Involvement of micro, small and medium entrepreneurs (MSMEs) in takaful in Sri Lanka: an extension of theory of planned behaviour

Abstract

PurposeThis study aims to investigate the factors affecting micro, small and medium entrepreneurs’ (MSMEs) behavioural intention to participate in takaful schemes in Sri Lanka.Design/methodology/approachThis research adopted a quantitative approach using primary data from a questionnaire. Out of 470 questionnaires, 432 were collected (91.91%) from MSMEs in Kalmunai business region in Sri Lanka. The data obtained were analysed using partial least square-structural equation modelling.FindingsThis study revealed that the extension model of the theory of planned behaviour (TPB) can be effectively applied to behavioural intentions towards a takaful scheme by MSMEs. Out of eight hypotheses, seven were significant, including: attitude towards behavioural intention; subjective norm; perceived behavioural control; knowledge; religiosity; income; trust in takaful as a significant influence. However, awareness of intention was not found to be significant.Practical implicationsThis study suggests advantages for takaful providers in Sri Lanka, especially marketing departments, for enhancing sale of products, refurbishing marketing strategies and understanding the purchasing motivation of business entrepreneurs. This study guides takaful companies as to where they should concentrate to enhance market penetration.Originality/valuePrevious studies have concentrated on only three factors which comprise TPB. This paper’s main contribution is on the uniqueness of the Muslim minority context in a pluralistic context, providing a marketing model for takaful operators based on the different relevant dimensions.