DETERMINANTS OF CUSTOMERS' INTENTION TO USE ISLAMIC PERSONAL FINANCING: THE CASE OF MALAYSIAN ISLAMIC BANKS

Published by the Journal of Islamic Accounting and Business Research, Volume 2, No 1, pp. 22-42

The Authors

Hanudin Amin, Abdul Rahim Abdul Rahman, Stephen Laison Sondoh Jr, Ang Magdalene Chooi Hwa

Labuan School of International Business and Finance, Universiti Malaysia Sabah, Labuan, Malaysia and Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Kuala Lumpur, Malaysia

Abstract

Purpose – Islamic banking and finance is an emerging global industry founded on Islamic ethical precepts. Just as in the case of conventional banks, Islamic banks are expected to offer products that consider the needs of their customers. The present study investigates the effects of the following factors: attitude; social influence; religious obligation; government support; and pricing, on the intention to use Islamic personal financing.

Design/methodology/approach – The sample comprised of 150 customers of two fully fledged Islamic banks in Malaysia: Bank Islam Malaysia Berhad and Bank Muamalat Malaysia Berhad. Data were obtained through a face-to-face survey using semi-structured questionnaire. Out of a total of 150 responses, only 136 responses were usable for further analysis. The study used factor analysis, correlation and regression to analyse the data.

Findings – The study found three determinants to be significant in influencing the intention to use Islamic personal financing, namely, attitude, social influence and pricing of Islamic personal financing. Religious obligation and government support were found to be insignificant predictors.

Research limitations/implications – The first limitation of the study is the narrow focus of the survey on the customers of two fully fledged Islamic banks. The second limitation of this work concerns the measurement employed to gauge bank customers' acceptance of Islamic personal financing. Despite these limitations, the findings of this study provide invaluable insights into factors affecting the bank customers' intention to use Islamic personal financing, especially in the case of Malaysian Islamic banks.

Originality/value – This empirical study on the determinants of Islamic financing using the survey method contributes towards a better understanding of the customers' expectations for Islamic financial products. Managers of Islamic banks can now comprehend better the factors that influence bank customers' decision in patronizing Islamic personal financing. Hence, more effective strategies can be recommended to attract bank customers to use Islamic personal financing. Not to mention, the findings of this study should be of value to Islamic banks in terms of expanding their customer base.

Article Type:Research paper

Keyword(s):Islam; Personal finance; Banks; Consumer behaviour; Malaysia.

FACTORS AFFECTING THE DECISIONS OF TABUNG HAJI CUSTOMERS IN MALAYSIA TO USE ATM BANKING: AN EMPIRICAL INVESTIGATION

JOURNAL.:

Hanudin Amin

Labuan School of International Business and Finance

Universiti Malaysia Sabah

Journal of Internet Banking and Commerce, Vol 15(2)

(URL: http://www.arraydev.com/commerce/jibc/articles.htm)

Abstract

The aim of this paper is to provide a preliminary investigation of the factors that determine whether Malaysia’s Tabung Haji customers in Eastern Malaysia will use or not a new facility introduced by the institution, namely Automated Teller Machine or ATM banking. As such, this study introduces the concept Tabung Haji ATM Banking (TAB). In order to explain the factors, this paper extends the applicability of the technology acceptance model (TAM) to TAB and includes “perceived credibility (PC)”, and “perceived religiosity (PR)”, in addition to “perceived usefulness (PU)” and “perceived ease of use (PEOU)”. The results indicate that PU, PEOU, PC and PR are the key determinants to predicting the intentions to use TAB. In addition, PEOU is significantly associated with PU, which, in turn, affecting usage intention among Tabung Haji customers on TAB. This study suffers from two limitations, first is on its location of study and, second is on its limited number of measures suggested in the modified model for the study. Nevertheless, these limitations provide directions for the future study and also provide new information in a new introduced financial innovation at Tabung Haji. The results will be primarily of benefit to Tabung Haji since this study offers insights on the intentions of its customers to use TAB.

Keywords: Personal finance; Tabung Haji; Technology acceptance model; Research study; Malaysia

FULL PAPER

SMS BANKING: EXPLAINING THE EFFECTS OF ATTITUDE, SOCIAL NORMS AND PERCEIVED SECURITY AND PRIVACY

JOURNAL.:

Hanudin Amin
Labuan School of International Business and Finance
Universiti Malaysia Sabah

T. Ramayah
School of Management
Universiti Sains Malaysia

The Electronic Journal of Information Systems in Developing Countries, Vol 41 (2010)

(URL: http://www.ejisdc.org/ojs2/index.php/ejisdc)

Abstract

This study aims to investigate the factors influencing the use of short-messaging-service (SMS) banking among Malaysian bank customers. It focuses on the relationships among attitude, subjective norm, perceived security and privacy (PSP) and intention to use SMS banking. We collected 115 valid survey responses. The data indicate that attitude, subjective norm, and PSP are influential predictors of intention to use SMS banking. Corresponding discussion and implications are included.

FULL PAPER

OFFSHORE BANKERS' PERCEPTION ON ISLAMIC BANKING NICHE FOR LABUAN: AN ANALYSIS

JOURNAL.:

Published in the

International Journal of Commerce and Management

(Emerald Group Publishing, the UK), Vol. 19 No.4, pp.293-308

Ricardo Baba

Faculty of Business and Economics, Universiti Malaysia Sarawak

Hanudin Amin

Labuan School of International Business and Finance, Universiti Malaysia Sabah

Abstract

Purpose – The purpose of this paper is to detail the findings of a study to determine the viability of Islamic banking as a niche for the Labuan International Offshore Financial Center (IOFC). Labuan was declared an IOFC by the Malaysian Government in 1990, with the goal of developing it as a financial “supermarket” offering a wide range of offshore financial products specializing in Islamic finance.
Design/methodology/approach – The paper employs the mail survey method to ensure the anonymity of the respondents and the whole population of banks are used, which enables the researchers to ignore the problems of bias in the sampling. Data collected from the survey are analyzed using descriptive statistics, mean, standard deviation, and frequency counts.
Findings – The results of the survey indicate that Labuan offshore bankers do not have a clear notion of Islamic banking principles and practices. The results also show that most of the offshore banks do not have officers and staff who are conversant with Islamic banking. Nevertheless, conventional offshore banks are willing to train their officers in Islamic banking skills and participate in future Islamic deals. The findings also indicate that Islamic banking is a viable niche for the Labuan IOFC. However, the results also show that Labuan does not have competitive advantages over Bahrain and London, currently the leading Islamic finance centers in the world.
Research limitations/implications – There are three major limitations of this paper. These limitations are further explained in the conclusion's part.
Practical implications – There are three major implications of these findings. First, the authorities ought to enhance the knowledge and expertise of the conventional offshore bankers by facilitating training in Islamic banking skills. Acquisition of such knowledge and skills would encourage them to participate in future Islamic banking deals. Second, the industry and the authorities responsible for the IOFC have to be both innovative and creative. In order to convince conventional offshore bankers that Islamic banking is a viable alternative to conventional banking the products and services offered must be seen as value added. A creative tax regime should have a substantial impact in terms of increased profit margin or reduced cost on the part of the offshore banks. Third, improving the physical infrastructure and overcoming the geographical location disadvantage of Labuan should become the priority of the authorities overseeing the development of Labuan as an IOFC.
Originality/value – The paper provides fresh results on the viability of Islamic banking operations in Labuan IOFC.
Article Type: Research paper
Keyword(s): Islam; Malaysia; Perception; International banks.

WHAT MAKES UNDERGRADUATE STUDENTS ENROLL INTO AN ELECTIVE COURSE? THE CASE OF ISLAMIC ACCOUNTING

JOURNAL.:

International Journal of Islamic and Middle Eastern Finance and Management

2009, Vol. 2 No.4, pp. 289-304

Hanudin Amin
Labuan School of International Business and Finance, Universiti Malaysia Sabah

Abdul Rahim Abdul Rahman

Department of Accounting, Faculty of Economics and Management Sciences,

International Islamic University Malaysia

T. Ramayah

School of Management, Universiti Sains Malaysia

Abstract

Purpose – The main purpose of this paper is to investigate the acceptance level of Islamic accounting course by undergraduate students at the Universiti Malaysia Sabah (UMS). The study used theory of reasoned action (TRA) to analyze the findings. Design/methodology/approach – The primary data for the study are collected using self-administered questionnaires. Altogether, the sample comprised of 135 respondents. Data are analyzed using statistical package for social science 13.0 and Analysis of Moment Structures 7.0 to determine the acceptance level and model fit. Findings – Attitude (ATT), subjective norm (SN), and amount of information on Islamic accounting (AIIA) are found to affect the intention of students to enroll in the Islamic accounting course. Other proposed hypotheses are also supported. Research limitations/implications – The study limitations are confined to three only. The first limitation is the narrow focus on one University in Malaysia as a case study. The second is about its limited relevant measures used in the model that may potentially support the acceptance. The third is about the lack of adequate sample of non-Muslim students. Nevertheless, these limitations drive for the future research in the area of Islamic accounting. Practical implications – Despite its limitations, this study is still of importance in providing insights on a particular issue. The findings of this study shed some light on the students’ acceptance level of an Islamic course. This course is unique as it is different in orientation compared to other existing courses on offer. This paper also provides an invaluable insight, especially in the case of UMS, to consider Islamic accounting course as a core course in the future instead of only an elective course. The university’s management should consider the importance of students’ ATT, SN, and AIIA prior to offering the course. Originality/value – This paper examines undergraduate students’ acceptance level of an Islamic accounting course using TRA and highlights the factors affecting the acceptance of students of an Islamic accounting course in a Malaysian higher learning institution.

CLUSTER ANALYSIS FOR BANK CUSTOMERS' SELECTION OF ISLAMIC MORTGAGES IN EASTERN MALAYSIA: AN EMPIRICAL INVESTIGATION

JOURNAL.:

International Journal of Islamic and Middle Eastern Finance and Management

2009, Vol. 2 No.3, pp. 213-234

Hanudin Amin, Mohamad Rizal Abdul Hamid, Suddin Lada, Ricardo Baba

Labuan School of International Business and Finance, Universiti Malaysia Sabah

Abstract

Purpose – The purpose of this paper is to explore the reasons behind customers' selection of Islamic mortgage in Sabah, Malaysia and present factor and cluster analyses to identify the importance of choice criteria for Islamic mortgage selection. The choice criteria among Sabahans are investigated along with their gender, age group, religion, monthly income, and ethnicity. Design/methodology/approach – A total of 250 bank customers responded to a survey addressing the choice criteria for Islamic mortgage providers. It is important to address the criteria in order to make sure the service providers are able to come up with attractive package of Islamic home financing to their prospective customers. Of these, only 211 questionnaires are usable, which gives us a response rate of 84.4 percent. No extra efforts are conducted in order to increase the number of respondents. Non-probability, convenience sampling is implemented. This paper uses a quantitative study similar to what employed by Lymperopoulos et al. and by Devlin. Frequencies, descriptive, factor and cluster analyses are used to analyze the data. Findings – A cluster analysis indicates that bank customers can be divided into three clusters. Members of cluster 1 reported a tendency to select mortgage bank on the basis of “service provisions” while the members of cluster 2 reported a tendency to select mortgage bank on the basis of “elements of Shariah and Islamic principles.” While those of members in the cluster 3, almost entirely had lower mean scores as compared to other clusters. Nevertheless, the members of this cluster reported a greatest tendency to choose Islamic mortgage provider on the basis of “pricing.” Research limitations/implications – The paper has addressed three limitations that provide opportunities for other researchers to explore them in depth in the future in the similar field of Islamic home financing. The limitations are presented in the conclusion's part. Practical implications – With regard to implications, this paper offers inputs for management decision among Islamic mortgage providers (i.e. Islamic banking institutions such as full-fledged Islamic banks, conventional banks with Islamic windows and conventional banks with Islamic subsidiaries). In addition, this paper adds to the literature in the area of home loans/financing. Originality/value – This paper offers the choice criteria for Islamic mortgage providers provides useful information on the Islamic mortgage providers' selection among Sabahans. This paper indeed provides useful information on the main choice criteria that affect why Sabahan choose Islamic mortgage providers.

AN ANALYSIS OF ONLINE BANKING USAGE INTENTIONS: AN EXTENSION OF THE TECHNOLOGY ACCEPTANCE MODEL

JOURNAL.:

International Journal of Business and Society

2009, Vol. 10 No. 1, pp.27-40

Hanudin Amin

Labuan School of International Business and Finance, Universiti Malaysia Sabah

Abstract

This study is aimed at investigating the factors influencing the online banking acceptance in Kota Kinabalu, Northern Borneo, Malaysia. In term of design/methodology/approach -this study applies technology acceptance model (TAM) as a reference in order to investigate the online banking acceptance. For this purpose, a linear regression is employed to examine the factors influencing online banking acceptance. The model employs perceived credibility, perceived enjoyment, and social norm, in addition to perceived usefulness and perceived ease of use. Findings - the study results suggest that perceived usefulness, perceived ease of use, perceived credibility and social norm are statistically significant while perceived enjoyment are statistically insignificant. Research limitations/ implications – due to the time and cost constraints, the present study has suffered from the two setbacks. On one hand, the sample of the study somewhat limits generalizations. On the other hand, other potential variables are not included in the model. Essentially, this study offers an insight into online banking in Kota Kinabalu, Northern Borneo, Malaysia, which has limited previously been investigated. Indeed, the results useful to banks planning further online banking. Worthily to say, the study is able to contribute to the literature on online banking in Kota Kinabalu, Northern Borneo, Malaysia.

Keywords: Online banking, Kota Kinabalu, Sabah, Banks, Technology acceptance model (TAM)