Factors Influencing the Intentions of Non-Muslims in India to Accept Islamic Finance as an Alternative Financial System
DOI:
https://doi.org/10.6000/1929-7092.2018.07.27Keywords:
Islamic Finance, intentions, attitude, behaviour.Abstract
This study aims to investigate the impact of attitude & behaviour, subjective norms and religiosity on intention to accept Islamic finance as an alternative financial system in India. An adopted questionnaire with 20 items was used to gather data from 932 respondents. The sample was taken from north India and three religions: Hindu, Christianity and Sikhism acted as strata for this study. The data was tested for association between three variables on intention to accept Islamic finance. Statistical tools like reliability analysis, independent variable correlation, sample adequacy and regression analysis were used. The findings of this study suggest that subjective norms and religiosity is the influencer in accepting Islamic finance as an alternative. Attitude & behaviour has no relevance in developing intentions about accepting Islamic Finance. The research is original and its implications will be helpful for targeting non-Muslim customers with customized products and create awareness among people that Islamic finance is not only for Muslims.
References
Adel, A. (2010), ?Global financial crisis: an Islamic finance perspective, International Journal of Islamic and Middle Eastern Finance and Management, Vol. 3 No. 4, pp. 306-320.
https://doi.org/10.1108/17538391011093252
Ahmad, W., A. Rahman, N.A. Ali and A.C. Seman, (2008). Religiosity and Banking Selection Criteria among Malays in Lembah Klang, Journal of Syariah, 16(2).
Ahmad, N., & Haron, S. (2002). Perceptions of Malaysian corporate customers towards Islamic banking products and services. International Journal of Islamic Financial Services, 3(4), 13-29.
Ajzen, I. and M. Fishbein, (2000). Attitudes and the Attitude-behavior Relation: Reasoned and Automatic processes. W. Stroebe and M. (Eds) Hewstone, European Review of Social Psychology, Wiley, New York, NY, pp: 1-28.
Alam, S.S. and N.M. Sayuti, (2011). Applying the Theory of Planned Behavior (TPB) in Halal Food Purchasing. International Journal of Commerce and Management, 21(1): 8-20.
https://doi.org/10.1108/10569211111111676
Alam, S. S., Janor, H., Zanariah, C. A. C. W., & Ahsan, M. N. (2012). Is religiosity an important factor in influencing the intention to undertake Islamic home financing in Klang Valley. World Applied Sciences Journal, 19(7), 1030-1041.
Amin, H., Abdul Rahman, A.R., & Abdul Razak, D (2014), Consumer acceptance of Islamic home financing. International Journal of Housing Markets and Analysis, 7 (3), 307-332.
https://doi.org/10.1108/10569211111111676
Arnould, E., Price, L., & Zikhan, G. (2004). Consumers (2nd ed.). New York: McGraw Hill.
Baber, H. (2013). Islamic banking in Indian economy-An empirical approach of future crisis. International Monthly Refereed Journal of Research In Management & Technology, 2, 34-47.
Baber, H. (2017). A comparative study of Islamic Housing Finance Models and Issues. Qualitative Research in Financial Markets, 9(2).
https://doi.org/10.1108/QRFM-12-2016-0053
Baber, H., & Zaruova, C. (2018). Religion and Banking: A Study of Islamic Finance in India. ?????? (IJIDB), 9(6), 7-13.
https://doi.org/10.13106/ijidb.2018.vol9.no6.7
Baig, S. A. (2012), Islamic banking – future of financial world, Pakistan & Gulf Economist, Vol. 31 No.37.
Bailey, J. M., & Sood, J. (1993). The effects of religious affiliation on consumer behavior: A preliminary investigation. Journal of Managerial Issues, 328-352.
Bartlett, M. S. (1954). A note on the multiplying factors for various ? 2 approximations. Journal of the Royal Statistical Society. Series B (Methodological), 296-298.
Bley, J. and K. Kuehn, (2004). Conventional Versus Islamic Finance: Student Knowledge and Perception in the United Arab Emirates. International Journal of Islamic Financial Services, pp: 5.
Cateora, P.A. and J.L. Graham, (1999). International Marketing, 10th ed. Boston: Irwin/McGraw-Hill.
Caplen, B. and DiVanna, J. (2010), ?No room for complacency: top 500 Islamic financial institutions, The Banker, October 2012.
Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests. psychometrika, 16(3), 297-334.
https://doi.org/10.1007/BF02310555
Davis, F.D., R.P. Bagozzi and P.R. Warshaw, (1989). User Acceptance of Computer Technology: a Comparison of Two Theoretical Models. Management Science, 35(8): 982-1003.
https://doi.org/10.1287/mnsc.35.8.982
Derbel, H., Bouraoui, T., & Dammak, N. (2011). Can Islamic finance constitute a solution to crisis?. International Journal of Economics and Finance, 3(3), 75.
https://doi.org/10.5539/ijef.v3n3p75
Delener, N. (1990). The effects of religious factors on perceived risk in durable goods purchase decisions. Journal of Consumer Marketing, Vol. 7 No. 3, pp. 27-38.
https://doi.org/10.1108/EUM0000000002580
DiVanna, J. and Hancock, M. (2011), ?Top 500 Islamic financial institutions - introduction: Islamic finance roars again, The Banker, Nov. 1, 2011.
Fauziah, M.T., Ramayah, T and Dzuljastri, A.R (2008); “Factors influencing intention to use diminishing partnership home financing”, International Journal of Islamic and Middle Eastern Finance and Management. Vol.1, No.3, pp 235-248.
https://doi.org/10.1108/17538390810901168
Gerrard, P. and J.B. Cunningham, (1997). Islamic Banking: A study in Singapore. International Journal of Bank Marketing, 15(6).
https://doi.org/10.1108/02652329710184433
Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2006). Multivariate, Data Analysis (6th ed.): Peasron Education International.
Hasan, M. and Dridi, J. (2010), ?The effects of the global crisis on Islamic and conventional Banks: A comparative study, working paper No. 10/201, International Monetary Fund.
Imam, P. and Kpodar, K. (2010), ?Islamic banking: how has it diffused?, working paper No.10/195, International Monetary Fund, August 2010.
Jaffar, M. A., & Musa, R. (2016). Determinants of Attitude and Intention towards Islamic Financing Adoption among Non-Users. Procedia Economics and Finance, 37, 227-233.
https://doi.org/10.1016/S2212-5671(16)30118-6
Leech, N. L., Barrett, K. C., & Morgan, G. A. (2005). SPSS for intermediate statistics: Use and interpretation. Psychology Press.
Kamariah, N., & Muslim, N. (2007). The application of theory of planned behaviour (TPB) in internet purchasing: using SEM. In International Conference on Marketing and Retailing, Petaling Jaya, Selangor, Malaysia (pp. 196-205).
Lu, J., C.S. Yu, C. Liu and J.E. Yao, (2003). Technology Acceptance Model for Wireless Internet. Internet Research, 13(3): 206-22.
https://doi.org/10.1108/10662240310478222
Mariam M. H. A., Kortam, W., Ehab, A.A and E. Noha (2015), “Effects of Religiosity on Consumer attitude towards Islamic Banking in Egypt “International Journal of Bank Marketing Vol.33. No.6 pp 786 – 807
https://doi.org/10.1108/IJBM-02-2015-0024
Marty, M.E. and R.S. Appleby, (eds.) (1991). Fundamentalisms Observed. Chicago: University of Chicago Press.
Metwally, M., (2006). Economic Consequences of Applying Islamic Principles in Muslim Societies. Journal of Islamic Banking and Finance, 23(1): 11-33.
Ramayah, T., M. Jantan, N. Noor, R.C. Razak and K.P. Ling, (2003). Receptiveness of Internet Banking by Malaysian Consumers. Asian Academy of Management Journal, 8: 21-29.
Ramayah, T., B. Aafaqi and J. Ignatius, (2004). Role of Self-efficacy in E-library Usage Among Students of a Public University in Malaysia. Malaysian Journal of Library and Information Science, 9(1): 39-57
Ramayah, T., C.Y. Ling, M.S. Norazah and M. Ibrahim, (2005). Determinants of Intention to Usean Online Bill Payment System among MBA Students, E-Business, 9: 80-91.
Rehman, A. and M.S. Shabbir, 2010. The Relationship Between Religiosity And New Product Adoption. Journal of Islamic Marketing, 1(1): 63-69.
https://doi.org/10.1108/17590831011026231
Ringle, C. M., Wende, S., & Becker, J. M. (2015). SmartPLS 3. Boenningstedt: SmartPLS GmbH, http://www. smartpls. com.
Shih, Y.Y. and K. Fang, (2004). The Use Of Decomposed Theory Of Planned Behavior To Study Internet Banking In Taiwan, Internet Research, 14(32): 13-23
https://doi.org/10.1108/10662240410542643
Smolo, E. and Mirakhor, A. (2010), The global financial crisis and its implications for the Islamic financial industry, International Journal of Islamic and Middle Eastern Finance and Management, Vol. 3 No. 4, pp. 372-385.
https://doi.org/10.1108/17538391011093306
Suddin, l, tangakinjal, G.H and hanudin, A. (2009),” Predicting intention to choose halal products using the theory of reasoned action”, International journal of islamic and middle eastern Finance and management, Vol2 No1 pp66-76
Taylor, S. and P. Todd, (1997). Understanding the Determinants of Consumer Composting Behavior. Journal of Social Applied Psychology, 27: 602-28.
https://doi.org/10.1111/j.1559-1816.1997.tb00651.x
Terpstra, V. and R. Sarathy, (2000). International Marketing, 8th ed. Fort Worth, FL: The Dryden Press.
Venkatesh, V. and F.D. Davis, (2000). A Theoretical Expansion of the Technology Acceptance Model: Four Longitudinal Field Studies. Management Science, 46(2): 186-204
https://doi.org/10.1287/mnsc.46.2.186.11926
Volk, S., & Pudelko, M. (2016). Challenges and opportunities for Islamic retail banking in the European context: Lessons to be learnt from a British-German comparison. In Islamic Finance (pp. 157-173). Palgrave Macmillan, Cham.
https://doi.org/10.1007/978-3-319-30918-7_10
Vitell, S.J. and J.G.P. Paolillo, (2003). Consumer Ethics: The Role of Religiosity. Journal of Business Ethics, 46(2): 151-162.
https://doi.org/10.1023/A:1025081005272
Worthington Jr, E. L., Wade, N. G., Hight, T. L., Ripley, J. S., McCullough, M. E., Berry, J. W., ... & O'Connor, L. (2003). The Religious Commitment Inventory--10: Development, refinement, and validation of a brief scale for research and counseling. Journal of Counseling Psychology, 50(1), 84.
https://doi.org/10.1037/0022-0167.50.1.84
https://doi.org/10.1108/17538391011093252
Ahmad, W., A. Rahman, N.A. Ali and A.C. Seman, (2008). Religiosity and Banking Selection Criteria among Malays in Lembah Klang, Journal of Syariah, 16(2).
Ahmad, N., & Haron, S. (2002). Perceptions of Malaysian corporate customers towards Islamic banking products and services. International Journal of Islamic Financial Services, 3(4), 13-29.
Ajzen, I. and M. Fishbein, (2000). Attitudes and the Attitude-behavior Relation: Reasoned and Automatic processes. W. Stroebe and M. (Eds) Hewstone, European Review of Social Psychology, Wiley, New York, NY, pp: 1-28.
Alam, S.S. and N.M. Sayuti, (2011). Applying the Theory of Planned Behavior (TPB) in Halal Food Purchasing. International Journal of Commerce and Management, 21(1): 8-20.
https://doi.org/10.1108/10569211111111676
Alam, S. S., Janor, H., Zanariah, C. A. C. W., & Ahsan, M. N. (2012). Is religiosity an important factor in influencing the intention to undertake Islamic home financing in Klang Valley. World Applied Sciences Journal, 19(7), 1030-1041.
Amin, H., Abdul Rahman, A.R., & Abdul Razak, D (2014), Consumer acceptance of Islamic home financing. International Journal of Housing Markets and Analysis, 7 (3), 307-332.
https://doi.org/10.1108/10569211111111676
Arnould, E., Price, L., & Zikhan, G. (2004). Consumers (2nd ed.). New York: McGraw Hill.
Baber, H. (2013). Islamic banking in Indian economy-An empirical approach of future crisis. International Monthly Refereed Journal of Research In Management & Technology, 2, 34-47.
Baber, H. (2017). A comparative study of Islamic Housing Finance Models and Issues. Qualitative Research in Financial Markets, 9(2).
https://doi.org/10.1108/QRFM-12-2016-0053
Baber, H., & Zaruova, C. (2018). Religion and Banking: A Study of Islamic Finance in India. ?????? (IJIDB), 9(6), 7-13.
https://doi.org/10.13106/ijidb.2018.vol9.no6.7
Baig, S. A. (2012), Islamic banking – future of financial world, Pakistan & Gulf Economist, Vol. 31 No.37.
Bailey, J. M., & Sood, J. (1993). The effects of religious affiliation on consumer behavior: A preliminary investigation. Journal of Managerial Issues, 328-352.
Bartlett, M. S. (1954). A note on the multiplying factors for various ? 2 approximations. Journal of the Royal Statistical Society. Series B (Methodological), 296-298.
Bley, J. and K. Kuehn, (2004). Conventional Versus Islamic Finance: Student Knowledge and Perception in the United Arab Emirates. International Journal of Islamic Financial Services, pp: 5.
Cateora, P.A. and J.L. Graham, (1999). International Marketing, 10th ed. Boston: Irwin/McGraw-Hill.
Caplen, B. and DiVanna, J. (2010), ?No room for complacency: top 500 Islamic financial institutions, The Banker, October 2012.
Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests. psychometrika, 16(3), 297-334.
https://doi.org/10.1007/BF02310555
Davis, F.D., R.P. Bagozzi and P.R. Warshaw, (1989). User Acceptance of Computer Technology: a Comparison of Two Theoretical Models. Management Science, 35(8): 982-1003.
https://doi.org/10.1287/mnsc.35.8.982
Derbel, H., Bouraoui, T., & Dammak, N. (2011). Can Islamic finance constitute a solution to crisis?. International Journal of Economics and Finance, 3(3), 75.
https://doi.org/10.5539/ijef.v3n3p75
Delener, N. (1990). The effects of religious factors on perceived risk in durable goods purchase decisions. Journal of Consumer Marketing, Vol. 7 No. 3, pp. 27-38.
https://doi.org/10.1108/EUM0000000002580
DiVanna, J. and Hancock, M. (2011), ?Top 500 Islamic financial institutions - introduction: Islamic finance roars again, The Banker, Nov. 1, 2011.
Fauziah, M.T., Ramayah, T and Dzuljastri, A.R (2008); “Factors influencing intention to use diminishing partnership home financing”, International Journal of Islamic and Middle Eastern Finance and Management. Vol.1, No.3, pp 235-248.
https://doi.org/10.1108/17538390810901168
Gerrard, P. and J.B. Cunningham, (1997). Islamic Banking: A study in Singapore. International Journal of Bank Marketing, 15(6).
https://doi.org/10.1108/02652329710184433
Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2006). Multivariate, Data Analysis (6th ed.): Peasron Education International.
Hasan, M. and Dridi, J. (2010), ?The effects of the global crisis on Islamic and conventional Banks: A comparative study, working paper No. 10/201, International Monetary Fund.
Imam, P. and Kpodar, K. (2010), ?Islamic banking: how has it diffused?, working paper No.10/195, International Monetary Fund, August 2010.
Jaffar, M. A., & Musa, R. (2016). Determinants of Attitude and Intention towards Islamic Financing Adoption among Non-Users. Procedia Economics and Finance, 37, 227-233.
https://doi.org/10.1016/S2212-5671(16)30118-6
Leech, N. L., Barrett, K. C., & Morgan, G. A. (2005). SPSS for intermediate statistics: Use and interpretation. Psychology Press.
Kamariah, N., & Muslim, N. (2007). The application of theory of planned behaviour (TPB) in internet purchasing: using SEM. In International Conference on Marketing and Retailing, Petaling Jaya, Selangor, Malaysia (pp. 196-205).
Lu, J., C.S. Yu, C. Liu and J.E. Yao, (2003). Technology Acceptance Model for Wireless Internet. Internet Research, 13(3): 206-22.
https://doi.org/10.1108/10662240310478222
Mariam M. H. A., Kortam, W., Ehab, A.A and E. Noha (2015), “Effects of Religiosity on Consumer attitude towards Islamic Banking in Egypt “International Journal of Bank Marketing Vol.33. No.6 pp 786 – 807
https://doi.org/10.1108/IJBM-02-2015-0024
Marty, M.E. and R.S. Appleby, (eds.) (1991). Fundamentalisms Observed. Chicago: University of Chicago Press.
Metwally, M., (2006). Economic Consequences of Applying Islamic Principles in Muslim Societies. Journal of Islamic Banking and Finance, 23(1): 11-33.
Ramayah, T., M. Jantan, N. Noor, R.C. Razak and K.P. Ling, (2003). Receptiveness of Internet Banking by Malaysian Consumers. Asian Academy of Management Journal, 8: 21-29.
Ramayah, T., B. Aafaqi and J. Ignatius, (2004). Role of Self-efficacy in E-library Usage Among Students of a Public University in Malaysia. Malaysian Journal of Library and Information Science, 9(1): 39-57
Ramayah, T., C.Y. Ling, M.S. Norazah and M. Ibrahim, (2005). Determinants of Intention to Usean Online Bill Payment System among MBA Students, E-Business, 9: 80-91.
Rehman, A. and M.S. Shabbir, 2010. The Relationship Between Religiosity And New Product Adoption. Journal of Islamic Marketing, 1(1): 63-69.
https://doi.org/10.1108/17590831011026231
Ringle, C. M., Wende, S., & Becker, J. M. (2015). SmartPLS 3. Boenningstedt: SmartPLS GmbH, http://www. smartpls. com.
Shih, Y.Y. and K. Fang, (2004). The Use Of Decomposed Theory Of Planned Behavior To Study Internet Banking In Taiwan, Internet Research, 14(32): 13-23
https://doi.org/10.1108/10662240410542643
Smolo, E. and Mirakhor, A. (2010), The global financial crisis and its implications for the Islamic financial industry, International Journal of Islamic and Middle Eastern Finance and Management, Vol. 3 No. 4, pp. 372-385.
https://doi.org/10.1108/17538391011093306
Suddin, l, tangakinjal, G.H and hanudin, A. (2009),” Predicting intention to choose halal products using the theory of reasoned action”, International journal of islamic and middle eastern Finance and management, Vol2 No1 pp66-76
Taylor, S. and P. Todd, (1997). Understanding the Determinants of Consumer Composting Behavior. Journal of Social Applied Psychology, 27: 602-28.
https://doi.org/10.1111/j.1559-1816.1997.tb00651.x
Terpstra, V. and R. Sarathy, (2000). International Marketing, 8th ed. Fort Worth, FL: The Dryden Press.
Venkatesh, V. and F.D. Davis, (2000). A Theoretical Expansion of the Technology Acceptance Model: Four Longitudinal Field Studies. Management Science, 46(2): 186-204
https://doi.org/10.1287/mnsc.46.2.186.11926
Volk, S., & Pudelko, M. (2016). Challenges and opportunities for Islamic retail banking in the European context: Lessons to be learnt from a British-German comparison. In Islamic Finance (pp. 157-173). Palgrave Macmillan, Cham.
https://doi.org/10.1007/978-3-319-30918-7_10
Vitell, S.J. and J.G.P. Paolillo, (2003). Consumer Ethics: The Role of Religiosity. Journal of Business Ethics, 46(2): 151-162.
https://doi.org/10.1023/A:1025081005272
Worthington Jr, E. L., Wade, N. G., Hight, T. L., Ripley, J. S., McCullough, M. E., Berry, J. W., ... & O'Connor, L. (2003). The Religious Commitment Inventory--10: Development, refinement, and validation of a brief scale for research and counseling. Journal of Counseling Psychology, 50(1), 84.
https://doi.org/10.1037/0022-0167.50.1.84
Downloads
Published
2018-09-24
How to Cite
Baber, H. (2018). Factors Influencing the Intentions of Non-Muslims in India to Accept Islamic Finance as an Alternative Financial System. Journal of Reviews on Global Economics, 7, 317–323. https://doi.org/10.6000/1929-7092.2018.07.27
Issue
Section
Articles
License
Policy for Journals/Articles with Open Access
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are permitted and encouraged to post links to their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work
Policy for Journals / Manuscript with Paid Access
Authors who publish with this journal agree to the following terms:
- Publisher retain copyright .
- Authors are permitted and encouraged to post links to their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work .
