DETERMINANTS OF TAKAFUL BUSINESS IN PAKISTAN AND MALAYSIA: AN EMPIRICAL ANALYSIS
A theoretical demand for Takaful business is observed in Malaysia and Pakistan as per the research of this study. This is evidence that the people of Malaysian and Pakistan have become financially more sophisticated and more determined to invest in a business that fulfills the requirement of Shariah laws. The ethical nature of the Islamic finance product Takaful is going to be more attractive to both Muslims and non-Muslims as well. It is prominent from this research that the potential demand for Takaful products is very good and the Takaful Industry is now becoming the rival competitor of conventional insurance. The Global Takaful business is smaller as compared to the conventional insurance business. Therefore the Islamic finance product Takaful needs to gain worldwide brand recognition and surpass the performance standard set by the conventional insurance business industry. It is nice to note that Takaful business operators are increasingly starting to realize that the ethical guidelines and transparency of their products underpin their offering appeal to potential individuals regardless the Muslim or non-Muslim discrimination. The Takaful business is becoming a fast-developing business and penetrating a stable development phase. In several Muslim countries, national regulators have enacted a Takaful framework for the Takaful insurance industry. Malaysia & Bahrain are leading examples among Muslim countries of having progressive Takaful regulation. In the last few years, Saudi Arabia & Pakistan have also established regulatory frameworks for Takaful business. It is very optimistic to note that the government of Bangladesh is actively considering enacting a separate Takaful Act also. This will certainly help to grow the emerging Takaful insurance industry round the globe.
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