customers to invest in 999.9 fine gold, accredited by the London Bullion Market Association (LBMA), starting from as low as RM10. It also offers real-time buying and selling prices, along with the potential to enjoy more competitive spreads between purchase and selling prices. Customers also have the option to convert their digital gold balance in the Akaun-i eGold into physical gold, available in denominations from 0.5 grams up to 100 grams. The gold can be delivered directly to the customer's preferred address through a dedicated delivery service. Bank Rakyat in a statement said the launch of the new product reflects its ongoing commitment to helping customers diversify their financial portfolios by including gold as an alternative investment, or as a flexible and long-term savings solution. "Alongside improving access to gold ownership with a low entry point, this product supports the Bank's ongoing efforts to offer inclusive financial services. "It allows people from all walks of life to participate in gold transactions, buying, selling and converting digital investments into physical gold, to help them reach their financial goals with ease," it added. To start investing through Akaun-i eGold, customers must have a Bank Rakyat Current Account-i, Savings Account-i or Investment Account-i, along with access to iRakyat online banking.
