THE URGENCY OF STRENGTHENING THE REGULATION AND THE IMPLEMENTATION OF MUSHARAKA MUTANAQISHAH FINANCING ON ISLAMIC BANKING IN INDONESIA
AL GHOZALI, FALAH
MetadataShow full item record
MusharakaMutanaqishah financing (MMQ) is a financing partnership based on the principles of Musharaka or syirkah, with the characteristics of assets ownership or capital of one of the parties (syarik) continue to decline gradually due to purchases made by the other parties.MusharakaMutanaqishah financing is relatively new. It has many advantages over other types of financing schemes. However, the regulation and its implementation in Indonesia are still not optimum. The paper aims to analyze the weaknesses of the regulation and the implementation of MusharakaMutanaqishah financing in Indonesia. The result shows that there are some weaknesses of the regulation related to the MMQ financing, as follows: First, the regulation governing MMQ needs to be completed by the government. Second, in term of language, the regulation should follow the principle of legal drafting. Third, in some ways, there are conflicts of law in the regulation of MMQ in Indonesia. Fourth, MMQ financing is only regulated in the Fatwa of National Sharia Board, Indonesian Ulema Council (MUI). Furthermore, the implementation of MMQ financing in Indonesia has not been ideal yet, since some criteria cannot be reached, namely: First, not all Islamic Banking offers MMQ financing products. Second, the interest of customers to MMQ financing is still low. Third, the implementation of MMQ financing cannot contribute in the improvement of the social-economy productivity. MMQ Financing can be optimally realized with some strategic steps, i.e: amendment of MMQ financing provision is needed and continued with dissemination to the public and stakeholders. The government should strengthen the Sharia Banking capital by allocating in the state budget. Last but not least, the spirit (ghîrah) from Muslims to do the Islamic teachings as a whole (kâfah), freeing themselves from the usury system in their economic activities.