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Islamic home financing in Pakistan: a SEM-based approach using modified TPB model

Author

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  • Muhammad Ali
  • Syed Ali Raza
  • Chin-Hong Puah
  • Mohd Zaini Abd Karim

Abstract

The present study attempts to examine the Islamic home financing using the modified theory of planned behavior model (TPB). Sample data of 375 are conveniently drawn from walk-in customers of Islamic banks located in the biggest city Karachi. This study employed both exploratory factor analysis and confirmatory factor analysis to confirm the validity and reliability of the measurement model. The modified theoretical framework was examined by applying the structural equation modeling using frequently reported goodness-of-fit indices. The findings indicate that the original constructs of TPB model, attitude (ATT), subjective norm (SN) and perceived behavioral control has a positive and significant impact on the customer intention to use Islamic home financing. Furthermore, ATT is found to be the most influential factor in determining the customer intention toward Islamic home financing. On the other hand, we introduced two new factors, pricing on home financing (PHF) and religious belief (RB), which proved their presence in the TPB model by showing a significant impact on the customer intention to use the facility of home financing. In addition, PHF has a negative impact while religious belief has a positive relationship with the customer intention to use Islamic home financing in Pakistan. This study also suggests that the standard TPB model is successfully modified by introducing PHF and RB factors. Therefore, Islamic bank managers should consider this study to promote the Islamic home financing facility in Pakistan.

Suggested Citation

  • Muhammad Ali & Syed Ali Raza & Chin-Hong Puah & Mohd Zaini Abd Karim, 2017. "Islamic home financing in Pakistan: a SEM-based approach using modified TPB model," Housing Studies, Taylor & Francis Journals, vol. 32(8), pages 1156-1177, November.
    • Handle: RePEc:taf:chosxx:v:32:y:2017:i:8:p:1156-1177
    DOI: 10.1080/02673037.2017.1302079
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    References listed on IDEAS

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    Cited by:

    1. Muhammad Y. Khan & Shahab Ud Din & Majid J. Khan & Anam Javeed, 2021. "Dynamics of selecting Islamic home financing," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5005-5016, October.
    2. Muhammad Ali & Syed Ali Raza & Chin-Hong Puah & Muhammad Shujaat Mubarik, 2023. "Customer acceptance toward Islamic personal financing in Pakistan," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(2), pages 270-284, June.
    3. Ali, Muhammad, 2015. "Bank profitability and its determinants in Pakistan: A panel data analysis after financial crisis," MPRA Paper 67987, University Library of Munich, Germany, revised 01 Nov 2015.
    4. Abdullah Mesut UÇAR, 2020. "A Research on Consumer Behavior Towards Interestfree Financing with Special Reference to Planned Behavior Theory: An Empirical Analysis," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 7(1), pages 69-88, January.
    5. Raza, Syed Ali & Shah, Nida & Nisar, Wasay, 2019. "Consumer Buying Behavior of Organic Food with Respect to Health and Safety Concerns among Adolescents," MPRA Paper 93570, University Library of Munich, Germany.
    6. Muhammad Ali; Khalid M. Iraqi; Amna Sohail Rawat; Shoaib Mohammad, 2018. "Role of Customer Service Skills on Customer Satisfaction and Its Effects on Customer Loyalty in Pakistan Banking Industry," South Asian Journal of Management Sciences (SAJMS), Iqra University, Iqra University, vol. 12(2), pages 210-223, Fall.
    7. Raza, Syed Ali & Shah, Nida, 2017. "Influence of the Big Five personality traits on academic motivation among higher education students: Evidence from developing nation," MPRA Paper 87136, University Library of Munich, Germany.
    8. Muhammad Ali, 2016. "Bank Profitability and its Determinants in Pakistan: A Panel Data Analysis after Financial Crisis," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 1(1), pages 1-14, March.

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    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G3 - Financial Economics - - Corporate Finance and Governance
    • Z0 - Other Special Topics - - General

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