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The Acceptance of Islamic Banking Products in Libya: A Theory of Planned Behavior Approach

Author

Listed:
  • Walid Ali Albashir

    (Faculty of Industrial Management, University Malaysia Pahang, Gambang, Kuantan, Malaysia)

  • Yuserrie Zainuddin

    (Faculty of Industrial Management, University Malaysia Pahang, Gambang, Kuantan, Malaysia,)

  • Shrikant Krupasindhu Panigrahi

    (Faculty of Industrial Management, University Malaysia Pahang, Gambang, Kuantan, Malaysia)

Abstract

The purpose of this paper is to identify key factors affecting acceptance level of Islamic banking customers in Libya. Despite of growth of Islamic banking all over the world, it is still underdeveloped financial sector in Libya. Libyan customers are unaware of Islamic banking and are unable to make decision on the acceptance of Islamic banking. We suggest a modified theory of planned behaviour model including perceived risk as an important ingredient to customer decision making process. The model is tested against a sample of 293 banking customers using self-administered survey questionnaire. The quantitative results revealed that subjective norm and perceived behavioural control are more significant to increase intention to use Islamic banking. Customer attitude and perceived risk was found to have no significant influence on intention to accept Islamic banking at 0.05 level. This research suggests that Islamic banks need to develop effective marketing strategy emphasizing on sharia instrument like Islamic assurance and beliefs along with perceived risk to satisfy the value of potential customers. As an implication, focusing on risk management while providing quality information to the customers towards Islamic banking products will lead to increase customer's intention.

Suggested Citation

  • Walid Ali Albashir & Yuserrie Zainuddin & Shrikant Krupasindhu Panigrahi, 2018. "The Acceptance of Islamic Banking Products in Libya: A Theory of Planned Behavior Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 8(3), pages 105-111.
    • Handle: RePEc:eco:journ1:2018-03-13
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    References listed on IDEAS

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    Cited by:

    1. Mohammad Enamul Hoque & M. Kabir Hassan & Nik Mohd Hazrul Nik Hashim & Tarek Zaher, 2019. "Factors affecting Islamic banking behavioral intention: the moderating effects of customer marketing practices and financial considerations," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 24(1), pages 44-58, June.

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    More about this item

    Keywords

    Islamic Banking; Theory of Planned Behavior; Behavioral Intention; Perceived Risk; Customer Involvement;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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