Service quality and the moderating effect of Shari’ah perception on client satisfaction: A comparison of Islamic and conventional microfinance in Pakistan

Sarah Khan,Waheed Akhter,David Mcmillan

doi:10.1080/23322039.2017.1315206

Abstract

AbstractMicrofinance is an emerging concept which is improving the socioeconomic status of customers. This study assesses customer satisfaction of clients of Islamic and conventional microfinance providers using a sample of 578 clients i.e. 289 from each side. Akhuwat and Kashf (Islamic microfinance) and RCDS and DAMEN (conventional microfinance) are selected. The correlation, regression, ANOVA, and interaction tests are used for testing the relationship of Shari’ah perception as moderator between service quality and client satisfaction. The results indicate that Shari’ah perception acts as a strong moderator in case of Islamic microfinance whereas it is a weak moderator in case of conventional microfinance. The study concludes that Shari’ah perception is playing a vital role in enhancing the customer satisfaction in Islamic microfinance. It has important implications for policy-makers and Islamic microfinance providers to design Shari’ah awareness programs to enhance the Shari’ah perception of low income...

Highlights

Client’s satisfaction is a vital element for organization as it determines the level of success
This has identified the gap between the common thoughts and mindset about the Shari’ah perception that unlike it is not effecting the conventional microcredit clients but it is effecting clients of conventional microcredit as it is effecting the clients of Islamic microcredit
This study reviews the role of service quality and the moderating role of Shari’ah perception on client satisfaction that provide equal opportunities for all members of society

Summary

Introduction

Client’s satisfaction is a vital element for organization as it determines the level of success. Client satisfaction is a new approach for quality in organizations and enterprises. It serves to develop pure client-centered management and culture (Mihelis, Grigoroudis, & Siskos, 2001). Seeing a huge competition in the industry in past few decades (Loke, Taiwo, Salim, & Downe, 2011), service organizations are focusing to establish the management system and corporate culture to ensure the customer satisfaction, objectively (Agus, Krishnan, & Kadir, 2000). Customers’ satisfaction is vital for banks to fulfill customers’ expectations to compete (Hamzah et al, 2015)

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Results

Discussion

Conclusion