Murabahah is an Islamic financial tool of a purchase and a sale of an asset where the purchase price, selling price and profit margin must be clearly made transparent between the seller and the purchaser. The evaluation process for selecting successful credit worthy applicants is crucial to mitigating risks against probable payment default in the future where such risk can fall under a credit risk taxonomy. Payment default under Murabahah financing has become an increasing concern for Islamic banks due to the potential inability of the respective banks to impose additional charges post execution of Murabahah contract. Hence, an effective evaluation technique in minimizing the default risks is essential. The assessment of applications is usually made by human and subjective evaluation will be involved due to different and varying levels of knowledge, experience and confidence of the evaluators. This justifies a fuzzy method as a suitable approach to be adopted. In this paper, a Fuzzy Inferior Ratio (FIR) procedure using generalized fuzzy numbers is proposed to be used for such evaluation of Murabahah applications. The level of confidence of the evaluators shall be represented in the form of generalized fuzzy numbers, and the compromise solution by FIR will be offered. The existing FIR and the modified FIR are compared with and analyzed to determine consistency of the ranking of the applicants. The proposed method has an advantage over the original FIR as the former does incorporate the element of the confidence level of the decision makers in the calculation to determine the rank of the successful applicants whereas the latter may not.
Skip Nav Destination
Article navigation
6 October 2020
PROCEEDINGS OF THE 27TH NATIONAL SYMPOSIUM ON MATHEMATICAL SCIENCES (SKSM27)
26–27 November 2019
Bangi, Malaysia
Research Article|
October 06 2020
A ranking procedure of Murabahah applications using fuzzy inferior ratio with generalized fuzzy numbers
Sharifah Aniza Sayed Ahmad;
Sharifah Aniza Sayed Ahmad
a)
1
Faculty of Computer and Mathematical Sciences, Universiti Teknologi MARA
, 40450 Shah Alam, Selangor, Malaysia
a)Corresponding author: [email protected],
Search for other works by this author on:
Daud Mohamad;
Daud Mohamad
b)
2
Faculty of Computer and Mathematical Sciences, Universiti Teknologi MARA
, 40450 Shah Alam, Selangor, Malaysia
Search for other works by this author on:
Nurul Iffah Azman
Nurul Iffah Azman
c)
3
Faculty of Computer and Mathematical Sciences, Universiti Teknologi MARA
, 40450 Shah Alam, Selangor, Malaysia
Search for other works by this author on:
AIP Conf. Proc. 2266, 050015 (2020)
Citation
Sharifah Aniza Sayed Ahmad, Daud Mohamad, Nurul Iffah Azman; A ranking procedure of Murabahah applications using fuzzy inferior ratio with generalized fuzzy numbers. AIP Conf. Proc. 6 October 2020; 2266 (1): 050015. https://doi.org/10.1063/5.0018457
Download citation file:
225
Views
Citing articles via
Inkjet- and flextrail-printing of silicon polymer-based inks for local passivating contacts
Zohreh Kiaee, Andreas Lösel, et al.
Effect of coupling agent type on the self-cleaning and anti-reflective behaviour of advance nanocoating for PV panels application
Taha Tareq Mohammed, Hadia Kadhim Judran, et al.
Design of a 100 MW solar power plant on wetland in Bangladesh
Apu Kowsar, Sumon Chandra Debnath, et al.
Related Content
Mathematical model in Islamic mortgage financing with murabahah and musharakah mutanaqisah contracts
AIP Conf. Proc. (December 2022)
Designing mathematics’ tasks to promote students’ Islamic financial literacy
AIP Conf. Proc. (April 2024)
Estimation of the contraction type effect on delayed repayments (Case study: Melli Bank in Semnan Province)
AIP Conference Proceedings (July 2018)
Testing inferior colliculus neurons for selectivity to the rate or duration of frequency modulated sweeps
AIP Conference Proceedings (May 2018)
Modeling commodity salam contract between two parties for discrete and continuous time series
AIP Conference Proceedings (August 2017)