Rating BBA and MMP in their Stages of Product Development Based on Maqasid Framework

Home is a basic need. Islamic banks have been offering Bay Bithaman Ajil (BBA) facility for home financing. BBA has been criticized as mimicking the conventional debt based structure and it does not fulfill the objectives of Shari'ah (al-Maqasid). The literature suggests Musharakah Mutanaqisah (MMP) home financing facility as a better alternative to BBA because the former complies with al-Maqasid in form and spirit. Most of the studies on these issues have been perceptive in nature, through surveys. They do not get to the bottom of the problem. For example, at what stage in the development of the two products is al-Maqasid violated? Which stage achieves higher level of al-Maqasid relative to the other stages? How can we empirically prove that MMP achieves higher level of al-Maqasid than BBA? The present study adopts AHP to answer these pertinent research questions. The Goal is to rank the stages of developing the two Islamic banking products relative to al-Maqasid. The criteria are the four (4) stages used in the development of Islamic banking products, the subcriteria are the five elements of al-Maqasid, and the alternatives are the two Islamic home financing products. The results of this study show that MMP conforms to al-Maqasid more than BBA. The study has concluded with suggestions for future research.