scholarly journals The Effect of Religiosity, Profit Los And Sharing on Consumer Trust and Intention to Financing in Islamic Bank

2022 ◽  
Vol 6 (2) ◽  
pp. 21
Author(s):  
Rizal Ula Ananta Fauzi ◽  
Arman Ahmad ◽  
Zaki Bahrun Niam ◽  
Izian Idris ◽  
Isabela Indah Puspita Ningrum
Keyword(s):  
Profit Sharing ◽  
Religious Community ◽  
Consumer Trust ◽  
Target Market ◽  
Mediating Role ◽  
Islamic Bank ◽  
Good Market ◽  
Bank Managers ◽  
Consumer Intentions ◽  
Conventional Banks

With a majority Muslim population, Indonesia has a good market share for Islamic banks. The existence of conventional banks becomes a competition to determine the strategy of Islamic bank managers. This study aimed to examine the effect of honesty and profit-sharing on trust mediation on consumer intentions. This study uses SPSS analysis and the Sobel test to see the role of mediation. Samples were taken as many as 384 respondents from the Muslim community. The analysis results obtained that religiosity significantly affects consumer trust and intentions. Profit and loss sharing significantly impacts confidence and does not affect consumer intentions. Trust can provide a significant mediating role. In terms of increasing the factors that influence consumer intentions, company managers must build consumer trust, the opportunity for a religious community to become a potential target market.

scholarly journals PENGARUH PRINSIP BAGI HASIL DAN BUNGA, DAN REPUTASI BANK TERHADAP KEPUTUSAN NASABAH DALAM MEMILIH JASA PERBANKAN: BANK SYARIAH DAN BANK KONVENSIONAL DI KOTA JAMBI

2019 ◽  
Vol 2 (2) ◽  
pp. 38-46
Author(s):  
Eka Julianti Efris Saputri
Keyword(s):  
Discriminant Analysis ◽  
Sample Selection ◽  
Sampling Technique ◽  
Profit Sharing ◽  
Primary Data ◽  
Analysis Method ◽  
Banking Services ◽  
Islamic Bank ◽  
Conventional Banks ◽  
Conventional Bank

This study  was intended  to  examine the effect of  profit  sharing  principle and  interest,  and  bank reputation  against  customer  decision  in  choosing  banking  services,  that  is  between  islamic  bank  and conventional  bank in Jambi  City.  Data in this study  is primary data by using  questionnaire. The sample selection  in  this research  used  nonprobability sampling  technique  with  acidental  sampling technique. The sample obtained in this study were customer of islamic bank and customer of conventional bank in Jambi City. The  analysis  method  used  was  discriminant  analysis  using  IBM  SPSS  Statistic  22.  The  results  of  the discriminant analysis prove that in choosing banking services in Jambi City between islamic banks and conventional banks, customers do not see from the principle of profit sharing and interest, and bank reputation.

scholarly journals EXAMINING THE DETERMINANT FACTORS ON CONSUMER SWITCHING INTENTION TOWARD ISLAMIC BANK IN CENTRAL JAVA, INDONESIA

2020 ◽  
Vol 8 (2) ◽  
pp. 364-372 ◽  
Author(s):  
Sulis Riptiono ◽  
Agus Suroso ◽  
Ade Irma Anggraeni
Keyword(s):  
Quantitative Research ◽  
Consumer Trust ◽  
Islamic Banks ◽  
Consumer Awareness ◽  
Determinant Factors ◽  
Central Java ◽  
Important Concern ◽  
Consumer Intentions ◽  
Consumer Switching ◽  
Conventional Banks

Purpose of the study: The purpose of this paper is to examine the determinant factors that influence consumer switching intentions from conventional banks to Islamic banks in Central Java, Indonesia. Methodology: This study is quantitative research in which data is collected by using a survey with the questionnaire. Data was collected by distributing questionnaires to 480 Muslim respondents who were still registered as customers at three conventional government banks in Indonesia using purposive sampling techniques and analyzed with SEM-AMOS v24. Main Findings: The result showed that all out of the hypotheses tested, there is only one hypothesis that was rejected, is the fourth hypothesis. This research reveals that consumer trust in Islamic banks, consumer awareness and religiosity had a positive and significant effect on attitude toward Islamic banks. Furthermore, consumer awareness and religiosity are also able to predict consumer switching intentions at Islamic banks but consumer trust toward Islamic banks has insignificant consumer switching intentions at Islamic banks. Applications of this study: Based on the results of the study, conventional bank consumers' intentions to switch to Islamic banks are influenced by consumer awareness, level of religiosity, and consumer attitudes toward Islamic banks. Furthermore, this is becoming a very important concern for Islamic banks to pay more attention to the antecedents used in this study. Trust is an important predictor for companies in increasing intentions, in this study then it has not been proven to influence consumer intentions to move to Islamic banks. Trust will be able to increase intention if consumers have a good attitude towards Islamic banks. Novelty/Originality of this study: This study linked the variables of consumer awareness, religiosity, consumer trust, attitudes toward Islamic banks and consumer switching intentions on Islamic banks within a conceptual framework.

scholarly journals RIBA AND ISLAMIC BANKING, EXAMINING THE PRACTICES OF JAIZ BANK PLC, NIGERIA

2018 ◽  
Vol 18 (1) ◽  
Author(s):  
Abdulmajeed Bolade Hassan-bello
Keyword(s):  
Joint Venture ◽  
Profit Sharing ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Islamic Bank ◽  
Public Company ◽  
Conventional Banks ◽  
Financial Transactions ◽  
Common Application ◽  
Islamic Values

Critics of Islamic banking argue, that how could Islamic banking work when interest (riba) is prohibited? Those in favour argue that Islamic banks can operate without interest. This is the contention of the paper. Islamic bank is a banking which operates without the norm of interest. However, the Muslim scholars have never seriously discussed the three basic questions. Riba, interest, are riba and interest synonymous. The most common application of riba is on monetary transaction relating to “loans” and “credits”. A unique feature of Islamic banking is its profit-and-loss sharing (PLS) paradigm, which is predominantly based on the mudarabah (profit-sharing) and musharaka (joint venture) concepts of Islamic contracting. However, Islamic banks are also criticized for not applying the principle of mudaraba in an acceptable manner. Where banks are eager to take part in profit-sharing but they have little tolerance for risk. Jaiz bank plc, the first Islamic bank in Nigeria, is a quoted public company owned by over 26,000 shareholders. Based on recommendations from Islamic Development Bank (IDB), which is also a shareholder of the bank, Jaiz Bank PLC had partnered with Islamic Bank of Bangladesh (IBBL). However, the Islamic Banks, generally, seem to attract a fraction of the business of financial transactions in any country where conventional banks operate. The challenge facing Islamic banks is the diversity of opinion among the Sharia scholars. Whether the particular practice or product, is Sharia compliant. The paper therefore, concludes that, by prohibition of riba, Islam wishes to establish an economic system where all forms of exploitation are eliminated. The difficulty to understand the prohibition comes from lack of appreciation of the whole complex of Islamic values.  Thus, the future of Islamic banks depends not only upon investing in new products but also upon the satisfying the faith of the stakeholders. 

Brand familiarity vs profit-sharing rate: which has a stronger impact on Muslim customers’ intention to invest in an Islamic bank?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sri Rahayu Hijrah Hati ◽  
Niken Iwani Surya Putri ◽  
Sri Daryanti ◽  
Sigit Sulistiyo Wibowo ◽  
Anya Safira ◽  
...  
Keyword(s):  
Experimental Design ◽  
Financial Risk ◽  
Perceived Value ◽  
Profit Sharing ◽  
Brand Trust ◽  
Content Type ◽  
Brand Familiarity ◽  
Islamic Bank ◽  
Bank Managers ◽  
The Impact

Purpose The purpose of this study is to examine the impact of brand familiarity and profit-sharing rate on Muslim customers’ brand trust, perceived financial risk, perceived value and intention to invest in an Islamic bank. Design/methodology/approach A between-subjects experimental design was applied in the study. Six experiments involving two brand familiarity levels and three profit-sharing rates were conducted using a total of 217 samples. Randomization was applied in the study, which generated unequal sample sizes for each group of experiments. Findings The findings of this experimental study demonstrated that Muslim customers’ familiarity with the bank’s brand has a significant impact on their brand trust and intention to invest in an Islamic bank. The study also found that the profit-sharing rate has a significant impact on the perceived value both with and without interaction with brand familiarity. Research limitations/implications The current study applies an independent measured design or a between-subjects experimental design, that resulted in unequal sample sizes. In addition, the study also does not control for the types of bank accounts owned by respondents. The design may invite the presence of confounding variables that exist due to individual differences and environmental variables. Practical implications The results show that Islamic bank managers should care about the brand familiarity issue, which strongly influences customers’ brand trust and customer intention to invest in an Islamic bank. In addition, Islamic bank managers should pay attention to the profit-sharing rate given to customers, as it interacts with brand familiarity in influencing customers’ perceived value. Originality/value This study examined the impact of brand familiarity and profit-sharing rate on Muslim consumers’ brand trust, perceived risk, perceived value and intention to save in an Islamic bank. The paper provides a shred of empirical evidence to the theoretical relationship between the subjective and objective cues that influence the formation of customers’ trust, perceived financial risk, perceived value and intention in the Islamic bank context.

PENERAPAN ASAS KEADILAN PADA TRANSAKSI PENYIMPANAN DANA NASABAH DI BANK SYARIAH BERDASARKAN AKAD MUDHARABAH

2020 ◽  
Vol 5 (1) ◽  
pp. 1-12
Author(s):  
SITI NUR SHOIMAH
Keyword(s):  
Profit Sharing ◽  
Islamic Banking ◽  
Business Activity ◽  
Legal Research ◽  
Conceptual Approach ◽  
Islamic Bank ◽  
Principle Of Justice

ABSTRAK This research is motivated by the fact that it does not include clauses related to the risk of the Bank or the Customer in the mudharabah agreements in the customer deposit funds in Islamic Banking (Sharia Banking), if at any time the business of managing a Islamic Bank fund suffers, even though there are also Customer funds in the business, and it’s not balanced, because maybe only one party, the Customer or the Bank, bears the risk of loss. This imbalance then causes injustice, even though justice is a shariah requirement in the distribution of results from a business activity. Research that uses the normative legal research with the statute approach, and conceptual approach, results in the finding that the principle of justice in customer deposit funds in Islamic Banking based on mudharabah agreements is realized in the form of profit sharing system in the form of proportional and balanced benefits and risks.   Keyword: Principle of Justice, Mudharabah Agreements, Customer Deposit Fund, Islamic Banking   ABSTRAK Penelitian ini dilatarbelakangi oleh fakta yang menunjukkan tidak dicantumkannya klausul terkait resiko Bank ataupun Nasabah di dalam akad mudharabah pada transaksi penyimpanan dana Nasabah di Bank Syariah, apabila suatu ketika usaha dari pengelolaan dana Bank Syariah mengalami kerugian, padahal di dalam usaha tersebut juga terdapat dana Nasabah, dan ini tentu tidak seimbang, karena dimungkinkan hanya pihak Nasabah Penyimpan atau Bank Syariah yang menanggung resiko atas kerugian tersebut. Ketidakseimbang inilah yang kemudian menimbulkan adanya ketidakadilan, padahal keadilan merupakan persyaratan syari’ah dalam pembagian hasil dari suatu kegiatan usaha. Penelitian yang menggunakan metode normatif dengan pendekatan perundang-undangan dan pendekatan konseptual ini, menghasilkan temuan bahwa asas keadilan pada transaksi penyimpanan dana Nasabah di Bank Syariah berdasarkan akad mudharabah diwujudkan dalam bentuk sistem bagi hasil berupa keuntungan dan resiko secara proporsionalitas dan seimbang.        Kata Kunci:Asas Keadilan,  Akad Mudharabah, Penyimpanan Dana Nasabah, Bank Syariah  

Loyalty towards Islamic banking: service quality, emotional or religious driven?

2019 ◽  
Vol 11 (1) ◽  
pp. 66-80 ◽  
Author(s):  
Dwi Suhartanto ◽  
Christopher Gan ◽  
Ira Siti Sarah ◽  
Setiawan Setiawan
Keyword(s):  
Service Quality ◽  
Customer Loyalty ◽  
Structural Equation ◽  
Islamic Banking ◽  
Emotional Attachment ◽  
Islamic Banks ◽  
Content Type ◽  
Perceived Service Quality ◽  
Islamic Bank ◽  
Bank Managers

Purpose This paper aims to integrate and examine three loyalty routes (i.e. service quality, emotional attachment and religiosity) in developing customer loyalty towards Islamic banking. Design/methodology/approach Data were collected from 412 Islamic bank customers from Indonesia. Variance-based structural equation modelling was applied to evaluate the association between service quality, emotional attachment, religiosity and customer loyalty. Findings This study reveals that customer loyalty is more driven by emotional attachment and religiosity rather than by perceived service quality. Although not directly affecting customer loyalty, service quality strengthens customer satisfaction towards Islamic banks. Practical implications This study provides an opportunity for Islamic bank managers to increase their customer loyalty through the development of emotional attachment and religiosity. To improve customer loyalty, this study suggests that Islamic banks have to provide prompt, accurate and non-personal service. It is also important for Islamic bank managers to keep the bank operation compliant with the Sharia law. Originality/value This study is the first attempt to assess the three loyalty routes simultaneously in influencing customer loyalty.

Is Islamic bank profitability driven by same forces as conventional banks?

2016 ◽  
Vol 9 (1) ◽  
pp. 46-66 ◽  
Author(s):  
Hajer Zarrouk ◽  
Khoutem Ben Jedidia ◽  
Mouna Moualhi
Keyword(s):  
Dynamic Panel Data ◽  
Islamic Banking ◽  
Subprime Crisis ◽  
Islamic Banks ◽  
Mena Region ◽  
Bank Profitability ◽  
Content Type ◽  
Large Sample ◽  
Islamic Bank ◽  
Conventional Banks

Purpose The purpose of this paper is to ascertain whether Islamic bank profitability is driven by same forces as those driving conventional banking in the Middle East and North Africa (MENA) region. Distinguished by its principles in conformity with sharia, Islamic banking is different from conventional banking, which is likely to affect profitability. Design/methodology/approach The paper builds on a dynamic panel data model to identify the banks’ specific determinants and the macroeconomic factors influencing the profitability of a large sample of 51 Islamic banks operating in the MENA region from 1994 to 2012. The system-generalized method of moment estimators are applied. Findings The findings reveal that profitability is positively affected by banks’ cost-effectiveness, asset quality and level of capitalization. The results also indicate that non-financing activities allow Islamic banks to earn higher profits. Islamic banks perform better in environments where the gross domestic product and investment are high. There is evidence of several elements of similarities between determinants of the profitability for Islamic and conventional banks. The inflation rate, however, is negatively associated with Islamic bank profitability. Practical Implications The authors conclude that profitability determinants did not differ significantly between Islamic and conventional banks. Many factors are deemed the same in explaining the profitability of conventional as well as Islamic banks. The findings reported in the current paper might be of interest for policy makers. It is recommended to better implement non-financing activities to improve Islamic bank profitability. Originality/value Unlike the previous empirical research, this empirical investigation assesses the issue whether Islamic banks profitability is influenced by same factors as conventional model. It enriches the literature in this regard by considering the specificities of Islamic banking to identify the determinants of profitability. Moreover, this study considers a large sample (51 Islamic banks) through a different selection of countries/banks than previous studies. In addition, the period of study considers the subprime crisis insofar it ranges from 1994 to 2012. Hence, this broader study allows the authors to draw more consistent conclusions.

Integration of Islamic bank specific risks and their impact on the portfolios of Islamic Banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Syed Alamdar Ali Shah ◽  
Raditya Sukmana ◽  
Bayu Arie Fianto
Keyword(s):  
Risk Management ◽  
Portfolio Diversification ◽  
Islamic Banks ◽  
Content Type ◽  
Management Framework ◽  
Risk Return ◽  
Islamic Bank ◽  
Risk Management Framework ◽  
Impact Risk ◽  
Conventional Banks

Purpose This study aims to propose a risk management framework for Islamic banks to address specific risks that are unique to Islamic bank settings. Design/methodology/approach A unique methodology has been developed first by exploring the dynamics and behaviors of various risks unique to Islamic banks. Second, it integrates them through a series of diagrams that show how they behave, integrate and impact risk, returns and portfolios. Findings This study proposes a unique risk-return relationship framework encompassing specific risks faced by Islamic banks under the ambit of portfolio theory showing how Islamic banks establish a steeper risk-return path under Shariah compliance. By doing so, this study identifies a unique “Islamic risk-return” nexus in Islamic settings as an explanation for the concern of contemporary researchers that Islamic banks are more risky than conventional banks. Originality/value The originality of this study is that it extends the scope of risk management in Islamic banks from individual contract-based to an integrated whole, identifying a unique transmission path of how risks affect portfolio diversification in Islamic banks.

scholarly journals Pricing Linkage between Islamic Banking and Conventional Banking: The Case of Bangladesh

2016 ◽  
Vol 3 (4) ◽  
pp. 84
Author(s):  
Sarwar Uddin Ahmed ◽  
Ashikur Rahman ◽  
Samuel Parvez Ahmed ◽  
G M Wali Ullah
Keyword(s):  
Profit Sharing ◽  
Islamic Banking ◽  
Specific Rate ◽  
Islamic Banks ◽  
Loss Mechanism ◽  
Monthly Data ◽  
For Profit ◽  
Significant Difference ◽  
Conventional Banks ◽  
The Relationship

<p><em>Islamic banking is based on profit and loss mechanism where the use of interest is prohibited.  Unlike conventional banks, these banks do not charge a specific rate of interest, rather provides financing in exchange for profit sharing.  However, there are studies claiming that, in practice, Islamic banking is same as conventional banking with regard to the use of interest. It is also claimed that, Islamic deposits are not interest-free, but are closely attached to conventional deposits.  On this background, the objective of this study is to examine the relationship between pricing in Islamic banks vis-à-vis conventional banks by taking the case of Bangladesh. We have used monthly data during the period of 2009-2013. The findings of the study showed that, there is no statistically significant difference between the monthly average lending rates of Islamic banks and conventional banks. However, there is significant difference between deposit rates. The existence of causal relationship was inconclusive, and requires further analysis.</em></p>

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