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Service quality and the moderating effect of Shari’ah perception on client satisfaction: A comparison of Islamic and conventional microfinance in Pakistan

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  • Sarah Khan
  • Waheed Akhter
  • David McMillan

Abstract

Microfinance is an emerging concept which is improving the socioeconomic status of customers. This study assesses customer satisfaction of clients of Islamic and conventional microfinance providers using a sample of 578 clients i.e. 289 from each side. Akhuwat and Kashf (Islamic microfinance) and RCDS and DAMEN (conventional microfinance) are selected. The correlation, regression, ANOVA, and interaction tests are used for testing the relationship of Shari’ah perception as moderator between service quality and client satisfaction. The results indicate that Shari’ah perception acts as a strong moderator in case of Islamic microfinance whereas it is a weak moderator in case of conventional microfinance. The study concludes that Shari’ah perception is playing a vital role in enhancing the customer satisfaction in Islamic microfinance. It has important implications for policy-makers and Islamic microfinance providers to design Shari’ah awareness programs to enhance the Shari’ah perception of low income population.

Suggested Citation

  • Sarah Khan & Waheed Akhter & David McMillan, 2017. "Service quality and the moderating effect of Shari’ah perception on client satisfaction: A comparison of Islamic and conventional microfinance in Pakistan," Cogent Economics & Finance, Taylor & Francis Journals, vol. 5(1), pages 1315206-131, January.
    • Handle: RePEc:taf:oaefxx:v:5:y:2017:i:1:p:1315206
    DOI: 10.1080/23322039.2017.1315206
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    References listed on IDEAS

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    7. Nicoletta Ferro, 2005. "Value Through Diversity: Microfinance and Islamic Finance and Global Banking," Working Papers 2005.87, Fondazione Eni Enrico Mattei.
    8. Andreas Jobst, 2007. "The Economics of Islamic Finance and Securitization," IMF Working Papers 2007/117, International Monetary Fund.
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    Cited by:

    1. 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.

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