Impacts of service quality on future intentions of loan purchase under the mediating of borrowers’ bank image and moderating Fatwa and Sharia supervisory board reputation

Abstract

The purpose of this study is to test the moderating role of fatwa and Sharia supervisory board unit reputation in the relationship between service quality dimensions and borrowers’ bank image. It will also assess the mediating role of borrowers’ bank image in the relationship between service quality dimensions and future purchase intentions of loans. Questionnaire surveys are used to collect data by convenience sampling from the loan borrowers in Saudi Arabian Islamic banks. Structural equation modeling was performed to analyze 370 usable responses. The study finds that service quality dimensions have varying effects on loans future purchase intentions, the borrowers’ bank image fully and partially mediates the relationship between service quality dimensions and loans future purchase intentions (LFPI), and the fatwa and Sharia supervisory board reputation moderating the influence of service quality responsiveness on borrowers’ bank image. Bank image and fatwa and Sharia supervisory board reputation influences on future purchase intention were assessed by personal loan borrowers, and future studies could be conducted on other bank loan borrowers (corporate) according to their difference in the goal of loaning. The bank managers should be aware of the fatwa board's reputation influences on borrowers’ bank image and loan future purchase intentions. This research adds to the existing body of reputation and image management literature in the Islamic banking context by comprehending how specified service quality dimensions can improve the borrowers’ bank image and increase loan purchase intentions. The study is the first attempt to discover empirical support to the role of fatwa and Sharia supervisory board reputation in increasing the bank’s image and loans future purchase intentions at Islamic banks.