scholarly journals The Effect of Riba Avoidance and Product Knowledge on the Decision to Become a Customer of Islamic Banks

2021 ◽  
Vol 04 (08) ◽  
Author(s):  
Siti Musyahidah ◽  
Keyword(s):  
Quantitative Method ◽  
Product Knowledge ◽  
Islamic Banks ◽  
Avoidance Motivation ◽  
Sufficient Knowledge ◽  
Islamic Bank ◽  
The Impact

The objective of this study is to find out the impact of riba avoidance motivation and product knowledge towards decision to be Islamic banks customers. Previous studies found that Muslim societies chose Islamic banks because they are interest-free. However, other studies also found that most Islamic banks customers do not have sufficient knowledge about Islamic bank products. Using the quantitative method, this study surveyed the effect of riba avoidance and product knowledge towards intention becoming Islamic bank costumers. There were thirty respondents who were chosen accidentally. Questions were distributed manually to the Islamic banks' customers. Our study found that riba avoidance and product knowledge significantly affect the decision to become a customer of Islamic banks in Palu City. This is proven by the sig-F value of 0.000, which is smaller than Alpha 0.05. At the same time, partially, the motivation to riba avoidance and product knowledge has a significant effect on the decision to become a customer of Islamic banks. Our findings highlight that Islamic banks should focus on providing more free riba products to attract more Muslim customers. In addition, customers' knowledge of Islamic banks' products should also become the banks' focus for improvement.

scholarly journals The antecedents of Muslim customers’ intention to invest in an Islamic bank’s term deposits: evidence from a Muslim majority country

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sri Rahayu Hijrah Hati ◽  
Sigit Sulistiyo Wibowo ◽  
Anya Safira
Keyword(s):  
Perceived Risk ◽  
Online Survey ◽  
Perceived Value ◽  
Perceived Quality ◽  
Equation Modeling ◽  
Product Knowledge ◽  
Islamic Banks ◽  
Content Type ◽  
Islamic Bank

Purpose The purpose of this study is to examine the impacts of product knowledge, perceived quality, perceived risk and perceived value on customers’ intention to invest in Islamic Banks. This study specifically examines an Islamic bank’s term deposits. Design/methodology/approach Structural equation modeling was used to analyze the data collected from 217 customers of an Islamic bank in Indonesia using an online survey. Findings This study highlights the central and dual roles of perceived risk as both the independent and the intervening variable that mediates the relationship between product knowledge and Muslim customer intention to invest in an Islamic bank’s term deposits. Research limitations/implications This study only investigates term deposits as one type of investment in Islamic banks. This study contributes to the literature by examining the role of product knowledge, perceived quality, perceived risk and perceived value on Muslim customer intention to invest in Islamic term deposits. Practical implications The results of this study highlight the requirement for Islamic banks to educate customers to improve the depositors’ product knowledge because Muslim customers’ risk and value perception and intention are strongly influenced by product knowledge. Originality/value The investigation of perceived risk is particularly relevant for Islamic financial products because of the inherent nature of risk sharing in Islamic finance. This study investigates the role of product knowledge in influencing the Muslim customers’ perception of risk, quality, value and their intention to invest in Islamic bank term deposits. Ideally, the profit loss sharing concept (PLS) should be applied; however, in this context, revenue sharing is applied because of Indonesia’s central bank regulation.

The consumers’ commitment and materialism on Islamic banking: the role of religiosity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Junaidi Junaidi ◽  
Ready Wicaksono ◽  
Hamka Hamka
Keyword(s):  
Structural Equation ◽  
Survey Study ◽  
Equation Modeling ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Positive Effects ◽  
Islamic Bank ◽  
Muslim People ◽  
The Impact

Purpose This paper aims to investigate whether and how religiosity (e.g. extrinsic and intrinsic) influences the mediator variables (consumers’ commitment and materialism) in the Islamic bank consumers context. It also examines how the mediators should be influence consumers’ preferences. Design/methodology/approach In total, 658 Muslim people and Islamic bank consumers were recruited for a survey study and structural equation modeling was used to test the research hypotheses. Findings The empirical results indicate that religiosity (e.g. extrinsic and intrinsic) has significant and positive effects on consumers’ commitment and materialism, whereas intrinsic religiosity has no significant effect on consumers’ commitment which subsequently influences consumers’ preference. Furthermore, mediator variables (e.g. consumers’ commitment and consumers’ materialism) have partial mediators between religiosity and consumers’ preferences. Research limitations/implications The current study was limited to Indonesian Muslim people; there is a future need to study consumers’ attitudes and engagement in religious products and services (e.g. Islamic brands). It is can help practitioners, regulators and researchers to observe the dynamic behavior to elaborate on the impact of religion and Islamic products on consumers’ preference. Practical implications The bank managers and regulators should enhance the information of products and services Islamic banks and the difference principle between conventional banks. Moreover, enlighten the consumers about the principle operation of Islamic banks from the perspective of marketing and religiosity. Originality/value This study contributes to consumers’ behavior literature and, specifically, for the decision-making process through developing and testing a model of religious determinants toward Islamic bank products, as well as offers new insights into the determinants of religion and consumers’ decision process toward Islamic banking.

scholarly journals The Role of Islamic Banks in the Development of the Jordanian Economy-"Exploratory Study on Arab Islamic Bank"

2016 ◽  
Vol 8 (4) ◽  
pp. 131
Author(s):  
Bader Mustafa Al-Sharif
Keyword(s):  
Agricultural Sector ◽  
Negative Impact ◽  
Industrial Sector ◽  
Customer Relationship ◽  
Islamic Banks ◽  
Islamic Bank ◽  
Medium Level ◽  
Study Population ◽  
The Impact

This study aimed to identify the role of Islamic banks in the development of the Jordanian economy. The study population consisted of public administration and branches of the Arab Islamic Bank. The study sample consisted of (85) customer relationship officers and (30) corporate service officers with a total (115) questionnaires distributed on all respondents. Descriptive approach of means and standard deviation was used; also Simple Regression was used to measure the impact of the role of Islamic banks in the development of the Jordanian economy.Among the most important findings of the study that Islamic banks have a medium level role in the development of the Jordanian economy and the development of the industrial sector, and it was clear that at Islamic banks have low level role with negative impact on the development of agricultural sector. The findings have also revealed that Islamic banks develop the construction sector at a high level.The study recommended the need to overcome the problems faced by agricultural and industrial entrepreneurs by Islamic banks in order to get farmers and manufacturers to get the funds necessary for them as this raises the level of development of the Jordanian economy.

scholarly journals Examining Factors Influencing Customer Intention to Use Islamic Home Financing: A Study in UTM

2018 ◽  
pp. 648-653
Keyword(s):  
Theory Of Reasoned Action ◽  
Reasoned Action ◽  
Subjective Norms ◽  
Intention To Use ◽  
Product Knowledge ◽  
Islamic Banks ◽  
Determinant Factors ◽  
Islamic Bank ◽  
Factors Influencing ◽  
Religious Obligation

Islamic home financing is a kind of product offered by Islamic banks, which is based on the principle of Sharia. Using the Theory of Reasoned Action (TRA) as basis, this study examine factors that influence customers intention in using Islamic home financing. 342 usable surveys are obtained from Islamic bank customers which are the staff in UTM. There are six determinant factors which are attitudes, subjective norms, religious obligation, price and product knowledge were tested. The outcomes show that attitude, religious obligation and product knowledge significantly influenced customers’ intention to use Islamic home financing while price and subjective norms are not significant. The results would help bankers to improving the strategies about the factors that they need the effective market Islamic home financing products in order to be more competitive and known to customers.

ShariahSupervisory Board Report (SSBR) in Islamic banks

2018 ◽  
Vol 11 (2) ◽  
pp. 274-296 ◽  
Author(s):  
Abdul Rafay ◽  
Saqib Farid
Keyword(s):  
Impression Management ◽  
Supervisory Board ◽  
Investor Behavior ◽  
Islamic Banks ◽  
Content Type ◽  
Islamic Bank ◽  
Belief Adjustment ◽  
The Impact ◽  
First Time ◽  
Practical Implications

PurposeThe primary purpose of this study is to determine the impact of information ordering inShariahSupervisory Board Report (SSBR) on investors’ behavior and perception about the performance of Islamic bank in terms ofShariahcompliance and other conventional parameters.Design/methodology/approachThe study used the belief adjustment model to evaluate the desired effects of ordering positive and negative information (if any) in SSBR of an Islamic bank. This study extends the previous literature on information ordering as a pioneer experimental study in emerging economies.FindingsEvidence shows that investors and technical users of performance reports consider SSBR as significant for financial and investment decisions from the Islamic perspective. The results indicate that the primacy effect does exist and is statistically significant.Practical implicationsThe SSBR provides the management with an excellent opportunity to communicate and convince the investors aboutShariahcompliance features of an Islamic bank. Additionally, it also highlights the functional use of impression management to manipulate the investor’ behavior and perception.Originality/valueFor the first time, this study specifically investigates the effect of conscious information ordering in SSBR of Islamic banks on investors perceptions and behaviors.

Ownership structure and financial performance in Islamic banks

2014 ◽  
Vol 7 (2) ◽  
pp. 146-160 ◽  
Author(s):  
Sarra Ben Slama Zouari ◽  
Neila Boulila Taktak
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Empirical Evidence ◽  
Ownership Structure ◽  
Policy Implications ◽  
Bank Performance ◽  
Islamic Banks ◽  
Content Type ◽  
Islamic Bank ◽  
The Impact

Purpose – This study aims to investigate empirically the relationship between ownership structure (concentration and mix) and Islamic bank performance, with a special attention to the identity of the block investor (foreign, family, institutional and state). Design/methodology/approach – Regression analyses are conducted to test the impact of the identity of the first shareholders and the degree of concentration on Islamic bank performance, using a panel data sample of 53 Islamic banks scattered over > 15 countries from 2005 to 2009. Findings – Results suggest that ownership is concentrated at 49 per cent, and for 41 banks from the full sample, the ultimate owner is institutional. State investors come in second place, followed by family ultimate shareholders. Using return on assets and return on equity as performance measures, empirical evidence highlights the absence of correlation between ownership concentration and Islamic bank performance. It also reveals that the combined effort of family and state investors is beneficial to bank performance. Results also indicate that banks with institutional and foreign shareholders do not perform better. Empirical findings suggest that the financial crisis impacts negatively Islamic bank performance. Research limitations/implications – The use of dummy variables to measure the nature of the largest owner represents the main limitation of this study. This is due to the lack of information, as the percentage of the largest capital held referring to owner category was available only for some banks. Practical implications – This research has given a brighter insight into corporate governance and bank performance in selected Islamic banking institutions. Findings provided useful information to bank managers, investors and policy makers. Financial performance can be improved by identifying practices associated with ownership structure. So, it will have policy implications for Islamic banks as to how to improve their performance. Finally, different types of bank ownership have had different concerns about implementing corporate governance practices among Islamic banks. Originality/value – This work is the first of its kind for Islamic banks. It extends previous research by examining whether ownership structure (concentration and mix) affects performance. It also fills the gap in the literature by providing empirical evidence on a large sample involving data from 15 countries. Finally, manual data collection on ownership structure constitutes a large part of the research for this paper.

scholarly journals ISLAMIC REGULATIONS AND ISLAMIC BANKS MARGINS: AN EMPIRICAL INVESTIGATION INTO ASEAN COUNTRIES

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Fatin Nur Hidayah Taib Khan ◽  
Nurhafiza Abdul Kader Malim ◽  
Tajul Ariffin Masron
Keyword(s):  
Supervisory Board ◽  
Regulatory Framework ◽  
Policy Implications ◽  
Islamic Banks ◽  
Islamic Bank ◽  
Bank Managers ◽  
Asean Countries ◽  
The Cost ◽  
The Impact ◽  
Effect Method

This paper examines the impact of Islamic regulations on Islamic bank margins in ASEAN countries, utilising the fixed-effect method. The sample consists of 27 Islamic banks in Malaysia, Indonesia, Singapore and Thailand covering the period 2009 to 2017. The results suggest that Islamic regulations, such as the Islamic regulatory framework and Shari’ah supervisory board, are negatively associated with Islamic bank margins. These results have important policy implications for regulators, indicating that they should impose a separate regulatory framework for Islamic banks and bank managers to increase the number of Shari’ah scholars on the Shari’ah board in lowering Islamic bank margins. Overall, the findings suggest that Islamic banks should adopt regulations that should follow Shari’ah requirements, as they help to lower the cost of financial intermediation. As for the other control variables, only the Lerner index has a positive and significant impact on ASEAN Islamic bank's margin. Therefore, appropriate policies are necessary to foster competition in Islamic banks.

scholarly journals The Impact of Various Mode of Financings in Reducing Inequality in Various Groups of Countries

2021 ◽  
Vol 3 (2) ◽  
pp. 25-43
Author(s):  
Irma Yuliani ◽  
Muhammad Abdul Rohman
Keyword(s):  
World Bank ◽  
Low Income ◽  
Positive Impact ◽  
Low Income Countries ◽  
Islamic Banks ◽  
Middle Income ◽  
Middle Income Countries ◽  
Islamic Bank ◽  
The Impact ◽  
Positive Effect

The existence of Islamic bank not always provide positive impact to the real sector of economy. Declining inequality is one of the expected significant impacts with appyling mode of financing as instrument to relize that. This study aims to investigate the impact of mode of financing was applied by Islamic bank to reduce inequality among countries of IsDB Group. World bank data and IDB data of Islamic banks are employed as samples from 1977 to 2018. The results show that equity and leasing have a positive effect and significant to reduce inequality for low income countries, where the leasing or ijarah have the most effective impact than all. In addition, instalment sale of financing has a significant impact to reduce inequality for middle-income countries, loan is being the only significant mode of financing to reduce inequality in all IDB countries. Unfortunately, Mudharabah, PLS (profit and loss sharing), Murabahan and Istishna have not significantly impact to reduce inequality

scholarly journals THE IMPACT OF IJARAH/LEASE FINANCING ON MALAYSIAN ISLAMIC BANK PERFORMANCE

2021 ◽  
Vol 16 (1) ◽  
pp. 49-58
Author(s):  
Mohamud Said Yusuf ◽  
Mohamad Yazid Isa
Keyword(s):  
Random Effect ◽  
Consumer Price Index ◽  
Operating Efficiency ◽  
Bank Performance ◽  
Islamic Banks ◽  
Islamic Bank ◽  
Lease Contract ◽  
Banking Institutions ◽  
Asset Creation ◽  
The Impact

Ijarah (lease contract) is one of the essential financing contracts offered by Islamic banking institutions to meet the demand of the clients. This study investigates the impact of Ijarah financing on Islamic bank performance in Malaysia for the period from 2004-2018 using Fixed and Random Effect Models. Ijarah financing (IJFA) which becomes the focus variable of this study with other six independent variables; operating efficiency (EXTA), bank size (LTA), total financing (TFTA), base rate (BR), consumer price index (CPI) and gross domestic product (GDP) were regressed against return on asset (ROA) and net profit margin (NPM). The results show that Ijarah financing has a positive and significant impact on NPM. The findings suggest that Islamic banks should increase their portfolio of Ijarah financing and this is also support the concentration strategy used by banks in improving Islamic bank performances. An increase in demand for Ijarah financing will increase Islamic banks performance and this reflects that Ijarah financing as an asset creation tool that banks prefer particularly for generating income.

scholarly journals The Impact THE IMPACT OF EMPLOYEE SATISFACTION ON CUSTOMER SERVICE QUALITY IN ISLAMIC BANK

2020 ◽  
Vol 5 (2) ◽  
pp. 53-64
Author(s):  
Alfalisyado Alfalisyado
Keyword(s):  
Service Quality ◽  
Customer Service ◽  
Employee Satisfaction ◽  
Islamic Banks ◽  
Islamic Bank ◽  
The Subject ◽  
The Impact

The aim of this study is to examine the impact of employee satisfaction on customer service quality. The subject of this research is Islamic banks in Indonesia with two variables are employee satisfaction and customer service quality. The results of this study is shown that there is a relationship between employee satisfaction and customer service quality. The degree of influence of employee satisfaction to customer service quality is 13.1% which mean there are many variables can be determined for the next research.

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