Implementation of Islamic Elements as a Parameter for Credit Evaluation Process: Exploring Shariah Adviser’s Perceptions

The aim of the study is to explore the Shariah adviser’s perceptions on credit evaluation process in commercial financing activities in Islamic banks. To achieve this aim, the study conducts in-depth interviews as to identify the Five C’s and CAMPARI elements in credit evaluation process, Adl’, Ukhwah, Istiqamah, Akhlak, Syura and Tawakkal elements in credit evaluation process, Daruriyyah and Hajiyyah in credit evaluation process and lastly is exploring the credit management (during and after the lifetime). The study found that any development to strengthen credit risk is always welcome. As already mentioned, the parameter provides the value add mechanism in achieving a thorough financing evaluation process. However, Islamic banks must be mindful that moving forward, the financing or credit officers must have the necessary skills and experience to handle the proposed parameter and they have to be well trained. As a result, it is good to implement this parameter if the clients are ready to embrace this parameter and the bank personnel have the necessary experience and skills.