Knowledge and attitudes towards Islamic banking in the Philippines

Abstract

Purpose The purpose of this study is to explore the knowledge and attitudes of the Muslim society toward Islamic banking in the Philippines. It also aims to determine the factors that influence their attitudes toward selection of Islamic banking. Design/methodology/approach Quantitative method was used in this study. A sample of 250 Muslims who have bank accounts in either Islamic or conventional banks in Marawi City, Philippines were surveyed using self-administered questionnaires, and only 233 questionnaires were considered valid. Descriptive, factor and multiple regression analyses were used to analyze the data. Findings The study shows that the level of knowledge of the Muslim society toward the basic modes of financing in Islamic banking is low. However, the attitudes of the Muslim society toward Islamic banking are favorable. Their attitudes are influenced by the opportunities that Islamic banking can provide to the society, religious motivation and awareness toward Islamic Banking. Product and marketing strategies, and the Shari’ah reputation of Islamic bank are also found significant in influencing their attitudes toward Islamic banking. Research limitations/implications The study focused only for Muslims in the Philippines particularly in Marawi City with limited samples. Future study that will combine non-Muslims and Muslim respondents are also indispensable. Practical implications The study reveals the potential development of Islamic banking in the country. The Philippine Government and the present Islamic bank in the country can enhance Islamic banking through the factors that influence the attitudes of the Muslim society toward Islamic banking. Social implications The Islamic bank can provide financial inclusion for Muslims, who voluntarily excluded themselves from conventional banking services and products because of religious reasons, and enhance the socio-economic conditions of the Muslim communities in the Philippines through its unique modes of financing and products. Originality/value The research was a first attempt to determine the level of knowledge and attitudes of Muslim society toward Islamic banking in the Philippines. This also underlines the importance of Islamic banking in the country particularly in Bangsamoro Autonomous Region in Muslim Mindanao.