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Constant Market Share Analysis of the Competitiveness of Islamic Car Financing and Conventional Car Loan in Malaysia

  • Ahmad Razi Abu Talib Khan
  • Jasmani Bidin
  • Mohd Aisha Nuddin Abdul Jalil
  • Anas Fathul Ariffin
Conference paper

Abstract

The financial services provided by the banking sector play a vital role in business activities in Malaysia. Motor vehicle financing is one of the products being offered to the public. Due to the publics’ positive perception or belief in Islamic banking operation, a large number of conventional banks offer the Islamic system of loan. Therefore, the specific objective of this paper is to determine the performance or competitiveness of Islamic car financing compared to conventional car loan, namely, hire purchase, in Malaysia. The constant market share analysis (CMSA) is adapted to decompose the change in loan into two aspects, namely, the competitive effect and the growth effect. The secondary data of car loans from 2011 to 2014 are used in the study. The findings show that Islamic car financing is becoming more competitive and expected to surpass the amount of conventional loans starting year 2018. However the growth effect for Islamic car financing is still lower.

Keywords

Constant market share competitiveness employment Job opportunities 

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Copyright information

© Springer Nature Singapore Pte Ltd. 2019

Authors and Affiliations

  • Ahmad Razi Abu Talib Khan
    • 1
  • Jasmani Bidin
    • 1
  • Mohd Aisha Nuddin Abdul Jalil
    • 1
  • Anas Fathul Ariffin
    • 1
  1. 1.Universiti Teknologi MARA Cawangan PerlisArauMalaysia

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