Effects of demographic factors on women’s participation in the Islamic microfinance scheme: an analysis using the theory of bounded rationality

Purpose - The purpose of this paper is to identify the factors that influence the individual bounded rationality of the rural poor toward participation in borrowing from rural development scheme (RDS). Specifically, how do respondents’ demographic variables such as gender, age, education, income and religion affect their attitude, subjective norms (SNs) and perceived behavioral control (PBC) to influence bounded rationality toward actual participation in borrowing the Islamic funds from RDS? Design/methodology/approach - To answer these questions, the theory of bounded rational planned behavior as its basis was established. Data (n= 375) were collected from rural women clients of RDS based on snow-balling sampling technique. Data were analyzed following the procedure of structural equation modeling. Findings - The results indicate that all the demographic variables except education influence attitudes, SNs and PBC in turn influence the individual respondents’ bounded rational intention toward participation in RDS. Research limitations/implications - The sample was not randomly drawn to represent a population to which findings could be generalized. Instead, it was a snow-balling sample, and as such, the ability to generalize the findings very far beyond the sample is limited. Practical implications - This paper implies that respondents’ socioeconomic characteristics are important to consider changing individual subjective rationality of human being toward performing actual behavior. Social implications - Social implications refer that rural women in Bangladesh are positively and subjectively motivated toward bounded rational intention and participation in RDS. Originality/value - This research is based on the primary data collected from the participants in an Islamic microfinance institute called RDS. This paper draws on several insights about the participation behavior of the rural poor in Bangladesh.