Barriers to Takaful Participation: Socio-Economic Insights from Mosque Committee Members in Peninsular Malaysia

This study investigates the socio-economic barriers that hinder Takaful participation among mosque committee members in Malaysia. As respected community leaders, mosque committee members play a crucial role in shaping public perceptions of financial practices. Despite the rapid growth of the Takaful industry in Malaysia, penetration rates remain below expectations, particularly among lower-income and rural groups. This research examines the obstacles to subscribing to Takaful, using semi-structured interviews with committee members from selected mosques. The findings reveal five recurring barriers: (1) affordability and income constraints, (2) age-related eligibility issues, (3) reliance on family support, (4) mistrust of agents and digital platforms, and (5) economic instability leading to policy discontinuation. Even though there is religious motivation and knowledge of Shariah compliance, these socio-economic barriers are more important than the perceived benefits of uptake. This study contributes to the existing literature by highlighting the interplay among financial literacy, socioeconomic vulnerability, and religious leadership in promoting financial inclusion. Suggested policy implications include subsidized community-based Takaful programs, enhanced financial literacy initiatives through mosques, and improved consumer protection systems to restore confidence in Takaful operators.