The attitudes of bank customers towards Islamic banks arediscussed, together with the perceived unique characteristics of Islamicbanks by their customers, and the importance of…
Abstract
The attitudes of bank customers towards Islamic banks are discussed, together with the perceived unique characteristics of Islamic banks by their customers, and the importance of selected patronage factors in choosing conventional and Islamic banks. It is concluded that in considering motives responsible for selecting Islamic banks as depository institutions, religious motives did not stand out as being the only significant ones; bank customers are profit motivated; the evidence generated in the study did not find an important consideration of the new branches′ role in increasing the utilisation of services provided by Islamic banks; peer group influence plays an important role in selecting Islamic banks as depository institutions; and there is a high degree of awareness on the part of bank customers of the advantage of the profit‐loss‐sharing modes of investment and of the economic and social development role of the Islamic banking system.
Details
Keywords
Cengiz Erol, Erdener Kaynak and El‐Bdour Radi
In recent years financial institutions, marketingresearchers and public policy makers haverecognised that behavioural analysis is vital forunderstanding bank customers. Most…
Abstract
In recent years financial institutions, marketing researchers and public policy makers have recognised that behavioural analysis is vital for understanding bank customers. Most studies so far have focused on understanding the behaviour of customers of commercial banks in developed economies. Very little research has been undertaken concerning bank customers′ attitudes and behavioural characteristics in developing countries. The purpose of this study is to understand customers′ attitudes, beliefs and perceptions about the services offered by conventional and Islamic banks in Jordan. The information presented here will provide Jordanian bank executives and public policy makers, and other developing country executives, with insights into the kind of services bank customers find most appropriate to their banking needs.
Details
Keywords
Arafat and Rabin's famous handshake opened a new stage in the Middle East peace talks. Recent delays in the process have centered more around economic than political issues. Two…
Abstract
Arafat and Rabin's famous handshake opened a new stage in the Middle East peace talks. Recent delays in the process have centered more around economic than political issues. Two main controversies revolve around means for distributing aid funds and the development of viable financial networks in the Israeli Occupied Territories. These agenda are reviewed from the viewpoint of promoting U.S. trade interests in the region. Islamic banks, if they are granted licenses by the Israeli government, may provide an effective means for distributing funds, while at the same time promoting U.S.‐Arab mercantile trade.
Mamunur Rashid, Shi Min How and Abul Bashar Bhuiyan
This chapter explores the determinants of satisfaction of the Islamic microcredit borrowers in Bangladesh. A total of 245, mostly educated and young, borrowers of rural…
Abstract
This chapter explores the determinants of satisfaction of the Islamic microcredit borrowers in Bangladesh. A total of 245, mostly educated and young, borrowers of rural development scheme, the largest Islamic microcredit institution (MCI) in the world, were included in a survey using a structured questionnaire. Factors were extracted using exploratory factor analysis. Multiple regression analysis was conducted to identify influential determinants of satisfaction of microcredit borrowers. Borrowers have identified the activities and interaction in the “center,” which includes weekly/monthly meetings, investment-related training, and group performance review, as the most vital factor influencing their overall satisfaction. Competence of the microcredit staffs and officials is the second important determinant. Trust plays the next important role in overall satisfaction of the borrowers with the Islamic microcredit institutions. Convenience, of applying for loan, getting an approval, and paying instalments, is the other influential determinant of the borrower’s satisfaction. The findings imply that given the competition and social need of the Islamic microcredit institutions globally, policymakers must ensure greater investment in human capital, in creating awareness about products and services of the Islamic microcredits, and in initiating a prudent change in the regulation so that Islamic microcredit can become a tool for sustainable socioeconomic development. Use of a proper marketing strategy can also help the MCIs to support the financial inclusion policy of the government. Satisfaction of the borrowers of the Islamic microcredit institutions is yet to arrive in Islamic marketing literature. The proposed borrower-centric model can help reduce poverty and the internal loan-shark problem through adequate engagement of relevant stakeholders.
Details
Keywords
Mohammed Hersi Warsame and Edward Mugambi Ireri
The purpose of this paper is to examine the direct and indirect moderation effects of demographic and socio-economic(s) factors on the adoption of Islamic banking in UAE.
Abstract
Purpose
The purpose of this paper is to examine the direct and indirect moderation effects of demographic and socio-economic(s) factors on the adoption of Islamic banking in UAE.
Design/methodology/approach
Convenience sampling was done on the residents of Sharjah, Dubai, and Abu Dhabi. A closed-ended questionnaire with 30 items was designed and pre-tested before the start of the study. Path analysis and moderation testing were the main analytical approach. A total of 320 respondents completed the survey.
Findings
The research revealed that demographic and socio-economic(s) moderators may have direct and indirect moderation effects on the adoption of the Islamic banking in the UAE, which indicates the importance of these factors in the provision of Islamic banking products and services in the UAE.
Practical implications
This study further revealed that these moderators have huge practical implications for Islamic bank managers and marketers as they can exploit these demographics to enhance their market share in the UAE.
Social implications
In UAE, minimal attention has been directed toward the role moderators would play in the criterion that individual investors would use in the adoption of Islamic banking products and services in a cosmopolitan environment that is experiencing competition from conventional banks.
Originality/value
An extensive review of the existing literature on the adoption of Islamic banking reveals that no empirical research has been undertaken to explore the role played by demographic and socio-economic(s) moderators in the adoption of Islamic banking in UAE and internationally. This study attempts to fill this gap.
Details
Keywords
Kaouther Toumi, Jean-Laurent Viviani and Lotfi Belkacem
The income is attributed to PSIAU holders after setting aside the reserves (PER and IRR) and deducting the bank's share of income called mudarib share.
Nuradli Ridzwan Shah Mohd Dali, Shumaila Yousafzai and Hanifah Abdul Hamid
The main aim of this paper is to identify whether certain consumers behave irrationally when it comes to select banking products. This paper builds on one of the most significant…
Abstract
Purpose
The main aim of this paper is to identify whether certain consumers behave irrationally when it comes to select banking products. This paper builds on one of the most significant banking products that is the credit card.
Design/methodology/approach
This is an exploratory research paper. Therefore, only descriptive analysis on the differences between three credit card user groups such as the Islamic credit card users, conventional card users and users who decide to use both credit cards, conventional and Islamic, were presented.
Findings
The demographic and psychographic factors for the three different groups differ. In addition, there are four factors that influence the credit card selection. The factors are insurance/takaful provided by the credit issuers, cost associated with the credit card, the reward points programme offered and the convenience factors. Furthermore, the study found that three of the factors except insurance/takaful are significantly different between three credit card groups.
Research limitations/implications
This paper is limited to the context of Malaysia and the respondents are mostly from the same ethnic. Therefore, it could not be generalised in the context of other countries and further studies comparing different culture or ethnic could benefit and enrich the topic of study.
Practical implications
The Islamic and conventional banks could focus on several factors influencing customers’ selection and could focus to improve certain lacking areas as perceived by the consumers. The ability to increase the perceptions of the consumers regarding their credit cards will enable their products to be chosen in the market.
Originality/value
There was a significant amount of literature discussed in the Islamic banking selection factors. However, little attention being paid to the selection of a specific bank’s product. This study offers a study that looks into the selection of the credit card offered by the banks in respect to the irrational behaviours of the religious consumers in economic activities as compared to the conventional economists. This paper will contribute to the body of existing literature of banking selection.
Details
Keywords
Bushra K. Mahadin and Mamoun N. Akroush
The purpose of this paper is to identify factors affecting word-of-mouth (WOM) towards Islamic Banking (IB) in Jordan through understanding the roles of service quality and…
Abstract
Purpose
The purpose of this paper is to identify factors affecting word-of-mouth (WOM) towards Islamic Banking (IB) in Jordan through understanding the roles of service quality and perceived value.
Design/methodology/approach
A self-administered survey was hand-delivered to the targeted sample of Islamic banks customers in Jordan. The authors delivered 400 questionnaires to customers from which 352 were deemed valid for the analysis. Exploratory and confirmatory factor analyses were performed to assess the research constructs validity and composite reliability. Structural path analysis was also used to test the research model and hypothesised relationships between the variables.
Findings
Service quality has a positive and significant effect on perceived value and WOM towards IB. Convenience has a positive and significant effect on perceived value. Finally, perceived value has a positive and significant effect on WOM towards IB. Service quality exerted the strongest effect on perceived value and WOM. Also, 38 per cent of variation in perceived value was caused by religious motives, service quality and convenience path, whereas 34 per cent of variation in WOM towards IB was caused by perceived value, service quality and convenience path.
Research limitations/implications
Future research needs to investigate other factors that may affect customers’ WOM concerning IB such as perceived bank image, trust and subjective norms. Future research should investigate other dimensions of perceived value such as social, psychological, emotional, sacrifice value and product values and how they affect WOM. From an international marketing standpoint, comparative studies between Jordanian and non-Jordanian Islamic customers are potential areas of future research for international marketing strategies and cross-cultural consumer behaviour analysis.
Practical implications
The paper identifies the determinants of WOM towards IB. Managers should focus on executing service quality strategies customised towards IB. Convenience is a major driver of perceived value and, then, WOM towards IB. Managers need to focus on key marketing messages that enhance religious motives in customers’ minds and hearts; however, attracting new customers and retaining the current ones depend on the perceived benefits in the areas of service quality, convenience and several value aspects.
Originality/value
This study is the first of its kind to test a model of WOM determinants in IB in Jordan. The study is thought to have made a reasonable contribution to consumer behaviour literature and, specifically, for decision-making process through developing and testing a model of WOM determinants towards IB. The study offers CEOs and marketing managers of Islamic banks new insights into the determinants of WOM and how they contribute to consumers’ decision-making process and attitudes to achieve the intended behavioural outcomes towards IB, which were not available at their hands before. These empirical findings are crucial inputs for marketing strategy formulation and implementation.
Details
Keywords
Irfan Butt, Nisar Ahmad, Amjad Naveed and Zeeshan Ahmed
The purpose of this paper is to examine the reasons behind low penetration of Islamic banking in Pakistan. Specifically, the study investigates the differentiation of Islamic…
Abstract
Purpose
The purpose of this paper is to examine the reasons behind low penetration of Islamic banking in Pakistan. Specifically, the study investigates the differentiation of Islamic banks (IBs) from conventional banks, the role of religion in choosing Islamic banking and the perception of IBs amongst the consumers.
Design/methodology/approach
The study uses a mixed-method approach, qualitative research along with a survey of users of conventional and Islamic banking. Factor analysis identified underlying dimensions and cluster analysis ascertained the differences between users and non-users of Islamic banking. Inferential statistics were used to test purported hypotheses.
Findings
The study finds that the users and non-users both perceive that Islamic banking is not completely interest-free. Furthermore, consumers presume that IBs are more of eyewash and are not truly practicing Islamic banking. Moreover, religion is not a major factor that attracts new users but there are also other important factors in marketing Islamic banking, such as service quality, convenience, branch network, etc.
Originality/value
This is one of the sparse studies in the field of Islamic banking consumer behaviour, which uses focus groups of users and non-users, and in-depth interviews of experts, to identify the issues and factors considered relevant and important by the users rather than relying only on literature review. Furthermore, it also provides a profile of users versus non-users of Islamic banking which is very useful for segmentation and targeting of customers.
Details
Keywords
Akram Mahmoud Al-jazzazi and Parves Sultan
The purpose of this paper is to review some of the key studies that are published in the last three decades on banking service quality with particular attention to the Middle…
Abstract
Purpose
The purpose of this paper is to review some of the key studies that are published in the last three decades on banking service quality with particular attention to the Middle Eastern countries, and provide some future research directions.
Design/methodology/approach
Literature review.
Findings
The review generated 11 research questions related to Islamic and conventional banking services in the Middle Eastern countries.
Research limitations/implications
This paper reviews leading, current studies on conventional and Islamic banking in the Middle East, and provides future research directions for scholars and practitioners alike. Future research should address each of the research questions as identified in this paper with empirical data/evidence.
Practical implications
This paper reviews leading, current studies on conventional and Islamic banking in the Middle East and provides future directions of research for scholars and practitioners alike. Future research should address each of the research questions the authors identify with empirical data and scientific evidence.
Originality/value
This paper would be useful for guiding the development and resolution of researchers’ and practitioners’ research questions and could help to strengthen the banking industry in Middle Eastern countries.