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Selection criteria for Islamic home financing: a case study of Pakistan

  • Ayesha Hamid
  • Omar Masood
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    Purpose – The aim of this research is to examine the selection criteria of customers for Islamic home financing in the context of Pakistan and to examine these factors with respect to gender, age, income, and occupation. Design/methodology/approach – This study uses a quantitative approach to investigate the choice criteria for Islamic home financing. All 18 independent variables are taken from previous research; for their analysis, descriptive statistics, independent sample t-tests and ANOVA was used. Data were gathered from the customers of Islamic banking who use the services of Islamic home financing. The sample consists of 200 respondents. For the collection of data, a survey questionnaire with closed-ended questions and a five-point Likert scale was employed. The questionnaire was designed into two sections, one consisting of demographic information and the second relating to the selection criteria of Islamic home financing. Findings – The results indicate that the shariah principle, fast and efficient services, price, bank reputation, and terms and conditions of product flexibility are the five most important factors considered by customers in choosing Islamic mortgages. Research limitations/implications – The limitations relate to the sample area for the study, which is confined to Lahore, and due to the limited sample size, the findings cannot be generalized. Second, only four banks are considered. Practical implications – This study is beneficial for practitioners in Pakistan by offering insight into choice criteria for Islamic home financing. The results should also be useful for Islamic bank managers who are also policy makers, as they can study and plan for attractive schemes and policies for customers through which they can fulfill their needs and expectations. For the researcher, this study will also add to the existing body of knowledge by providing novel evidence on the selection criteria used for Islamic home financing. Originality/value – This topic has never been examined in the context of Pakistan, so this study initiates the choice criteria for Islamic home financing among Pakistani banks' customers. The paper provides potentially useful information for both customers (in selecting Islamic banks) and bank managers to identify the factors needed to attract customers.

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    Article provided by Emerald Group Publishing in its journal Qualitative Research in Financial Markets.

    Volume (Year): 3 (2011)
    Issue (Month): 2 (June)
    Pages: 117-130

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    Handle: RePEc:eme:qrfmpp:v:3:y:2011:i:2:p:117-130
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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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    1. Bassam Maali & Peter Casson & Christopher Napier, 2006. "Social reporting by islamic banks," Abacus, Accounting Foundation, University of Sydney, vol. 42(2), pages 266-289.
    2. Hanudin Amin & Mohamad Rizal Abdul Hamid & Suddin Lada & Ricardo Baba, 2009. "Cluster analysis for bank customers' selection of Islamic mortgages in Eastern Malaysia: An empirical investigation," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing, vol. 2(3), pages 213-234, August.
    3. Jasim Al-Ajmi & Hameeda Abo Hussain & Nadhem Al-Saleh, 2009. "Clients of conventional and Islamic banks in Bahrain: How they choose which bank to patronize," International Journal of Social Economics, Emerald Group Publishing, vol. 36(11), pages 1086-1112, October.
    4. Olson, Dennis & Zoubi, Taisier A., 2008. "Using accounting ratios to distinguish between Islamic and conventional banks in the GCC region," The International Journal of Accounting, Elsevier, vol. 43(1), pages 45-65, March.
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