Protection of Housing and Home Contents: The Understanding and Application of Microtakaful Scheme in Malaysia

Exclusively, for the needy and poor, microtakaful offers a Shariah compliance protection scheme designated for low-income groups with financial constraints and incapability. It is significant especially for the low-income groups to acquire appropriate protection against risks. This is due to the fact that their household income is below the poverty line and in general hardly capable to provide protection for their well-being. Without adequate protection could mean that they will suffer from a bigger loss and poverty. In the event of a calamity, the low-income groups especially will lose their properties and given that they are already poor their standard of living would decline. Existing literature reviews include the understanding of microtakaful, its working concept as well as application merely within the family and life protection schemes in Malaysia. However, scarce literature is available on microtakaful properties focusing on the protection of housing and home contents. As such little is known about the understanding, working concept of microtakaful and its application specifically to protect housing and home contents in Malaysia. This study endeavours to unveil the concepts and application of microtakaful among the low-income groups for the protection of houses and home contents in Malaysia. The study combines reviews of literature and interviews with 40 respondents from the low-income groups identified in Malaysia. Findings from the study suggested that i) the majority of the low-income groups do not procure any protection plan be it conventional or microtakaful in protecting their houses and home contents; ii) the reasons include a lack of input and knowledge on microtakaful in which they have limited awareness on the availability of the protection scheme with reasonable contribution amount, iii) majority of the low-income groups are interested to see microtakaful to be applied widely and will consider procuring microtakaful for their protection of houses and home contents. The outcome of the study suggests that more inputs and further marketing of microtakaful specifically for the protection of housing and home contents among the low-income groups are required to educate and promote microtakaful to be applied in Malaysia.