Abstract
Purpose This paper aims to investigate the contribution of attitude, subjective norm and religiosity on the intention to adopt Islamic banking in an emerging economy like Uganda, which is a secular state that is in the early stages of adopting Islamic banking. Design/methodology/approach This study uses a cross-sectional and correlational research design. Usable questionnaires were received from 258 managers of their own micro businesses. A hierarchical regression analysis was used to test the hypotheses. Findings Results indicate that attitude and religiosity are significant determinants of the intention to adopt Islamic banking, unlike subjective norm whose predictive power is subsumed in attitude. In the absence of attitude, subjective norm is a significant determinant of intention to adopt Islamic banking. Overall, attitude, subjective norm and religiosity explain 44 per cent of the variance in the intention to adopt Islamic banking in Uganda. Research limitations/implications This study is cross-sectional, excluding the monitoring of changes in behavior over time. Further, the study used evidence from owner-managed micro businesses in Uganda. It is possible that these results are only applicable to Uganda’s micro businesses. Originality/value Islamic banking is an emerging phenomenon on the African continent, especially in Sub-Saharan Africa, where most countries are secular states. As such, there are largely no empirical studies exploring the combined contributions of attitude, subjective norm and religiosity on the intention to adopt Islamic banking in an emerging economy after the national adoption of an enabling legal framework. To the best of the researchers’ knowledge, this is the first study that carries out this task.
Highlights
Islamic banking has been widely embraced among Muslims and by non-Muslim countries globally
The standard deviation for attitude, subjective norm, religiosity and intention to adopt Islamic banking are small as compared to their mean values, and the statistical means are a good fit of the observed data
Summary and conclusion The objective of this study was to establish the contribution of attitude, subjective norm and religiosity on intention to adopt Islamic banking in Uganda
Summary
Islamic banking has been widely embraced among Muslims and by non-Muslim countries globally. Islamic banking products and services have gained popularity in nonMuslim countries like the UK, Russia, the USA, Argentina, Australia, India, Philippines, Senegal, South Africa, Switzerland, Thailand, Denmark, Germany, Guinea, Niger, Nigeria as well as Muslim-majority countries (Abdullah et al, 2012; Lujja et al, 2016a). Reception of the Islamic banking system in those countries is attributed to subjective factors like awareness, reputation, the perceived benefit of finance without fixed interest rates and its stable nature (Jamshidi and Hussin, 2013; Kaawaase and Nalukwago, 2017). In Uganda, the law regulating commercial banks, the Financial Institutions Act 2004, was amended with the enactment of the Financial Institutions (Amendment) Bill 2015 on 6 January 2016. The law permitting Islamic banking services was duly passed, and in February 2018, the financial institution regulations aimed at operationalizing Islamic banking were released to the public
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