Micro-takaful scheme for the protection of houses belonging to low-income groups in Malaysia

Purpose – This study aims to assess the availability of micro-takaful (micro-Islamic insurance) schemes for the protection of houses belonging to low-income groups in Malaysia.

Design/methodology/approach – The study is conducted via desk research and interview discussions with representatives from takaful operators and key stakeholders.

Findings – Findings of the study confirm the importance of micro-takaful as a scheme for the protection of low income groups. Micro-takaful schemes in Malaysia are, however, skewed towards the protection of health, life and family. The study finds little industry interest in the provision of micro-takaful schemes for the protection of houses for low-income groups. This represents another important area that takaful operators should take into consideration in their planning.

Research limitations/implications – The paper will help the Majlis Agama Islam Negeri-Negeri (MAINs),the regulator, takaful operators and government agencies such as Jabatan Wakaf, Zakat dan Haji (JAWHAR) to generate awareness and promote the offering of micro-takaful schemes for the protection of houses belonging to low-income groups in Malaysia.

Practical implications – In light of the limited availability of micro-takaful schemes for the protection of houses for low-income groups, this study argues that takaful operators should offer and promote them.

Social implications – The study is significant for fulfilling the need of low-income groups in Malaysia to protect their houses in the event of catastrophes so that they will not suffer significant losses. Rather, micro-takaful will assist them in improving their standard of living.

Originality/value – This study promotes the idea that it is essential to facilitate the low-income groups with appropriate coverage made available to them; micro-takaful schemes in protecting their houses and home contents, should any defined calamities occur. The outcomes are necessary for further development of micro-takaful models, specifically for the protection of properties. The developed model shall be proposed for application in the Malaysian takaful and housing industry to facilitate low-income groups to obtain protection for their household and home contents.