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A Suggestion on Mortgage Financing of Islamic Banks: Diminishing Musharakah

Author

Listed:
  • Dinc, Yusuf

Abstract

Participation banks can produce house financing based on mortgage in Turkey. Mortgage of participation banks of Turkey is a type of Murabaha financing. Murabaha financing model is based on buying in advance and selling on credit terms. Other financing models of interest-free banking are not applied to mortgages of participation banks in Turkey. Diminishing Musharakah is an interest-free financing model for any type of credits and also applied to mortgages in the world. In this essay Diminishing Musharakah is argued as a unique financing model of interest-free banking. Also applicability of Diminishing Musharakah for Turkish participation banks’ mortgages is evaluated. The findings that were obtained in Turkey may be generalized for the other regions of the world.*

Suggested Citation

  • Dinc, Yusuf, 2016. "A Suggestion on Mortgage Financing of Islamic Banks: Diminishing Musharakah," MPRA Paper 85335, University Library of Munich, Germany, revised 07 Feb 2017.
    • Handle: RePEc:pra:mprapa:85335
    as

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    References listed on IDEAS

    as
    1. Zubair Hasan, 2008. "Credit Creation And Control: An Unresolved Issue In Islamic Banking "توليد" ومراقبة الائتمان: إشكال عالق لدى المصارف الإسلامية," Papers and books based on the proceedings of the Conferences organized by the Islamic Economics Institute, KAAU. 52, King Abdulaziz University, Islamic Economics Institute..
    2. Raza, Muhammad Wajid & Shah, Syed Farhan & Khurshid, Malik Rizwan, 2011. "Islamic Banking Controversies and Challenges," MPRA Paper 70623, University Library of Munich, Germany, revised Jan 2012.
    3. Hasan, Zubair, 2008. "Credit creation and control: an unresolved issue in Islamic banking," MPRA Paper 8130, University Library of Munich, Germany, revised 07 Apr 2008.
    4. Hasan, Zubair, 2005. "Islamic banking at the crossroads: theory versus practice," MPRA Paper 2821, University Library of Munich, Germany.
    5. Badev, Anton & Beck, Thorsten & Vado, Ligia & Walley, Simon, 2014. "Housing finance across countries : new data and analysis," Policy Research Working Paper Series 6756, The World Bank.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Diminishing musharakah; mortgage; Islamic banking; participation banking; Sukuk.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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