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An analysis of the religious, social factors and income’s influence on the decision making in Islamic microfinance schemes

An analysis of the religious, social factors and income’s influence on the decision making in... Islamic microfinance schemes are designed and developed with the primary intention of poverty alleviation and fulfillment of the Islamic law requirements. The purpose of this study is to investigate the effects of religiosity, religious leader’s endorsement, social influence and income on the intention to apply for Islamic microfinance among Muslims in Malaysia.Design/methodology/approachThis study is based on a public survey to collect primary data from various states in Malaysia. Then, structural equation modelling (SEM) was used to analyse the data set.FindingsThe results of SEM indicate significant roles for religiosity and religious leader’s endorsement as religion-based factors on intention to apply for microfinance products. Moreover, social influence (peer-pressure) is influential on the financial decision-making process. The authors also examined the moderation effect of gender on these relations and found that females, in comparison to males, tend to be more influenced by religious leader’s endorsement and social influence. On the other hand, male with higher religiosity tend to favour Islamic microfinance products more than females.Originality/valueFindings of this study are new in many aspects, most importantly as it sheds light into the role of religiosity and religious leader’s endorsement on the decision-making process in microfinancing services. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Islamic Accounting and Business Research Emerald Publishing

An analysis of the religious, social factors and income’s influence on the decision making in Islamic microfinance schemes

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References (41)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1759-0817
DOI
10.1108/jiabr-03-2016-0035
Publisher site
See Article on Publisher Site

Abstract

Islamic microfinance schemes are designed and developed with the primary intention of poverty alleviation and fulfillment of the Islamic law requirements. The purpose of this study is to investigate the effects of religiosity, religious leader’s endorsement, social influence and income on the intention to apply for Islamic microfinance among Muslims in Malaysia.Design/methodology/approachThis study is based on a public survey to collect primary data from various states in Malaysia. Then, structural equation modelling (SEM) was used to analyse the data set.FindingsThe results of SEM indicate significant roles for religiosity and religious leader’s endorsement as religion-based factors on intention to apply for microfinance products. Moreover, social influence (peer-pressure) is influential on the financial decision-making process. The authors also examined the moderation effect of gender on these relations and found that females, in comparison to males, tend to be more influenced by religious leader’s endorsement and social influence. On the other hand, male with higher religiosity tend to favour Islamic microfinance products more than females.Originality/valueFindings of this study are new in many aspects, most importantly as it sheds light into the role of religiosity and religious leader’s endorsement on the decision-making process in microfinancing services.

Journal

Journal of Islamic Accounting and Business Research – Emerald Publishing

Published: Jan 20, 2020

Keywords: Islamic microfinance; Social influence; Religiosity; Microfinance; Financial decision-making; Religious leader’s endorsement

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