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Customers’ Perceptions Of Islamic Hire-Purchase Facility In Malaysia: An Empirical Analysis

Author

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  • Nurdianawati Irwani Abdullah
  • Asyraf Wajdi Dusukib

Abstract

One of the latest innovative products of Islamic banks is the Islamic hirepurchase facility or Al-IjOErah Thumma al-Bayc (AITAB) which is designed to meet the current demand and avoid certain risks in the financing of consumer durables and motor vehicles. AITAB can be utilized to finance a wide range of assets, either for individual or corporate customers. This paper presents empirical evidence on the customers’ perception of AITAB. A country-wide questionnaire survey has been conducted on 203 AITAB customers, aiming at eliciting their awareness and perception of AITAB facility. Overall, the results provide a strong signal to the bankers that efforts need to be intensified in educating the public about the distinctive characteristics of AITAB and how it may suit the interest of customers in financing their assets. There is a huge potential for AITAB to be marketed to various segments of customers comprising those who are concerned with the legitimacy of the facility, and those who seek convenience and less complicated transactions.

Suggested Citation

  • Nurdianawati Irwani Abdullah & Asyraf Wajdi Dusukib, 2006. "Customers’ Perceptions Of Islamic Hire-Purchase Facility In Malaysia: An Empirical Analysis," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 14(2), pages 177-204, December.
  • Handle: RePEc:ije:journl:v:14:y:2006:i:2:p:177-204
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    File URL: http://www.iium.edu.my/enmjournal/142art3.pdf
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    Keywords

    Islamic hire-purchase; Customers’ perceptions; Customer satisfaction.;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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