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Selection criteria for Islamic home financing: a case study of Pakistan

Author

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  • Ayesha Hamid
  • Omar Masood

Abstract

Purpose - The aim of this research is to examine the selection criteria of customers for Islamic home financing in the context of Pakistan and to examine these factors with respect to gender, age, income, and occupation. Design/methodology/approach - This study uses a quantitative approach to investigate the choice criteria for Islamic home financing. All 18 independent variables are taken from previous research; for their analysis, descriptive statistics, independent samplet‐tests and ANOVA was used. Data were gathered from the customers of Islamic banking who use the services of Islamic home financing. The sample consists of 200 respondents. For the collection of data, a survey questionnaire with closed‐ended questions and a five‐point Likert scale was employed. The questionnaire was designed into two sections, one consisting of demographic information and the second relating to the selection criteria of Islamic home financing. Findings - The results indicate that theshariahprinciple, fast and efficient services, price, bank reputation, and terms and conditions of product flexibility are the five most important factors considered by customers in choosing Islamic mortgages. Research limitations/implications - The limitations relate to the sample area for the study, which is confined to Lahore, and due to the limited sample size, the findings cannot be generalized. Second, only four banks are considered. Practical implications - This study is beneficial for practitioners in Pakistan by offering insight into choice criteria for Islamic home financing. The results should also be useful for Islamic bank managers who are also policy makers, as they can study and plan for attractive schemes and policies for customers through which they can fulfill their needs and expectations. For the researcher, this study will also add to the existing body of knowledge by providing novel evidence on the selection criteria used for Islamic home financing. Originality/value - This topic has never been examined in the context of Pakistan, so this study initiates the choice criteria for Islamic home financing among Pakistani banks' customers. The paper provides potentially useful information for both customers (in selecting Islamic banks) and bank managers to identify the factors needed to attract customers.

Suggested Citation

  • Ayesha Hamid & Omar Masood, 2011. "Selection criteria for Islamic home financing: a case study of Pakistan," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 3(2), pages 117-130, June.
    • Handle: RePEc:eme:qrfmpp:v:3:y:2011:i:2:p:117-130
    DOI: 10.1108/17554171111155357
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    References listed on IDEAS

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    1. Olson, Dennis & Zoubi, Taisier A., 2008. "Using accounting ratios to distinguish between Islamic and conventional banks in the GCC region," The International Journal of Accounting, Elsevier, vol. 43(1), pages 45-65, March.
    2. Hanudin Amin, 2008. "Choice criteria for Islamic home financing," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 1(3), pages 256-274, August.
    3. Jasim Al‐Ajmi & Hameeda Abo Hussain & Nadhem Al‐Saleh, 2009. "Clients of conventional and Islamic banks in Bahrain," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 36(11), pages 1086-1112, September.
    4. Bassam Maali & Peter Casson & Christopher Napier, 2006. "Social reporting by islamic banks," Abacus, Accounting Foundation, University of Sydney, vol. 42(2), pages 266-289, June.
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    1. Muhammad Ali & Syed Ali Raza & Chin-Hong Puah & Mohd Zaini Abd Karim, 2017. "Islamic home financing in Pakistan: a SEM-based approach using modified TPB model," Housing Studies, Taylor & Francis Journals, vol. 32(8), pages 1156-1177, November.
    2. Muhammad Y. Khan & Shahab Ud Din & Majid J. Khan & Anam Javeed, 2021. "Dynamics of selecting Islamic home financing," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5005-5016, October.
    3. Amina Hachimi & M. My Abdelouhab Salahddine, 2019. "The Acceptability of Participatory Banking Products by SMES: A Conceptual Framework," International Journal of Economics and Financial Issues, Econjournals, vol. 9(4), pages 259-266.
    4. Sayed Al-Hunnayan & Abdullah Al-Mutairi, 2016. "Attitudes of Customers towards Islamic Banks in Kuwait," International Journal of Business and Management, Canadian Center of Science and Education, vol. 11(11), pages 1-59, October.
    5. Amin, Hanudin & Abdul-Rahman, Abdul-Rahim & Abdul-Razak, Dzuljastri, 2009. "Is the Theory of Planned Behaviour Valid for Islamic home financing?," MPRA Paper 43179, University Library of Munich, Germany, revised 05 Sep 2011.
    6. Riaz, Umair & Burton, Bruce & Monk, Lissa, 2017. "Perceptions on Islamic banking in the UK—Potentialities for empowerment, challenges and the role of scholars," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 47(C), pages 39-60.
    7. Zeyad Saleem Ramadan, 2013. "Jordanian Criteria for Islamic Banks Selection. Evidence from the Jordanian Banking Sector," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 3(3), pages 139-145, July.
    8. Hajime Kamiyama & Kenichi Kashiwagi, 2019. "Factors affecting customers’ continued intentions to use Islamic banks," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 24(3), pages 59-68, December.
    9. Hasan, Syed Akif & Subhani, Muhammad Imtiaz & Osman, Ms. Amber, 2012. "Consumer Criteria for the Selection of an Islamic Bank: Evidence from Pakistan," MPRA Paper 40384, University Library of Munich, Germany.
    10. Muhammad Nazmul Hoque & Muhammad Khalilur Rahman & Jamaliah Said & Farhana Begum & Mohammad Mainul Hossain, 2022. "What Factors Influence Customer Attitudes and Mindsets towards the Use of Services and Products of Islamic Banks in Bangladesh?," Sustainability, MDPI, vol. 14(8), pages 1-19, April.

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