A CLUSTER ANALYSIS AMONG MALAYSIANS FOR ISLAMIC DEPOSIT PRODUCTS

Published by the
Journal of Islamic Banking and Finance
Volume - 28, Number - 3, July-Sept 2011
pp.58-74

The authors

Hanudin Amin and Mohd Zulkifli Muhammad

Labuan School of International Business and Finance

Universiti Malaysia Sabah

Abstract

The aim of this study is to obtain a better understanding of student’s selection criteria with respect to Islamic deposit products. The study presents primary data collected by self-administered questionnaires involving a sample of 154 undergraduate students in Labuan, Malaysia. Findings of the study are classified into six clusters. For cluster 1, members of this cluster were likely choose Islamic deposit products on the basis of “friendliness of banks’ staff” but not to “availability of ATM in several locations”. For cluster 2, members of this cluster expressed the greatest tendency on “availability of ATM in several locations” when selecting Islamic deposit products. For cluster 3, members of this cluster seem to have lower preference with respect to selection criteria for Islamic deposit products. For cluster 4, members of this cluster expressed a tendency to choose Islamic deposit products on the basis of “gift reward” and “family influences”. Further, members of cluster 5 were likely choose Islamic deposit products on the basis of “availability of ATM in several locations” but not to “family influences”. Finally, for cluster 6, members of this cluster preferred to choose Islamic deposit products when the rate of return offered for the products is higher. The results are primarily of its potential to bank managers who might want to bring forward specific Islamic deposit products policies for different target groups. The managers could use the outcomes of the current study for better planning of Islamic deposit products.

Keywords – Deposit products, Islamic bank, Choice Criteria, Frequency analysis, Cluster analysis, Malaysia.