Personal Finance Product Using the Bai-Salam Contract as a Financing Tool (As Conducted By Islamic Banks): A Jurisprudential Study

Abstract

The aim of this research is to clarify the personal finance mechanism and the contract system that comprises it, and to describe the Shariah ruling for employing this product in Islamic banks based on the Bai-Salam contract. The nature of this research necessitated the use of the inductive method to track the components of the product to reach a total or majority judgment on the product, and to rely on the analytical method of interpretation, criticism, comparison and deduction to reach the jurisprudential description of the phenomenon. The findings of the research showed that the personal finance product is novel and has been developed by Islamic banking jurists so that it can be activated depending on the Bai-Salam contract. It consists – as a product – of a system of contracts and not of a single contract. It can also provide the necessary liquidity to the client who requests financing without resorting to usury. The findings also showed that personal finance is a product that was invented to be an alternative to lending or borrowing with interest (usury). Through personal finance, a person can be provided with the necessary liquidity to meet his personal needs without resorting to usury.