IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i8p4703-d793878.html
   My bibliography  Save this article

What Factors Influence Customer Attitudes and Mindsets towards the Use of Services and Products of Islamic Banks in Bangladesh?

Author

Listed:
  • Muhammad Nazmul Hoque

    (Accounting Research Institute, Universiti Teknologi MARA (UiTM), Shah Alam 40450, Malaysia)

  • Muhammad Khalilur Rahman

    (Faculty of Entrepreneurship and Business, Universiti Malaysia Kelantan, Pengkalan Chepa 16100, Malaysia)

  • Jamaliah Said

    (Accounting Research Institute, Universiti Teknologi MARA (UiTM), Shah Alam 40450, Malaysia)

  • Farhana Begum

    (Islamic Development Bank (IsDB), Ministry of Education, Dhaka 1205, Bangladesh)

  • Mohammad Mainul Hossain

    (Faculty of Arts and Social Sciences, University of Malaya, Kuala Lumpur 50603, Malaysia)

Abstract

This empirical paper aims at measuring customer attitudes concerning Islamic banking services and how they influence their behavioural intentions to utilise them. Islamic banking has been a fast-growing sector, offering products and services according to Sharia law. Despite being the preferred choice of banking, there is a high percentage of Muslim customers who have shifted from conventional to Islamic banking. Hence, this study aims to examine factors that influence them towards the use of Islamic banking. This is cross-sectional research, where data were collected using questionnaires. A total of 490 questionnaires were received back from adult individuals who were clients of Islamic banks. The data were analyzed using the partial least squares (PLS) method. The findings indicate that ethical organisation, Islamic values, and reputation significantly impact attitudes, whereas financial literacy has no significant impact on them. Attitude is strongly related to the behavioural intention to engage in Islamic banking services. The results also reveal that attitudes mediate the effect of Islamic values, ethical organisation, and reputation on the behavioural intention to engage in Islamic banking services, but Islamic financial literacy is not associated with customers’ behavioural mindset to enjoy such services. This study provides an example of initial empirical evidence from a Muslim majority country like Bangladesh on the relationship between Islamic values, ethical organization, Islamic financial literacy, and reputation and attitudes, which in turn lead to customers’ behavioural intentions to engage in services and products of Islamic banks.

Suggested Citation

  • 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.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:8:p:4703-:d:793878
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/8/4703/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/8/4703/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Muflih, Muhammad, 2021. "The link between corporate social responsibility and customer loyalty: Empirical evidence from the Islamic banking industry," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).
    2. Gama Putra Danu Sohibien & Lilis Laome & Achmad Choiruddin & Heri Kuswanto, 2022. "COVID-19 Pandemic’s Impact on Return on Asset and Financing of Islamic Commercial Banks: Evidence from Indonesia," Sustainability, MDPI, vol. 14(3), pages 1-13, January.
    3. Dean Karlan & Aishwarya Lakshmi Ratan & Jonathan Zinman, 2014. "Savings by and for the Poor: A Research Review and Agenda," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(1), pages 36-78, March.
    4. Jaffar Abbas & Iftikhar Hussain & Safdar Hussain & Sabahat Akram & Imrab Shaheen & Ben Niu, 2019. "The Impact of Knowledge Sharing and Innovation on Sustainable Performance in Islamic Banks: A Mediation Analysis through a SEM Approach," Sustainability, MDPI, vol. 11(15), pages 1-25, July.
    5. Deli Yuan & Muhammad Khalilur Rahman & Md. Abu Issa Gazi & Md. Atikur Rahaman & Mohammad Mainul Hossain & Shaharin Akter, 2021. "Analyzing of User Attitudes Toward Intention to Use Social Media for Learning," SAGE Open, , vol. 11(4), pages 21582440211, November.
    6. Hanudin Amin & Abdul Rahim Abdul Rahman & Dzuljastri Abdul Razak & Hamid Rizal, 2017. "Consumer attitude and preference in the Islamic mortgage sector: a study of Malaysian consumers," Management Research Review, Emerald Group Publishing Limited, vol. 40(1), pages 95-115, January.
    7. Ajzen, Icek, 1991. "The theory of planned behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 50(2), pages 179-211, December.
    8. Shen, Chung-Hua & Lin, Shih-Jie & Tang, De-Piao & Hsiao, Yu-Jen, 2016. "The relationship between financial disputes and financial literacy," Pacific-Basin Finance Journal, Elsevier, vol. 36(C), pages 46-65.
    9. Sarstedt, Marko & Hair, Joseph F. & Cheah, Jun-Hwa & Becker, Jan-Michael & Ringle, Christian M., 2019. "How to specify, estimate, and validate higher-order constructs in PLS-SEM," Australasian marketing journal, Elsevier, vol. 27(3), pages 197-211.
    10. Md. Alamgir Hossain & Most. Nirufer Yesmin & Nusrat Jahan & Minho Kim, 2021. "Effects of Service Justice, Quality, Social Influence and Corporate Image on Service Satisfaction and Customer Loyalty: Moderating Effect of Bank Ownership," Sustainability, MDPI, vol. 13(13), pages 1-13, July.
    11. Dean Karlan & Aishwarya Lakshmi Ratan & Jonathan Zinman, 2014. "Savings by and for the Poor: A Research Review and Agenda," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(1), pages 36-78, March.
    12. Nelson Lajuni & Winnie Wong Poh Ming & Yusman Yacob & Hiram Ting & Alfera Jausin, 2017. "Intention to Use Islamic Banking Products and Its Determinants," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 329-333.
    13. Gallego-Losada, Rocío & Montero-Navarro, Antonio & Rodríguez-Sánchez, José-Luis & González-Torres, Thais, 2022. "Retirement planning and financial literacy, at the crossroads. A bibliometric analysis," Finance Research Letters, Elsevier, vol. 44(C).
    14. Ling Peng & Geng Cui & Yuho Chung & Chunyu Li, 2019. "A multi-facet item response theory approach to improve customer satisfaction using online product ratings," Journal of the Academy of Marketing Science, Springer, vol. 47(5), pages 960-976, September.
    15. Maizaitulaidawati Md Husin & Asmak Ab Rahman, 2016. "Predicting intention to participate in family takaful scheme using decomposed theory of planned behaviour," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 43(12), pages 1351-1366, December.
    16. Ghosh, Saibal, 2016. "Political transition and bank performance: How important was the Arab Spring?," Journal of Comparative Economics, Elsevier, vol. 44(2), pages 372-382.
    17. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Muhammad Khalilur Rahman & Noor Raihani Zainol & Noorshella Che Nawi & Ataul Karim Patwary & Wan Farha Wan Zulkifli & Md Mahmudul Haque, 2023. "Halal Healthcare Services: Patients’ Satisfaction and Word of Mouth Lesson from Islamic-Friendly Hospitals," Sustainability, MDPI, vol. 15(2), pages 1-17, January.
    2. Dr. Mohamme Dulal Miath & Mohammed Ali Al Kindi, 2023. "Perception of Small and Medium Enterprises about Islamic Banks in Oman: Evidence from Survey Data," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(10), pages 1572-1585, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shaikh, Imran Mehboob & Noordin, Kamaruzaman & Alsharief, Ahmed, 2018. "Factors Influencing Customers’ Acceptance Towards Diminishing Partnership Home Financing: A Study of Pakistan," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 26, pages 63-86.
    2. Carlos Bazan, 2022. "Effect of the University’s Environment and Support System on Subjective Social Norms as Precursor of the Entrepreneurial Intention of Students," SAGE Open, , vol. 12(4), pages 21582440221, October.
    3. Geng, Xin & Janssens, Wendy & Kramer, Berber, 2018. "Liquid milk: Cash Constraints and Recurring Savings among Dairy Farmers in Kenya," 2018 Annual Meeting, August 5-7, Washington, D.C. 273823, Agricultural and Applied Economics Association.
    4. Prina, Silvia, 2015. "Banking the poor via savings accounts: Evidence from a field experiment," Journal of Development Economics, Elsevier, vol. 115(C), pages 16-31.
    5. Renata Baborska & Emilio Hernandez & Emiliano Magrini & Cristian Morales-Opazo, 2020. "The impact of financial inclusion on rural food security experience: A perspective from low-and middle-income countries," Review of Development Finance Journal, Chartered Institute of Development Finance, vol. 10(2), pages 1-18.
    6. Di Giannatale, Sonia & Roa, María José, 2016. "Formal Saving in Developing Economies: Barriers, Interventions, and Effects," IDB Publications (Working Papers) 8107, Inter-American Development Bank.
    7. Knar Khachatryan & Vardan Baghdasaryan & Valentina Hartarska, 2018. "Is the model loans-plus-savings better for microfinance in ECA? A PSM comparison," Working Paper c5a69366-4231-479c-879d-c, European Microfinance Network.
    8. Grohmann, Antonia & Klühs, Theres & Menkhoff, Lukas, 2018. "Does financial literacy improve financial inclusion? Cross country evidence," World Development, Elsevier, vol. 111(C), pages 84-96.
    9. Leandro De Magalhães & Dongya Koh & Raül Santaeulàlia-Llopis, 2016. "Consumption and Expenditure in Sub-Saharan Africa," Bristol Economics Discussion Papers 16/677, School of Economics, University of Bristol, UK, revised 07 Oct 2016.
    10. María José Roa García & Diana Mejía (ed.), 2018. "Decisiones financieras de los hogares e inclusión financiera: evidencia para América Latina y el Caribe," Investigación Conjunta-Joint Research, Centro de Estudios Monetarios Latinoamericanos, CEMLA, edition 1, volume 1, number 7sp, December.
    11. Khan, Ashraf & Hassan, M. Kabir & Paltrinieri, Andrea & Dreassi, Alberto & Bahoo, Salman, 2020. "A bibliometric review of takaful literature," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 389-405.
    12. Mirpourian, Mehrdad, 2020. "A Gendered Look at Savings Behavior among Nigerian Microsavers," MPRA Paper 103062, University Library of Munich, Germany.
    13. Nadine Muller & Shannon A McMahon & Jan-Walter De Neve & Alexej Funke & Till Bärnighausen & Elsa N Rajemison & Etienne Lacroze & Julius V Emmrich & Samuel Knauss, 2020. "Facilitators and barriers to the implementation of a Mobile Health Wallet for pregnancy-related health care: A qualitative study of stakeholders’ perceptions in Madagascar," PLOS ONE, Public Library of Science, vol. 15(1), pages 1-15, January.
    14. Alfiero, Simona & Battisti, Enrico & Ηadjielias, Elias, 2022. "Black box technology, usage-based insurance, and prediction of purchase behavior: Evidence from the auto insurance sector," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    15. Leandro DE MAGALHÃES & Dongya KOH & Räul SANTAEULILA-LLOPIS, 2019. "The Cost of Consumption Smoothing: Less Schooling and less Nutrition," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 85(3), pages 181-208, September.
    16. Mohamed Albaity & Mahfuzur Rahman, 2021. "Customer Loyalty towards Islamic Banks: The Mediating Role of Trust and Attitude," Sustainability, MDPI, vol. 13(19), pages 1-19, September.
    17. Abdullah J. Sultan, 2022. "Aligning employees’ work engagement and behavioral performance with internal branding: the missing link of employees’ perceived brand authenticity," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 27(1), pages 52-64, March.
    18. Steinert, Janina I. & Zenker, Juliane & Filipiak, Ute & Movsisyan, Ani & Cluver, Lucie D. & Shenderovich, Yulia, 2018. "Do saving promotion interventions increase household savings, consumption, and investments in Sub-Saharan Africa? A systematic review and meta-analysis," World Development, Elsevier, vol. 104(C), pages 238-256.
    19. Brune, Lasse & Kerwin, Jason T., 2019. "Income timing and liquidity constraints: Evidence from a randomized field experiment," Journal of Development Economics, Elsevier, vol. 138(C), pages 294-308.
    20. Nik Masdek Nik Rozana & Wong Kelly Kai Seng & Mohd Nawi Nolila & Sharifuddin Juwaidah & Wong Wang Li, 2023. "Antecedents of sustainable food waste management behaviour: Empirical evidence from urban households in Malaysia," Management & Marketing, Sciendo, vol. 18(1), pages 53-77, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:14:y:2022:i:8:p:4703-:d:793878. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.